4th Nov 2005 07:03
British Airways PLC04 November 2005 REASONABLE RESULTS IN Q2 • Pre-tax profit of £241 million • Operating profit of £261 million • Revenue up 8.2 per cent • Unit costs up 2.2 per cent • Fuel costs up 51.3 per cent • Net debt down at £2.4 billion British Airways today announced a pre-tax profit of £241 million (2004: £293million) for the three months ended September 30, 2005. The 2004 resultbenefited by £86 million from the sale of shares in Qantas. The three monthpre-tax figures took the result for the half-year to £365 million profit (2004:£368 million). Operating profit for the quarter was £261 million (2004: £245 million). Theoperating margin was 11.8 per cent (2004: 12 per cent). Yields in the secondquarter were up 1.3 per cent (2004: 5.1 per cent down). The operating profitfor the half-year was £437 million (2004: £374 million) giving an operatingmargin of 10.2 per cent (0.7 points up). The cost of the Gate Gourmet dispute and the associated unlawful industrialaction is estimated at between £35-£45 million. This does not have a materialimpact on the quarterly financial comparisons as the airline also sufferedoperational disruption in the same period of last year. The board has decided that no interim dividend should be paid. Willie Walsh, British Airways' chief executive, said: "This is a reasonable setof results driven by improvements in revenue, seat factor and yield. It isclear, however, that we need to re-energise our drive on controllable costs. Wehave demonstrated time and again that it is possible to offer world-classservice while improving unit costs." "Costs are up in most areas. Fuel was the biggest single contributor, up astaggering 51.3 per cent. "We must ensure a successful move to Heathrow Terminal 5 in 2008 and redoubleour efforts to make British Airways more focused and better able to serve all ofour customers." Martin Broughton, British Airways' chairman, said: "Continued capacity restraintby the industry is resulting in a more stable price environment. This, coupledwith good demand for premium traffic, in particular the growth in leisurepremium, has delivered a small yield improvement. Assuming continued stableeconomies and a rational capacity environment, some yield improvement is nowexpected for this financial year. Consequently, revenue is now expected to growby between 6 - 7 per cent, up 0.5 points from our previous guidance." more Reasonable results Q2../2 Mr Broughton added: "Despite the improved revenue outlook, market conditionsremain broadly unchanged as significant promotional activity is required tomaintain seat factors. "Fuel costs continue to be a challenge for the industry, but our guidance isunchanged with total fuel costs expected to be up by £525 million this year." Group turnover for the second quarter was £2,205 million (2004: £2,038 million),8.2 per cent up on a flying programme 2.4 per cent up, measured in availabletonne kilometres (ATKs). Traffic volumes, measured in revenue passengerkilometres (RPKs), were up 3.7 per cent. Seat factor was up 1.1 points at 79.6per cent on capacity 2.2 per cent higher in available seat kilometres (ASKs). Unit costs increased by 2.2 per cent on the same period last year. Thisreflects a net cost increase of 4.7 per cent on capacity 2.4 per cent higher inATKs. Fuel costs increased by 51.3 per cent due to the increase in fuel prices, net ofhedging. Employee costs were up 3.3 per cent. The increases were partiallyoffset by continued reductions in selling costs. Operating cashflow for the six months was £530 million (2004: £484 million).Including current interest bearing deposits, the cash position at September 30,2005 was £1,925 million, up £243 million compared with March 31, 2005. Net debtwas £2,417 million, down by £505 million since the start of the year. ends November 4, 2005 122/KG/05 Note to Editors • For all periods up to and including March 2005, British Airways has previously prepared its Group financial statements under UK Generally Accepted Accounting Practice (UK GAAP). • British Airways restated its 2004/05 accounts to International Financial Reporting Standards (IFRS). The restated accounts were published on July 4, 2005. All comparators referred to are based on these restated accounts. British Airways' presentation to city analysts can be accessed via the internetwww.bashares.com at 9am. A webcast of British Airways' conference call to cityanalysts can also be accessed via the internet www.bashares.com at 2pm. Certain statements included in this statement may be forward-looking and mayinvolve risks and uncertainties that could cause actual results to differmaterially from 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, discussions ofthe company's business and financing plans, expected future revenues andexpenditures and divestments. All forward-looking statements in this report arebased upon information known to the company on the date of this report. Thecompany undertakes no obligation to publicly update or revise anyforward-looking statement, whether as a result of new information, future eventsor 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. Fuller information onsome of the factors which could result in a material difference is available inthe company's Annual Report and Accounts for the year ended March 31, 2005 whichis available on www.bashareholders.com. The estimated disruption cost reflects the direct cost of the disruption and theestimated revenue impacts, both direct and indirect. The estimate of £35 - £45million is based on assumptions the company considers reasonable, but arejudgemental. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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