Finnair Group Financial Statements Release 1 January – 31 December 2023
Finnair Plc Financial Statement Release 14 February 2024 at 9.00 a.m. EET
Solid end to a strong year due to robust market and visible results from revenue and cost actions.
October – December 2023
- Revenue increased by 5.8% to 727.2 million euros (687.3*).
- Comparable operating result was 22.5 million euros (17.9) and operating result was 27.3 million euros (38.0).
- Earnings per share were 0.004 euros (0.005**).
- Result for the period included positive, one-off deferred tax items of 46 million euros based on previous years’ tax losses.
- Cash funds were 922.0 million euros (1 524.4) and they decreased from Q3 mainly due to the 220-million-euro pension premium loan repayment and the over 200-million-euro acquisition of previously leased aircraft during the period. The equity ratio was 15.6 per cent (9.9).
- Net cash flow from operating activities was -5.7 million euros (29.9), and net cash flow from investing activities was -177.7 million euros (-54.3).*** Gross capital expenditure totalled 268.6 million euros (61.8).
- Number of passengers increased by 6.5 per cent to 2.6 million (2.5).
- Available seat kilometres (ASK) increased by 10.5 per cent to 9,047.5 million kilometres (8,185.5).
- Passenger load factor (PLF) was 73.1% (72.3).
January – December 2023
- Revenue increased by 26.8% to 2,988.5 million euros (2,356.6).
- Comparable operating result was 184.0 million euros (-163.9) and operating result was 191.4 million euros (-200.6).
- Earnings per share were 0.022 euros (-0.060**).
- Result for the period included positive, one-off deferred tax items of 145 million euros based on previous years’ tax losses.
- Net cash flow from operating activities was 472.3 million euros (259.0), and net cash flow from investing activities was -464.0 million euros (-75.5).*** Gross capital expenditure totalled 484.2 million euros (199.6).
- Number of passengers increased by 20.8 per cent to 11.0 million (9.1).
- Available seat kilometres (ASK) increased by 15.5 per cent to 36,154.5 million kilometres (31,298.4). This is c. 77 per cent compared to 2019 ASKs. When wet leases are included, ASKs were c. 81 per cent compared to 2019.
- Passenger load factor (PLF) was 76.4% (67.6).
- The Board of Directors proposes to the Annual General Meeting that no dividend be distributed for 2023.
* Unless otherwise stated, comparisons and figures in parentheses refer to the comparison period, i.e., the same period last year.
** A rights issue was implemented in November 2023 and, thus, the comparison period figure has been restated accordingly.
*** In Q4, net cash flow from investing activities included 68.0 million euros of redemptions (38.9 million euros on investments) in money market funds or other financial assets (maturity over three months). In 2023, investments totalled 60.7 million euros (12.8 million euros). They are part of the Group’s liquidity management.
Outlook
GUIDANCE issued ON 24 OCTOBER 2023:
Finnair reiterates its capacity guidance estimating that in 2023, it will operate an average capacity of 80–85 per cent, as measured in ASKs, compared to 2019. The capacity estimate also includes the agreed wet leases.
Finnair specifies its previous guidance for full-year 2023 revenue and now estimates it to be in the range of 2.9–3.1 billion euros.
The company also specifies its previous guidance for full-year 2023 comparable operating result and now estimates it to be in the range of 160–200 million euros. The company’s comparable operating result estimate is based on the current fuel price and exchange rates.
Specific risks related to Finnair’s operating environment have normalised as the impacts of the pandemic have faded and the markets have adapted to the closure of Russian airspace. However, risks related to the impacts of inflation and rising interest rates on demand and costs remain elevated, thus, causing uncertainty in the operating environment. Also the prevailing situation in the Middle East causes uncertainty in the operating environment.
Finnair will update its outlook and guidance in connection with the financial statements bulletin for 2023.
NEW GUIDANCE ON 14 FEBRUARY 2024:
Global air traffic is expected to continue growing in 2024. However, risks related to the impact of inflation and higher interest rates on demand and costs remain elevated, causing uncertainty in the operating environment. International conflicts and global political instability also cause uncertainty in the operating environment. These factors may affect the demand for air travel and cargo.
Finnair plans to increase its total capacity by more than 10 per cent in 2024. The capacity estimate includes the agreed wet leases. This growth will mainly focus on Asia and Europe. Finnair’s revenue is expected to grow at a somewhat slower pace than capacity in 2024.
In accordance with its disclosure policy, Finnair provides full-year comparable EBIT estimate in connection with the half-year report in July.
Finnair will update its outlook and guidance in connection with the Q1 2024 interim report.
Interim CEO Jaakko Schildt:
Finnair carried 2.6 million passengers in October–December and revenue for the period totalled 727.2 million euros (687.3). Comparable operating result was 22.5 million euros (17.9), which means that our continued cost efficiency and sales activities generated good results, supported by a favourable market. Finnair's comparable operating result was positive for the sixth quarter and net profit for the fifth quarter in a row.
Despite the challenging weather conditions during the period, the on-time performance of our flights remained at a reasonable level at 75 per cent. Unlike many other airlines, we were able to operate almost all our flights despite some delays. Our regularity has been top class in global comparison, both during the period and throughout the year. This has supported customer satisfaction, and our Net Promoter Score (NPS) was 32 in the fourth quarter, which is a good level internationally.
During the period, we successfully carried out a rights issue of 570 million euros, a significant step of our strategy implementation. The proceeds from the rights issue were used to strengthen Finnair's balance sheet and financial position to better manage our financial liabilities, support the implementation of our strategy for sustainable profitable growth and ensure our ability to invest in the future. I would like to extend my warmest thanks to all old and new shareholders who participated in our rights issue.
After the rights issue, we repaid, among other things, the remaining tranche of the 400-million-euro capital loan granted by the State of Finland. After that Finnair no longer has debt instruments deemed as equity. We also repaid an additional 120-million-euro tranche on our 600-million-euro pension premium loan. Thanks to these measures, as well as our strong full-year results and cash flow, our balance sheet is healthier than before, and our financial expenses have decreased.
Our strategy implementation continued comprehensively during the period. Among other things, we started our cooperation with our oneworld partner Qantas by wet leasing two A330 aircraft for operations between Australia and Southeast Asia. This is another important step towards ensuring the efficient and profitable use of our fleet while Russian airspace remains closed.
Finnair celebrated its 100th anniversary on 1 November. Our anniversary year was filled with celebrations, but most importantly, it was a year of turnaround, as we left behind a double crisis. Our systematic strategy work carried out since autumn 2022 has borne fruit, and we have returned our business operations to the targeted profitability level on an annual level.
We will continue to implement our strategy and, in addition to profitability, take care of operational quality, reliability and, consequently, customer satisfaction. My thanks for the successful anniversary year and for achieving Finnair's turnaround goes to the entire Finnair personnel. Thank you also to our customers and all stakeholders for the journey together.
Shareholder return policy and the Board’s proposal for the distribution of profit
The aim of Finnair’s shareholder return policy is to pay, on average, one-third of the earnings per share as dividend or capital distribution during an economic cycle. When deciding on such distribution, Finnair intends to take into account its earnings trend and outlook, financial situation as well as capital and investment need for any given period. Any future distributions may be made in two annual investments.
In connection with the 570-million-euro rights issue implemented in November, Finnair announced that it is targeting to reinstate its ability for shareholder distributions from 2025 onwards based on 2024 financial statements.
In 2023, earnings per share were 0.022 euros (-0.060). Finnair Plc’s distributable equity amounted to 473,123,719.36 euros on 31 December 2023. The Board of Directors proposes to the Annual General Meeting that no dividend be distributed based on the financial statements adopted for 2023.
Financial reporting in 2024
The publication dates of Finnair’s financial reports in 2024 are the following:
- Interim Report for January–March 2024 on Tuesday 23 April 2024
- Half-year Report for January–June 2024 on Friday 19 July 2024
- Interim Report for January–September 2024 on Tuesday 29 October 2024
This text is a summary of Finnair's Financial Statements Release 1 January–31 December 2023. The full report is available as an attachment to this report.
FINNAIR PLC
Board of Directors
Briefings
Finnair will hold a results press conference (in Finnish) on 14 February 2024 at 11:00 a.m. at its office at Tietotie 9 in Vantaa. It is also possible to participate in the press conference via a live webcast at https://finnairgroup.videosync.fi/2024-02-14-media.
An English-language telephone conference and webcast will begin at 1:00 p.m. Finnish time. To access the conference, kindly first register at https://palvelu.flik.fi/teleconference/?id=50048500. After the registration, you will be provided with phone numbers and a conference ID. To join the live webcast, please register at https://finnairgroup.videosync.fi/q4-2023.
For further information, please contact:
Chief Financial Officer Kristian Pullola, tel. +358 9 818 4960, kristian.pullola@finnair.com
Head of Investor Relations Erkka Salonen, tel. +358 9 818 5101, erkka.salonen@finnair.com
Distribution:
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Finnair is a network airline, specialising in connecting passenger and cargo traffic between Asia, the Middle East, North America and Europe. Finnair is the only airline with year-round direct flights to Lapland. Sustainability is at the heart of everything we do – Finnair intends to reach carbon neutrality latest by the end of 2045. Customers have chosen Finnair as the Best Airline in Northern Europe in the Skytrax Awards for 13 times in a row. Finnair is a member of the oneworld alliance. Finnair Plc’s shares are quoted on the Nasdaq Helsinki stock exchange.