Finnair Group Half-year Report 1 January – 30 June 2021

Thu, Jul 15, 2021 08:00 CET

Finnair Plc Half-year Report 15 July 2021 at 9.00 a.m. EEST

Cost adjustment and financing measures continued while Finnair was preparing for a traffic restart. As travel restrictions are reduced, demand is expected to increase gradually during the fall.

April – June 2021

Earnings per share were -0.09 euros (-0.25)*.
Revenue increased by 63.0% to 111.8 million euros (68.6).
Comparable operating result was -151.3 million euros (-174.3). Operating result was -139.1 million euros (-171.2).
Cash funds were 834.3 million euros (31 Dec 2020: 823.7) and equity ratio was 18.9 per cent (31 Dec 2020: 24.6).
Net cash flow from operating activities was -59.3 million euros (-463.7), and net cash flow from investing activities was 13.8 million euros (262.1).**
Number of passengers increased by 197.6% to 0.3 million (0.1).
Available seat kilometres (ASK) increased by 311.6%.
Passenger load factor (PLF) was 30.6% (33.1).

January – June 2021

Earnings per share were -0.19 euros (-0.46).
Revenue decreased by 64.2% to 225.4 million euros (629.8).
Comparable operating result was -294.5 million euros (-265.4). Operating result was -288.2 million euros (-266.8).
Net cash flow from operating activities was -177.0 million euros (-597.2), and net cash flow from investing activities was 19.0 million euros (194.8).**
Number of passengers decreased by 80.0% to 0.6 million (2.8).
ASK declined by 73.8%.
PLF was 28.3% (71.3).

* Unless otherwise stated, comparisons and figures in parentheses refer to the comparison period, i.e. the same period last year.

** In Q2, net cash flow from investing activities includes 28.6 million euros (322.1) of redemptions in money market funds or other financial assets (maturity over three months). In H1, these decreased in net terms by 37.9 million euros (371.3). They are part of the Group’s liquidity management.

Outlook

guidance issued on 27 April 2021:

Due to the continued strict travel restrictions, the comparable operating loss in Q2 2021 will be of a similar magnitude as in four previous quarters.

In Q2 2021, Finnair continues to operate a limited network. While gradual recovery of demand is expected in Q3 2021, the visibility is weak and there are several scenarios of the timing of the recovery and, thus, the company will not provide guidance on full year revenue.

Finnair will update its outlook and guidance in connection with the Q2 2021 interim report.

NEW GUIDANCE ON 15 JULY 2021:

Travel restrictions have been lifted at a slower pace than expected and, therefore, the recovery in demand has also been delayed. We expect that demand will increase gradually during the fall 2021 as now Finland is also opening to travel. The company estimates that the monthly operating cash flow will turn positive by the end of the year 2021.

The travel restrictions will, however, continue to have a softening impact on demand especially in Asia, which is expected to open to travelers some months later than Europe. Due to the travel restrictions and incremental costs caused by the increased capacity, the comparable operating loss in Q3 2021 will be of a similar magnitude as in the five previous quarters despite the gradual increase in revenue.

As a result of the pandemic situation, inclusive of virus variants, visibility remains weak and there are several scenarios of the timing of the recovery and, thus, the company will not provide guidance on full year 2021 revenue.

Finnair will update its outlook and guidance in connection with the Q3 2021 interim report.

CEO Topi Manner:

The pandemic and related travel restrictions continued to heavily impact Finnair’s passenger numbers, revenue and result during the second quarter. We continued to operate a limited network, adding flights as demand evolved when European countries started to open for travel. In addition to the New York route opened in the spring, we re-introduced our services to Chicago and Los Angeles after a break of over one year.

Cargo demand remained strong due to the delivery chain challenges caused by the pandemic. We flew 522 cargo-only flights; cargo also supported adding more long-haul flights to our passenger network. Cargo continued to account for more than half of our revenue, even though passenger revenue surpassed cargo revenue again in June.

We continued our financing actions by refinancing our 200-million-euro bond, doubling its size to 400 million euros. Thanks to this transaction, we maintain a healthy balance sheet and cash reserves, and can thus focus fully on re-starting our traffic.

Our cost programme, which targets permanent cost savings from the start of the year 2022, proceeded well, and we will clearly exceed our earlier target of 170 million euros. We now target savings of up to 200 million euros measured with 2019 operational volumes. We continue to strive for cost efficiency in all our operations, which is necessary in the highly competitive post-pandemic market.

Our customer satisfaction was again at an excellent level, with a NPS of 45. In June, we introduced more choice and options for travelers to tailor their own trip, by renewing our ticket offering and introducing a totally new Business Light ticket type.

Even though travel restrictions have been lifted at a slower pace than we expected, many countries, including Finland, have now opened to travel and entry requirements are becoming more harmonised, especially for fully vaccinated travellers. We believe demand will increase gradually during the fall especially in Europe and North America, with Asian countries following some months behind. Vaccination coverage is now increasing at a good pace around the world, but the travel recovery continues to depend on the development of the pandemic situation, including virus variants, and the related travel restrictions. Although we estimate demand will gradually grow during the autumn, it will take at least until 2023 for the traffic volumes to return to the pre-pandemic levels.

Our traffic plan for the autumn and winter includes some 70 destinations. Our target is to utilise opportunities in the market and we will launch totally new long-haul flights from Stockholm to Florida and Thailand. These flights create jobs for some 270 Finns and strengthen our offering in the important Swedish market.

Despite the continued uncertainty, we head into the second half of the year with confidence, continuing the return training of our pilots and cabin crew and re-introducing services gradually. I want to extend my sincere thanks to the entire Finnair personnel for their commitment, perseverance and collaboration during the pandemic months. Together, we wish customers a warm welcome onboard our flights.

Financial reporting in 2021

The publication dates of Finnair’s financial reports in 2021 are the following:

Interim Report for January–September 2021 on Tuesday 26 October 2021

This text is a summary of Finnair's Half-year Report January – June 2021. 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 15 July 2021 at 11:00 a.m. via a live webcast: https://finnairgroup.videosync.fi/2021-0715-press.

An English-language telephone conference and webcast will begin at 1:00 p.m. Finnish time. The conference may be attended by dialling your local access number +358 (0)9 8171 0310 (Finland), 08 5664 2651 (Sweden), 033 3300 0804 (UK) or +44 (0)33 3300 0804 (all other countries). The confirmation code is 53224833#. To join the live webcast, please register at: https://finnairgroup.videosync.fi/2021-q2.

For further information, please contact:

Chief Financial Officer Mika Stirkkinen, tel. +358 9 818 4960, mika.stirkkinen@finnair.com

Director, Investor Relations Erkka Salonen, tel. +358 9 818 5101, erkka.salonen@finnair.com

FINNAIR PLC

Further information:
Finnair communications, 358 9 818 4020, comms@finnair.com

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Finnair is a modern premium network airline, specialising in passenger and cargo traffic between Asia and Europe. Helsinki’s geographical location gives Finnair a competitive advantage, since the fastest connections between many European destinations and Asian megacities fly over Finland. Sustainability is at the heart of everything we do –  Finnair intends to reduce its net emissions by 50% by the end of 2025 from the 2019 baseline and achieve carbon neutrality latest by the end of 2045. Finnair is a member of the oneworld alliance. Finnair Plc’s shares are quoted on the Nasdaq Helsinki stock exchange.