IAG group posts higher operating profit results for first half 2017

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IAG highlights: 

  • Second quarter operating profit €805 million before exceptional items (2016: €555 million)
  • Passenger unit revenue for the quarter up 1.5 per cent, up 4.0 per cent at constant currency
  • Non-fuel unit costs before exceptional items for the quarter down 0.3 per cent, up 3.5 per cent at constant currency
  • Fuel unit costs before exceptional items for the quarter down 10.4 per cent, down 13.2 per cent at constant currency
  • Operating profit before exceptional items for the half year €975 million (2016€710 million), up 37.3 per cent, including the adverse foreign exchange impact for the half year of €44 million
  • Cash of €7,944 million at June 30, 2017 was up €1,516 million on 2016 year end
  • Adjusted net debt to EBITDAR improved by 0.4 to 1.4 times

 Performance summary:

    Six months to June 30
Financial data € million   2017 2016 Higher / (lower)
Passenger revenue 9,575 9,539 0.4 %
Total revenue 10,888 10,786 0.9 %
Operating profit before exceptional items 975 710 37.3 %
Exceptional items (77) 79 nm
Operating profit after exceptional items 898 789 13.8 %
Profit after tax 567 554 2.3 %
Adjusted earnings per share (€ cents) 28.5 22.7 25.6 %
Operating figures   2017 2016 Higher / (lower)
Available seat kilometres (ASK million) 147,210 142,915 3.0 %
Seat factor (per cent) 80.9 80.0 0.9pts
Passenger unit revenue per ASK (€ cents) 6.50 6.67 (2.6)%
Non-fuel unit costs per ASK (€ cents) 5.21 5.33 (2.1)%
  June 30,

2017

December 31,

2016

Higher / (lower)
Cash and interest-bearing deposits 7,944 6,428 23.6 %
Adjusted net debt 7,024 8,159 (13.9)%
Adjusted net debt to EBITDAR 1.4 1.8 (0.4pts)
Adjusted gearing 50% 51% (1pt)
   
Definitions included in Alternative performance measures section.

 Willie Walsh, IAG Chief Executive Officer, said:

 “We’re reporting a very strong performance in quarter 2 with an operating profit of €805 million before exceptional items which is up from €555 million last year.

 

 “The underlying trend in unit revenue improved, benefitting partially from Easter and a weak base last year.

 

 “Non-fuel unit costs before exceptional items are up, at constant currency. These costs include the financial impact of the power failure which affected British Airways’ customers.

 

 “In June, LEVEL started longhaul flights from Barcelona to four destinations. Sales continue to be well ahead of our expectations. We’ve ordered three additional aircraft and are considering other European bases for the operation.”

Trading outlook

At current fuel prices and exchange rates, IAG expects its operating profit for 2017 to show a double-digit percentage improvement year-on-year. The Group expects second half passenger unit revenue (passenger revenue per ASK) to show an increase versus last year, at constant currency.

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