Finnair Group Interim Report 1 January – 30 September 2023
Finnair Plc Interim Report 24 October 2023 at 9.00 a.m. EEST
Strong growth and profitability in the busiest quarter of the year. The rights issue is the next step in strategy implementation.
July – September 2023
- Earnings per share were 0.03 euros (-0.03)*.
- Revenue increased by 13.7% to 817.3 million euros (719.2).
- Comparable operating result was 94.3 million euros (35.2) and operating result was 90.0 million euros (19.2). Both were adversely impacted by the more expensive fuel price towards the end of the period.
- Cash funds were 1,346.3 million euros (31 Dec 2022: 1 524.4) and they decreased mainly due to the 200-million-euro hybrid bond redemption during the period. The equity ratio was 11.5 per cent (31 Dec 2022: 9.9).
- Net cash flow from operating activities was 95.5 million euros (11.8), and net cash flow from investing activities was 45.1 million euros (-0.4).** Gross capital expenditure totalled 73.2 million euros (37.5).
- Number of passengers increased by 6.6% to 3.0 million (2.8).
- Available seat kilometres (ASK) increased by 11.8% to 9,343.9 million kilometres (8,356.5).
- Passenger load factor (PLF) was 80.9% (80.1).
January – September 2023
- Basic earnings per share were 0.12 euros (-0.39).
- Result for the period included a positive, one-off deferred tax item of 99 million euros based on previous years’ tax losses.
- Revenue increased by 35.5% to 2,261.3 million euros (1,669.3).
- Comparable operating result was 161.4 million euros (-181.8) and operating result was 164.1 million euros (-238.6). Both were adversely impacted by the more expensive fuel price towards the end of the period.
- Net cash flow from operating activities was 478.1 million euros (229.1), and net cash flow from investing activities was -286.3 million euros (-21.2).** Gross capital expenditure totalled 209.4 million euros (137.8).
- Number of passengers increased by 26.0% to 8.4 million (6.6).
- Available seat kilometres (ASK) increased by 17.3% to 27,106.9 million kilometres (23,112.9).
- Passenger load factor (PLF) was 77.5% (65.9).
* Unless otherwise stated, comparisons and figures in parentheses refer to the comparison period, i.e., the same period last year.
** In Q3, net cash flow from investing activities included 63.2 million euros of redemptions (29.1 million euros) in money market funds or other financial assets (maturity over three months). In Q1–Q3, investments totalled to 128.6 million euros (26.1 million euros of redemptions). They are part of the Group’s liquidity management.
Outlook
GUIDANCE issued ON 21 July 2023:
Finnair reiterates its capacity guidance issued on 27 April 2023, estimating that in 2023, it will operate an average capacity of 80–85 per cent, as measured in ASKs, compared to 2019.
Finnair also reiterates its previous guidance, estimating that its 2023 revenue will significantly increase year-on-year but will not yet reach the level of 2019 (3,097.7 million euros).
The company specifies its guidance related to full-year 2023 comparable operating result provided in connection with the positive profit warning published on 13 June 2023 and now estimates that it will be within the range of 150–210 million euros.
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. The company’s comparable operating result estimate is based on the current fuel price and exchange rates.
Finnair will update its outlook and guidance in connection with the Q3 2023 interim report.
NEW GUIDANCE 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.
CEO Topi Manner:
Strong growth and profitability characterised the busiest quarter of the year. We carried 3 million passengers and had a passenger load factor of 81 per cent. Our revenue grew by 13.7 per cent year-on-year to 817 million euros. Our comparable operating profit was 94 million euros, equaling a comparable EBIT margin of 11.5 per cent. This was the fifth consecutive quarter with a positive comparable EBIT driven by continued revenue optimisation and cost efficiency as per our strategy. Our net result was also positive for the fourth consecutive time, this time 53 million euros.
In July, the monthly number of customers exceeded one million for the first time since the beginning of the COVID-19 pandemic. Operationally, we were well prepared for the busy travel season. Our on-time performance was 82 per cent. Punctuality is the single biggest factor affecting customer satisfaction. Customer satisfaction measured by the Net Promoter Score was 31. Our customers rated Finnair as a five-star airline in APEX's airline assessment. This recognition shows the trust and support our customers have in us. Thanks for the good customer experience belong to the entire Finnair team, who work daily to ensure smooth and safe flight operations and friendly customer service.
During the quarter, we renewed the Finnair Plus programme and joined Avios, bringing new benefits and new opportunities for members to collect and use frequent flyer currency. We also announced that we are investing in new, larger lounges on the Schengen side of Helsinki Airport. The expanded lounges will be available in the second half of 2024 to serve the needs of a growing number of customers.
We are also hiring more staff for our growing traffic. Training for pilots recruited earlier this year is already underway, and we had thousands of applicants applying for cabin crew positions earlier this autumn. We are also strengthening resources in digital services and in airport customer service. The interest towards these positions shows that Finnair is an attractive employer, and we also received recognition for our attractiveness in Universum's survey.
After the review period, we announced that we are planning a rights issue of up to 600 million euros to strengthen our financial position. The offering is a natural next step in the implementation of our strategy. It aims to reduce Finnair's financing costs, support the strategy implementation for sustainable profitable growth and ensure the company's ability to invest in the future. With the rights issue, Finnair also aims to restore the company's ability to reinstate shareholder distributions. Finnair's largest shareholders, including the State of Finland, support the rights issue.
Next week we will celebrate Finnair's 100th anniversary. Finnair is the sixth oldest airline still in operation in the world. Reaching the age of one hundred is not a given for an airline, and, after the double crisis we have been going through, achieving it is particularly meaningful. A warm thank you for the long history and shared journey goes to all our customers, owners, partners, personnel and other stakeholders.
Financial reporting in 2024
The publication dates of Finnair’s financial reports in 2024 are the following:
- Financial Statements Bulletin for 2023 on Wednesday 14 February 2024
- 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 Interim Report January – September 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 24 October 2023 at 12:00 p.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/2023-10-24-press.
An English-language telephone conference and webcast will begin at 3:00 p.m. Finnish time. To access the conference, kindly first register at https://palvelu.flik.fi/teleconference/?id=10010297. 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/2023-q3.
For further information, please contact:
Chief Financial Officer Kristian Pullola, tel. +358 9 818 4960, kristian.pullola@finnair.com
Director, Investor Relations Erkka Salonen, tel. +358 9 818 5101, erkka.salonen@finnair.com
FINNAIR PLC
Distribution:
NASDAQ OMX Helsinki
Principal media
Finnair is a network airline, specialising in connecting passenger and cargo traffic between Asia, North America and Europe. Finnair is one of the oldest operating airlines in the world, celebrating its centenary in 2023. 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.