Strong financial results for IAG group (Aer Lingus, British Airways, Iberia, LEVEL & Vueling) in Q3, despite higher fuel price

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International Consolidated Airlines Group (IAG) today (October 26, 2018) presented Group consolidated results for the nine months to September 30, 2018.

IAG period highlights on results:

  • Third quarter operating profit €1,460 million before exceptional items (2017 restated(1): €1,450 million)
  • Net foreign exchange operating profit impact for the quarter adverse €111 million
  • Passenger unit revenue for the quarter up 1.3 per cent, up 2.4 per cent at constant currency
  • Non-fuel unit costs before exceptional items for the quarter up 0.5 per cent, down 0.7 per cent at constant currency
  • Fuel unit costs for the quarter up 14.3 per cent, up 15.0 per cent at constant currency
  • Operating profit before exceptional items for the nine months period €2,575 million (2017 restated(1): €2,400 million), up 7.3 per cent
  • Completion of second €500m share buyback programme on October 24
  • Interim dividend of 14.5 euro cents per share

Performance summary:

   Nine months to September 30  
Highlights € million 2018 2017

(restated)(1)

Higher / (lower)
       
Passenger revenue 16,326 15,507 5.3 %
Total revenue 18,346 17,450 5.1 %
Operating profit before exceptional items 2,575 2,400 7.3 %
Exceptional items 584 (271) nm
Operating profit after exceptional items 3,159 2,129 48.4%
       
Available seat kilometres (ASK million) 244,343 231,417 5.6 %
Passenger revenue per ASK (€ cents) 6.68 6.70 (0.3)%
Non-fuel costs per ASK (€ cents) 4.84 5.01 (3.2)%
       
Alternative performance measures 2018 2017

(restated)(1)

Higher / (lower)
       
Profit after tax before exceptional items (€ million) 1,970 1,805 9.1 %
Adjusted earnings per share (€ cents) 91.9 81.7 12.5 %
Adjusted net debt (€ million) 7,475 7,183 4.1 %
Adjusted net debt to EBITDAR 1.4 1.4 (0.0x)
       
Statutory results € million 2018 2017

(restated)(1)

Higher / (lower)
       
Profit after tax and exceptional items 2,514 1,597 57.4 %
Basic earnings per share (€ cents) 121.9 75.3 61.8 %
Cash and interest-bearing deposits 6,923 7,523 (8.0) %
Interest-bearing long-term borrowings 7,342 7,578 (3.1) %
        
For definitions refer to the IAG Annual report and accounts 2017.
(1)Restated for new accounting standards IFRS 15 ‘Revenue from contracts with customers’ and IFRS 9 ‘Financial instruments’.

 

Willie Walsh, IAG Chief Executive Officer, said:

We’re reporting a good quarter 3 performance with an operating profit of €1,460 million before exceptional items, up from €1,450 million last year.               

“These were strong results despite significant fuel cost and foreign exchange headwinds. At constant currency, our passenger unit revenue increased by 2.4 per cent while non-fuel unit costs went down 0.7 per cent.

“We’re pleased to announce an interim dividend of 14.5 euro cents per share and this week we completed our second €500 million share buy-back programme”.

Trading outlook

At current fuel prices and exchange rates, IAG expects its operating profit before exceptional items for 2018 to show an increase of around €200m from a base of €2,950m in 2017. Both passenger unit revenue and non-fuel unit costs are expected to improve at constant currency for the full year.

1 COMMENT

  1. The airline group, which also includes Aer Lingus, Iberia, Level and Vueling, has reported an operating profit of €3,0 (?2,6) before exceptional items for 2017. The figure is 18.9 per cent higher than 2017.

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