13th May 2005 07:00
British Airways PLC13 May 2005 COST PERFORMANCE DELIVERS GOOD RESULTS • Pre-tax profit of £415 million • Operating profit of £540 million • Net costs down 1.6 per cent • Unit costs down 4.7 per cent • Net debt at £2.9b - lowest level since 1993 British Airways today announced a pre-tax profit of £415 million for the year toMarch 31, 2005 (2004: £230 million profit). There was a pre-tax profit for thefourth quarter of £5 million (2004: £45 million profit). Operating profit for the year was £540 million (2004: £405 million profit). Theoperating margin was 6.9 per cent (2004: 5.4). The operating profit for thefourth quarter was £40 million (2004: £32 million profit). Net debt at £2.9 billion fell by £1.2 billion during the year and is at itslowest level since 1993. Cash inflow, before financing, was £1.2 billion, anincrease of £307 million. Rod Eddington, British Airways chief executive, said: "These are good resultsdriven by continued cost control and strong demand for our products. Seatfactors are at record levels, but yield, down 4.4 per cent, continues to beunder pressure and is down for the third year running. "We have exceeded our 2003 -2005 business plan savings of £450 million by £7million. This included reducing external spend by £300 million and improving our use oftechnology. During the year we have substantially improved our onlinecapability to improve customer service and increase the airline's efficiency." Mr Eddington added: "Self-service check-in has reached an all time high withnearly 600,000 passengers a month using our kiosks at airports. Online printedboarding passes are now accepted at 41 airports across our network and more than40,000 customers a month choose to print their boarding passes from their homeor office. "British Airways has won an innovation award for its online "manage my booking"facility. This allows customers to select a seat, choose a special meal, addtheir Executive Club details to their booking and email their itinerary tofriends. Usage of e-tickets has grown from 41 per cent to 76 per cent - thehighest usage of any network airline outside of the United States." "We have achieved a 6.9 per cent operating margin which is up 1.5 points and thebest margin since 1997. As a result this has triggered our employee rewardprogramme. All our staff will receive a bonus for their efforts, the first timesuch a payment has been made since 1998." Martin Broughton, British Airways chairman, said: "Market conditions remainbroadly unchanged. For the year to March 2006, total revenue is expected toimprove by 4-5 per cent, up from 3-4 per cent due to the impact of the latestfuel surcharges. Capacity and volumes are expected to increase by about 3 percent with total yield flat. "Fuel costs, net of hedging, are now expected to be about £400 million more thanlast year, up from £300 million due to recent price rises. "As announced in our latest business plan, our focus is on preparing for themove to Terminal 5 at London Heathrow in 2008, investing in products for ourcustomers and continuing to drive simplification to deliver a competitive costbase." The Board has recommended that no final dividend be paid. Group turnover for the year was £7,813 million, up 3.3 per cent on a flyingprogramme 3.2 per cent bigger in available tonne kilometers (ATKs). For the quarter,group turnover was up 1.9 per cent at £1,889 million on a flying programme 1.6per cent higher in ATKs. Revenue passenger kilometres (RPKs) were up 4.7 per cent for the year and up by4.5 per cent for the quarter. Seat factor was up 1.8 points for the year at arecord 74.8 per cent and up 2.2 points in the quarter to a record 73 per cent. Net costs for the year were down by 1.6 per cent and unit costs improved by 4.7per cent. In the quarter, net costs were down 1.9 per cent, and unit costsimproved by 3.5 per cent. For the year, cargo volumes measured in cargo tonne kilometers (CTKs) were up11.1 per cent compared with last year, with yields down 6.3 per cent. Overallload factor was up 2.1 points at 69.7 per cent. For the quarter, cargo volumeswere up 5.7 per cent compared with last year, with overall load factor up 2.1points at 68.2 per cent, but yields were down 6.2 per cent. ends 13 May, 2005 047/KG/05 Notes to editors: At March 2005, the FRS17 accounting valuation of the airline's group pensionschemes showed a deficit of £1.4 billion (2004: £1.2 billion net deficit). A webcast of British Airways' presentation to city analysts can be accessed viathe internet on www.bashares on Friday, May 13 at 9am followed by a conferencecall to city analysts at 2pm. Certain information included in this statement is forward-looking and involvesrisks and uncertainties that could cause actual results to differ materiallyfrom those expressed or implied by the forward looking statements. Forward-looking statements include, without limitation, projections relating toresults of operations and financial conditions and the Company's plans andobjectives for future operations, including, without limitation, expected futurerevenues, financing plans and expected expenditures and divestments. Allforward-looking statements in this report are based upon information known tothe Company on the date of this report. The Company undertakes no obligation topublicly update or revise any forward-looking statement, whether as a result ofnew information, future events or otherwise. It is not reasonably possible to itemise all of the many factors and specificevents that could cause the Company's forward looking statements to be incorrector that could otherwise have a material adverse effect on the future operationsor results of an airline operating in the global economy. Information on somefactors which could result in material difference to the results is available inthe Company's SEC filings, including, without limitation the Company's Report onForm 20-F for the year ended March 2004. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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