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Friday, 28 July 2017

AIR FRANCE - KLM :First Half 2017 Results

     

Published: 07:15 CEST 28-07-2017 /GlobeNewswire /Source: AIR FRANCE - KLM / : AF /ISIN: FR0000031122


28th July 2017

 

First Half 2017 results

Result improvement driven by solid traffic and unit revenue performance

 

 

FIRST HALF 2017

  • Robust traffic resulting in an improved load factor, up 1.4 pts compared to last year
  • Confirmation of the positive trend in Group (Passenger + Transavia) unit revenue per available seat kilometer (RASK) ex-currency: +1.9% during the Second Quarter
  • First Half operating result 353 million euros, up 135 million euros

 

TRUST TOGETHER

  • Major advances in strengthening the network of alliances
  • Air France Pilot agreement paving the way for the creation of Joon
  • Air France Cabin crew signed 5-year labor agreement

 

OUTLOOK

  • Long haul forward bookings for coming four months above previous year's level
  • Unit revenue variation at constant currency expected to be slightly up for the Second Half 2017
  • Despite the negative effects of the increased load factor and profit sharing on the unit cost evolution, the Group is expecting a unit cost reduction for 2017 between 1.0% and 1.5% at constant currency, fuel price and pension related expenses.
  • Expected decrease in fuel bill in Second Half 2017 to be 100 million euros
  • Target of positive free cash flow before disposals reiterated with capex at the high-end of the 1.7-2.2 billion euros range

 

The Board of Directors of Air France-KLM, chaired by Jean-Marc Janaillac, met on 27th July 2017 to approve the accounts for the First Half 2017.

 

Jean-Marc Janaillac made the following comments: "In a context of solid traffic growth and enhanced unit revenue trend, Air France-KLM delivered improved operating income and operating free cash flow. Over the period, the Group continued to execute on its strategic priorities of growing revenues and improve competitiveness. The agreement reached with Air France pilots in July allows the Group to launch the creation of Joon in line with the original schedule. I am also very pleased with the strengthening of our network of alliances: the combination between our North-Atlantic alliance with Delta and Delta and Virgin Atlantic joint-venture, and the reinforcement of our partnership with China Eastern position Air France-KLM as the European pillar of the leading global airline network. These are important milestones showing that Air France-KLM is on the right path to achieve Trust Together's strategic objectives."

 

Air France-KLM Group

Second Quarter

First Half

2017

Change

2017

Change

Passengers (thousands)

26,222

+7.5%

47,145

+6.5%

Capacity (ASK m)

80,934

+5.1%

151,768

+4.2%

Traffic (RPK m)

70,411

+7.5%

130,909

+5.9%

Load factor 

87.0%

+2.0 pt

86.3%

+1.4 pt

Operating result (€m)

496

+179

353

+135

Net result - group (€m)

367

+326

151

+265

Operating free cash flow (€m)

339

+162

668

+295

Net debt at end of period (€m)

 

 

2,956

-699


 

Business Review

 

Network: Main contributor to the increase in the Group's operating result

 

Network

Second Quarter

First Half

2017

Change

Change like-for-like

2017

Change

Change like-for-like

Capacity (EASK m)

82,076

+3.9%

 

156,936

+2.8%

 

Total revenues (€m)

5,749

+5.5%

+4.7%

10,790

+3.3%

+2.6%

Scheduled revenues (€m)

5,520

+6.2%

+5.4%

10,334

+3.7%

+3.1%

Unit revenue per EASK (€ cts)

6.72

+2.2%

+1.3%

6.58

+0.9%

+0.3%

Unit cost per EASK (€ cts)

6.23

-0.2%

-1.6%

6.39

+0.0%

-1.6%

Operating result (€m)

409

+138

+162

309

+106

+200

 

As announced at the Full Year 2016 results presentation, the busines segment Network consists now of both the Passenger network and Cargo business. The combined operating result amounted to 309 million euros during the First Half 2017, an improvement of 200 million euros at constant currency, driven by a solid traffic and unit revenue performance in the Passenger network.

 

Robust Second Quarter traffic numbers confirming improvement in Passenger unit revenue trend

 

 

Second Quarter

First Half

Passenger network

2017

Change

Change like-for-like

2017

Change

Change like-for-like

Passengers (thousands)

21,861

+6.0%

 

40,333

+4.4%

 

Capacity (ASK m)

72,716

+4.2%

 

138,802

+3.1%

 

Traffic (RPK m)

63,022

+6.6%

 

119,375

+4.8%

 

Load factor 

86.7%

+2.0 pt

 

86.0%

+1.4 pt

 

Total passenger revenues (€m)

5,243

+6.1%

+5.2%

9,780

+3.9%

+3.3%

Scheduled passenger revenues (€m)

5,050

+6.7%

+5.8%

9,399

+4.4%

+3.7%

Unit revenue per ASK (€ cts)

6.94

+2.4%

+1.5%

6.77

+1.2%

+0.6%

Unit revenue per RPK (€ cts)

8.01

+0.0%

-0.8%

7.87

-0.4%

-1.1%

 

The Second Quarter confirms the improvement of the Passenger unit revenue performance in both Air France and KLM, up 1.5% at constant currency. On long haul, there was strong premium class performance with unit revenues up by 4.4% at constant currency and economy class up by 2.2%. The improvement was driven mainly by the strong recovery in Asia, with unit revenue up 8.6% at constant currency and Latin America, up 13.6% at constant currency.

 

Gradual Cargo turnaround

 

 

Second Quarter

First Half

Cargo business

2017

Change

Change like-for-like

2017

Change

Change like-for-like

Tons (thousands)

286

+1.4%

 

558

+0.0%

 

Capacity (ATK m)

3,624

+1.7%

 

7,019

+0.3%

 

Traffic (RTK m)

2,144

+2.7%

 

4,188

+1.6%

 

Load factor 

59.2%

+0.7 pt

 

59.7%

+0.8 pt

 

Total Cargo revenues (€m)

506

-0.2%

-0.5%

1,010

-2.5%

-3.0%

Scheduled cargo revenues (€m)

470

+1.1%

+0.5%

935

-2.3%

-3.0%

Unit revenue per ATK (€ cts)

12.94

-0.8%

-1.3%

13.31

-2.5%

-3.2%

Unit revenue per RTK (€ cts)

21.87

-1.9%

-2.4%

22.31

-3.8%

-4.5%

 

During the Second Quarter, the improvement in the Cargo performance was driven by a 2.7% increase in traffic resulting in a 0.7pt increase in load factor. The trend in unit revenue, down 1.3% during the Second Quarter, continued to improve compared to previous quarters, confirming the gradual turnaround.

 

Maintenance: Record high order book

 

 

Second Quarter

First Half

Maintenance

2017

Change

Change like-for-like

2017

Change

Change like-for-like

Total revenues (€m)

992

-0.8%

 

2,041

+1.7%

 

Third party revenues (€m)

440

+1.1%

-0.8%

900

+3.9%

+1.7%

Operating result  (€m)

53

-4

-7

89

-6

-12

Operating margin (%)

5.3%

-0.4 pt

-0.7 pt

4.4%

-0.4 pt

-0.7 pt

 

Over the period, the Maintenance order book increased to a record high 9.7 billion dollars, reaching its target of growing the order book by 10% in 2017. The increase was driven by both the Engine and the Component order books.

 

Transavia: On track for a positive result in 2017

 

 

Second Quarter

First Half

Transavia

2017

Change

2017

Change

Passengers (thousands)

4,361

+15.9%

6,812

+20.4%

Capacity (ASK m)

8,218

+13.7%

12,966

+18.5%

Traffic (RPK m)

7,389

+15.7%

11,534

+19.5%

Load factor 

89.9%

+1.5 pt

89.0%

+0.8 pt

Total passenger revenues (€m)

408

+26.3%

605

+25.3%

Scheduled passenger revenues (€m)

408

+26.7%

596

+25.5%

Unit revenue per ASK (€ cts)

4.95

+11.0%

4.59

+5.8%

Unit revenue per RPK (€ cts)

5.49

+8.9%

5.15

+4.7%

Unit cost per ASK (€ cts)

4.54

-1.8%

4.93

-2.0%

Operating result (€m)

34

+46

-43

+32

 

Strong capacity growth (+13.7%) in combination with an increase in load factor (+1.5pts) and an 11.0% rise in unit revenue led to the strong positive Second Quarter result. The result was strengthened by the decrease in unit costs, down 4.2% at constant currency and fuel. The Group is expecting a positive result in 2017 for Transavia.

 


 

Group Review

 

 

Group operating result driven by solid traffic and unit revenue performance.

 

 

Second Quarter

First Half

 

2017

Change

Change like-for-like

2017

Change

Change like-for-like

Capacity (EASK m)

90,294

+4.7%

 

169,901

+3.8%

 

Revenues (€m)

6,605

+6.3%

+5.4%

12,314

+4.2%

+3.5%

EBITDAR (€m)

1,190

+199

+222

1,744

+222

+310

EBITDA (€m)

913

+185

+215

1,182

+188

+290

Operating result (€m)

496

+179

+210

353

+135

+239

Operating margin (%)

7.5%

+2.4 pt

+3.0pt

2.9%

+1.0 pt

+1.9pt

Lease adjusted operating result ((€m)

588

+184

+218

540

+146

+255

Lease adjusted operating margin (%)

8.9%

+2.4 pt

+3.0pt

4.4%

+1.1 pt

+2.0pt

Net result, group share (€m)

367

+326

 

151

+265

 

 

 

The Second Quarter operating result improved by 179 million euros of which the increase in capacity translated into a positive 13 million euros contribution. The other items contributing are, at constant currency, the positive trend in group unit revenues resulting in an increase of 100 million euros, whereas the decrease in fuel price including hedge results contributed 74 million euros. Currencies had a negative impact on the operating result of 32 million euros.

 

Adjusted for the interest portion of operating leases (1/3 of annual operating lease expenses), the operating margin stood at 8.9% versus 6.5% at 30 June 2016.

 

Unit cost reduction impacted by increase in load factor and profit sharing

 

During the First Half, the unit cost was down 1.0% with capacity up by 3.8%. The Second Quarter unit cost per EASK was down by 0.3%, on a constant currency, fuel price and pension-related expense basis, against a capacity increase measured in EASK of 4.7%.

The results of the cost saving measures and initiatives were partly offset by higher flight variable costs related to the increasing load factor. The higher load factor compared to last year translated into a 0.3% increase in unit costs during the Second Quarter and 0.2% over the First Half 2017.

In addition to the increase in costs related to the higher load factor, profit-sharing increased during the First Half 2017 due to the timing of the recording of these expenses. This resulted in an increase of 0.6% in the Second Quarter and 0.2% in the First Half 2017.

 

Improved employee productivity

 

Second Quarter productivity, measured in EASK per FTE, increased by 5.6% while capacity increased by 4.7%. The average number of staff decreased by 700 FTEs including an increase in Cabin crews by 600 FTEs linked to the increase in capacity. Due to seasonality and timing effects, net employee costs increased by 1.9% and the profit sharing expense increased by 36 million euros. For the Full Year 2017, the increase in the  employee costs is expected to be less than 1.0% compared to the previous year.

 

Stable fuel bill during First Half 2017

 

The Half Year fuel bill amounted to 2,280 million euros, stable compared to previous year.

 


 

Net debt reduction supported by an improvement in EBITDA and working capital

 

 

Second Quarter

First Half

In € million

2017

Change

2017

Change

Cash flow before change in WCR and Voluntary Departure Plans, continuing operations

795

+241

1,059

+250

Cash out related to Voluntary Departure Plans

-36

+98

-73

+100

Change in Working Capital Requirement (WCR)

165

-104

826

+33

Net cash flow from operating activities

924

+235

1,812

+383

Net investments before sale & lease-back*

-585

-73

-1,144

-88

Operating free cash flow

339

+162

668

+295

* Net investments before sale & lease-back is defined as the sum of 'Purchase of property, plant and equipment and intangible assets' and 'Proceeds on disposal of property, plant and equipment and intangible assets' as presented in the consolidated cash flow statement

 

The net debt at 30 June 2017 amounted to 2,956 million euros, down 699 million euros compared to 31 December 2016. The reduction in net debt was supported by the improvement in both EBITDA and working capital. Operating free cash flow was positive at 668 million euros up by 295 million euros compared to 30 June 2016. The adjusted net debt decreased by 454 million euros to 10,712 million euros.

 

Further strengthening of liquidity and continuous decrease in the net cost of debt

 

The net cost of debt amounted to 113 million euros during the First Half 2017, down 21 million euros compared to last year, a continuation of the downward trend observed in recent years. The liquidity situation further improved by an increase in the net cash on balance sheet of 580 million euros to 4.9 billion euros.

 

Contribution by airline to First Half results

 

 

Second Quarter

First Half

 

2017

Change

2017

Change

Air France

184

+83

61

+46

Operating Margin (%)

4.6%

+2.0 pt

0.8%

+0.6 pt

KLM

317

+103

301

+94

Operating Margin (%)

11.7%

+3.0 pt

6.1%

+1.6 pt

Sum of individual airline results does not add up to Air France-KLM total due to intercompany eliminations at Group level

 


 

Outlook

 

The global context remains highly uncertain regarding the geopolitical environment in which we operate and regarding fuel prices.

 

Long haul forward bookings for the coming four months are currently above previous year level. Based on the current outlook, the variation in unit revenue at constant currency is expected to be slightly up compared to last year for the Second Half 2017 .

 

To regain the offensive in long-haul and to improve the performance in medium-haul, the Group is maintaining its targeted growth for the passenger group (Air France, KLM and Transavia) of between 3.0% and 3.5% measured in ASKs for Full Year 2017.

 

To improve its competitiveness, the Group is pursuing and amplifying the initiatives already under way in terms of unit cost reduction. Despite the negative effects of the increased load factor and profit sharing  on the unit cost evolution, the Group is expecting for 2017 a unit cost reduction between 1.0% and 1.5% at constant currency, fuel price and pension related expenses.

 

Based on the forward curve of 14th July 2017, the second half 2017 fuel bill is expected to decrease by 100 million euros compared to 2016[1].

 

Regarding the balance sheet, the Group is maintaining strict capex discipline, targeting positive free cash flow before disposals. The 2017 investment plan stands at between 1.7 billion euros and 2.2 billion euros and is expected to be at the high end of the range.

 

The Group is pursuing a further reduction in net debt, targeting an adjusted net debt to EBITDAR below 2.5x mid cycle by the end of 2020. The adjusted net debt to EBITDAR ratio is expected to improve at 31 December 2017 compared to the previous year

*****

Limited review procedures were carried out by the external auditors. Their limited review report was issued following the Board Meeting.

 

The results presentation is available at www.airfranceklm.com on 28th July 2017 from 7:15 am CET.

 

An analysts' meeting will be hosted by Mr Janaillac (CEO) and Mr Gagey (CFO) on 28th July 2017 at 8:00am CET at the Pullman Paris Tour Eiffel hotel, 18, avenue de Suffren, Paris (15th arrondissement).

 

A live broadcast of the analysts' meeting will be available at www.airfranceklm.com (password: AFKL) and by conference call.

 

To connect to the conference call, please dial:

  • France: +33 (0)1 76 77 22 74 
  • Netherlands: +31 (0) 20 721 9251
  • United Kingdom: +44 (0)330 336 9105
  • USA: +1 719-325-2202

Confirmation Code: 2565420

 

 

Investor relations

 

 

Press

Marie-Agnès de Peslouan

+33 1 41 56 56 00

Head of Investor Relations

 

Tel : +33 1 49 89 52 59

Email: madepeslouan@airfranceklm.com

 

 

 

Dirk Voermans

Senior manager, Investor Relations

Tel : +33 1 49 89 52 60

Email: divoermans@airfranceklm.com

 

INCOME STATEMENT

 

 

 

Second Quarter

First Half

 

In millions euros

2017

2016

Change

2017

2016

Change

 

 

 

 

 

 

 

 

SALES

6,605

6,215

6.3%

12,314

11,820

4.2%

Other revenues

0

0

N/A

0

0

N/A

REVENUES

6,605

6,215

6.3%

12,314

11,820

4.2%

Aircraft fuel

-1,160

-1,167

-0.6%

-2,280

-2,263

0.8%

Chartering costs

-103

-113

-8.8%

-202

-215

-6.0%

Landing fees and en route charges

-495

-484

2.3%

-932

-914

2.0%

Catering

-203

-113

79.6%

-388

-215

80.5%

Handling charges and other operating costs

-437

-389

12.3%

-856

-750

14.1%

Aircraft maintenance costs

-609

-604

0.8%

-1,240

-1,246

-0.5%

Commercial and distribution costs

-238

-232

2.6%

-468

-463

1.1%

Other external expenses

-395

-469

-15.8%

-782

-953

-17.9%

Salaries and related costs

-1,915

-1,862

2.8%

-3,727

-3,706

0.6%

Taxes other than income taxes

-38

-39

-2.6%

-83

-88

-5.7%

Other income and expenses

178

248

-28.2%

388

515

-24.7%

EBITDAR

1,190

991

20.1%

1,744

1,522

14.6%

Aircraft operating lease costs

-277

-263

5.3%

-562

-528

6.4%

EBITDA

913

728

25.4%

1,182

994

18.9%

Amortization, depreciation and provisions

-417

-411

1.5%

-829

-776

6.8%

INCOME FROM CURRENT OPERATIONS

496

317

56.5%

353

218

61.9%

Sales of aircraft equipment

10

0

N/A

19

8

138%

Other non-current income and expenses

-3

18

-117%

-11

-107

-89.7%

INCOME FROM OPERATING ACTIVITIES

503

335

50.1%

361

119

203%

Cost of financial debt

-68

-78

-12.8%

-133

-162

-17.9%

Income from cash and cash equivalent

11

14

-21.4%

20

28

-28.6%

Net cost of financial debt

-57

-64

-10.9%

-113

-134

-15.7%

Other financial income and expenses

32

-126

N/A

1

-44

N/A

INCOME BEFORE TAX

478

145

230%

249

-59

 nm

Income taxes

-105

-107

1.9%

-96

-53

81.1%

NET INCOME OF CONSOLIDATED COMPANIES

373

38

882%

153

-112

nm

Share of profits (losses) of associates

3

2

50.0%

7

1

600%

INCOME FROM CONTINUING OPERATIONS

376

40

840%

160

-111

nm

Net income from discontinued operations

-8

3

N/A

-8

2

-500%

NET INCOME FOR THE PERIOD

368

43

756%

152

-109

nm

Minority interest

-1

-2

N/A

-1

-5

N/A

NET INCOME FOR THE PERIOD - GROUP

367

41

795%

151

-114

-nm

 


 

 

CONSOLIDATED BALANCE SHEET

 

 

Assets

In million euros

June 30,

2017

December 31, 2016

Goodwill

217

218

Intangible assets

1,092

1,066

Flight equipment

9,632

9,119

Other property, plant and equipment

1,455

1,480

Investments in equity associates

294

292

Pension assets

2,503

1,462

Other financial assets

1,126

1,064

Deferred tax assets

266

176

Other non-current assets

180

448

Total non-current assets

16,765

15,325

Assets held for sale

0

0

Other short-term financial assets

404

130

Inventories

623

566

Trade receivables

2,079

1,868

Other current assets

1,023

1,105

Cash and cash equivalents

4,217

3,938

Total current assets

8,346

7,607

Total assets

25,111

22,932

 

 

Liabilities and equity

In million euros

June 30,

2017

December 31, 2016

Issued capital

300

300

Additional paid-in capital

2,971

2,971

Treasury shares

-67

-67

Perpetual

600

600

Reserves and retained earnings

-1,775

-2,520

Equity attributable to equity holders of Air France-KLM

2,029

1,284

Non-controlling interests

15

12

Total Equity

2,044

1,296

Pension provisions

2,144

2,119

Other provisions

1,601

1,673

Long-term debt

6,640

7,431

Deferred tax liabilities

307

-12

Other non-current liabilities

319

284

Total non-current liabilities

11,011

11,495

Provisions

609

654

Current portion of long-term debt

1,618

1,021

Trade payables

2,263

2,359

Deferred revenue on ticket sales

3,957

2,517

Frequent flyer programs

811

810

Other current liabilities

2,787

2,775

Bank overdrafts

11

5

Total current liabilities

12,056

10,141

Total equity and liabilities

25,111

22,932

 

 


 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

In € millions

Period from January 1 to June 30 2017

H1 2017

H1 2016

Net income from continuing operations

160

-111

Net income from discontinued operations

-8

2

Amortization, depreciation and operating provisions

829

781

Financial provisions

19

-21

Loss (gain) on disposals of tangible and intangible assets

-19

-59

Loss (gain)on disposals of subsidiaries and associates

-2

-7

Derivatives - non monetary result

76

-129

Unrealized foreign exchange gains and losses, net

-100

122

Impairment

0

2

Other non-monetary items

-42

33

Share of (profits) losses of associates

-7

-1

Deferred taxes

80

33

Financial Capacity

986

645

Of which discontinued operations

0

9

(Increase) / decrease in inventories

-54

-76

(Increase) / decrease in trade receivables

-292

-238

Increase / (decrease) in trade payables

-31

33

Change in other receivables and payables

1,203

1,074

Change in working capital requirements

826

793

Change in working capital from discontinued operations

0

2

Net cash flow from operating activities

1,812

1,440

Purchase of property, plant and equipment and intangible assets

-1,208

-1,152

Proceeds on disposal of property, plant and equipment and intangible assets

64

96

Proceeds on disposal of subsidiaries, of shares in non-controlled entities

2

4

Acquisition of subsidiaries, of shares in non-controlled entities

0

-4

Dividends received

1

3

Decrease (increase) in net investments, more than 3 months

-258

681

Net cash flow used in investing activities of discontinued operations

0

-5

Net cash flow used in investing activities

-1,399

-377

Sale of minority interest without change in control

0

0

Issuance of debt

324

686

Repayment on debt

-90

-720

Payment of debt resulting from finance lease liabilities

-302

-241

Decrease (increase ) in loans, net

-50

-12

Dividends and coupons on perpetual paid

-1

-1

Net cash flow used in financing activities of discontinued operations

0

-6

Net cash flow from financing activities

-119

-294

Effect of exchange rate on cash and cash equivalents and bank overdrafts

-21

-23

Effect of exch. rate on cash and cash eq. and bank overdrafts of disc. ops.

0

-1

Change in cash and cash equivalents and bank overdrafts

273

745

Cash and cash equivalents and bank overdrafts at beginning of period

3,933

3,073

Cash and cash equivalents and bank overdrafts at end of period

4,206

3,819

Change in treasury of discontinued operations

 

-1


 

KEY FINANCIAL INDICATORS

 

EBITDA and EBITDAR

In million euros

Q2 2017

Q2 2016

H1 2017

H1 2016

Income/(loss) from current operations

496

317

353

218

Amortization, depreciation and provisions

417

411

829

776

EBITDA

913

728

1,182

994

Aircraft operating lease costs

277

263

562

528

EBITDAR

1,190

991

1,744

1,522

Restated net result, group share

In million euros

Q2 2017

Q2 2016

H1 2017

H1 2016

Net income/(loss), Group share

367

41

151

(114)

Net income/(loss) from discontinued operations

8

(3)

8

(2)

Unrealized foreign exchange gains and losses, net

(109)

149

(100)

122

Change in fair value of financial assets and liabilities (derivatives)

5

(91)

28

(129)

Non-current income and expenses

(7)

(18)

(8)

99

Depreciation of shares available for sale

0

0

0

0

De-recognition of deferred tax assets

0

0

0

0

Restated net income/(loss), group share

264

78

79

(24)

Restated net income/(loss) per share (in €)

 

 

0.22

(0.12)

Return on capital employed (ROCE)

In million euros

30 Jun. 2017

30 Jun. 2016

30 Jun. 2016

30 Jun. 2015*

Goodwill and intangible assets

1,309

1,238

1,238

1,270

Flight equipment

9,632

9,192

9,192

8,843

Other property, plant and equipment

1,455

1,494

1,494

1,720

Investments in equity associates

294

73

73

131

Financial assets excluding shares available for sale, marketable securities and financial deposits

203

204

204

200

Provisions, excluding pension, cargo litigation and restructuring

(1,628)

(1,558)

(1,558)

(1,510)

WCR, excluding market value of derivatives

(6,136)

(5,897)

(5,897)

(5,923)

Capital employed before operating leases

5,129

4,746

4,746

4,731

Operating leases x7

7,756

7,343

Average capital employed (A)

12,694

12,082

Adjusted results from current operations

1,561

1,592

- Dividends received

(2)

(2)

- Share of profits (losses) of associates

0

(16)

- Tax recognized in the adjusted net result

(293)

(165)

Adjusted result from current operations after tax (B)

1,266

1,409

ROCE, trailing 12 months (B/A)

10.0%

11.7%

*  Reclassification of Servair as a discontinued operation


 

Net debt

Balance sheet at

(In million euros)

30 June 
2017

31 December  2016

Current and non-current financial debt

8,258

8,452

Deposits on aircraft under finance lease

(337)

(336)

Financial assets pledged (OCEANE swap)

0

0

Currency hedge on financial debt

(12)

(49)

Accrued interest

(50)

(89)

Gross financial debt (A)

7,859

7,978

Cash and cash equivalents

4,217

3,938

Marketable securities

81

53

Cash pledges

258

50

Deposits (bonds)

361

298

Bank overdrafts

(11)

(5)

Other

(3) 

(11)

Net cash (B)

4,903

4,323

Net debt (A) - (B)

2,956

3,655

 

Adjusted net debt and adjusted net debt/EBITDAR ratio

Trailing 12 months

30 June 
2017

31 December  2016

Net debt (in €m)

2,956

3,655

Aircraft operating leases x 7 (in €m)

7,756

7,511

Adjusted net debt (in €m)

10,712

11,166

EBITDAR (in €m)

4,009

3,787

Adjusted net debt/EBITDAR ratio

2.7 x

2.9 x

Operating free cash flow

In million euros

Q2 2017

Q2 2016

H1 2017

H1 2016

Net cash flow from operating activities, continued operations

924

689

1,812

1,429

Investment in property, plant, equipment and intangible assets

(614)

(545)

(1,208)

(1,152)

Proceeds on disposal of property, plant, equipment and intangible assets

29

33

64

96

Operating free cash flow

339

177

668

373

Lease adjusted operating result

In million euros

Q2 2017

Q2 2016

H1 2017

H1 2016

Operating result

496

317

353

218

Aircraft operating leases x 1/3

92

88

187

176

Lease adjusted operating result

588

405

540

394

Lease adjusted operating margin

8.9%

6.5%

4.4%

3.3%


 

Unit cost: net cost per EASK

Q2 2017

Q2 2016

H1 2017

H1 2016

Revenues (in €m)

6,605

6,215

12,314

11,820

Income/(loss) from current operations  (in €m)

496

317

353

218

Total operating expense (in €m)

-6,109

-5,898

-11,961

-11,602

Passenger network business - other revenues (in €m)

191

207

381

406

Cargo business - other revenues (in €m)

36

42

75

79

Third-party revenues in the maintenance business (in €m)

440

435

900

866

Transavia - other revenues (in €m)

0

1

9

8

Third-party revenues of other businesses (in €m)

8

10

19

22

Net cost  (in €m)

5,434

5,203

10,577

10,221

Capacity produced, reported in EASK*

90,293

86,234

169,900

163,678

Net cost per EASK (in € cents per EASK)

          6.01  

           6.03  

          6.22  

        6.24  

Gross change

 

-0.4%

 

-0.3%

Currency effect on net costs (in €m)

 

75

 

168

Change at constant currency

 

-1.8%

 

-1.9%

Fuel price effect (in €m)

 

-74

 

-94

Change on a constant currency and fuel price basis

 

-0.4%

 

-1.0%

Change in pension-related expenses (in €m)

 

-10

 

-8

Net cost per EASK on a constant currency, fuel price and pension-related expenses basis (in € cents per EASK)

          6.01  

6.03  

          6.22  

        6.28  

Change on a constant currency, fuel price and pension-related expenses basis

 

-0.3%

 

-1.0%

* The capacity produced by the transportation activities is combined by adding the capacity of the Passenger network (in ASK) to that of Transavia (in ASK) and the Cargo business (in ATK) converted into EASK based on a separate fixed factor for Air France and for KLM..

 

 

INDIVIDUAL AIRLINE RESULTS

 

Air France

 

Q2 2017

Change

H1 2017

Change

Revenue (in €m)

3,980

+4.1%

7,572

+2.7%

EBITDA (in €m)

454

+72

589

+57

Operating result (in €m)

184

+83

61

+46

Operating margin

4.6%

+2.0 pt

0.8%

+0.6 pt

Operating cash flow before WCR and restructuring cash out (in €m)

369

+49

515

+2

Operating cash flow (before WCR and restructuring) margin

9.3%

+0.9 pt

6.8%

-0.2 pt

 

 

KLM

 

Q2 2017

Change

H1 2017

Change

Revenue (in €m)

2,699

+9.4%

4,907

+6.6%

EBITDA (in €m)

456

+115

588

+129

Operating result (in €m)

317

+103

301

+94

Operating margin

11.7%

+3.0 pt

6.1%

+1.6 pt

Operating cash flow before WCR and restructuring cash out (in €m)

415

+110

528

+144

Operating cash flow (before WCR and restructuring) margin

15.4%

+3.0 pt

10.8%

+2.4 pt

 NB: Sum of individual airline results does not add up to Air France-KLM total due to intercompany eliminations at Group level.

 

 


 

GROUP FLEET AT 30 JUNE 2017

 

Aircraft type

Air France

Group

KLM Group

Transavia

Owned

Financial
lease

Operating

lease

Total

In operation

Change /  31/12/16

B747-400

 

16

 

16

 

 

16

15

-2

B777-300

43

13

 

9

25

22

56

56

1

B777-200

25

15

 

19

10

11

40

40

 

B787-9

2

8

 

 

2

8

10

10

2

A380-800

10

 

 

1

4

5

10

10

 

A340-300

10

 

 

5

5

 

10

9

-1

A330-300

 

5

 

 

 

5

5

5

 

A330-200

15

8

 

5

6

12

23

23

 

Total Long-Haul

105

65

 

55

52

63

170

168

0

B737-900

 

5

 

1

1

3

5

5

 

B737-800

 

27

62

17

12

60

89

89

9

B737-700

 

18

8

3

8

15

26

26

 

A321

20

 

 

10

1

9

20

20

 

A320

42

 

 

4

3

35

42

42

1

A319

38

 

 

19

6

13

38

38

 

A318

18

 

 

11

7

 

18

18

 

Total Medium-Haul

118

50

70

65

38

135

238

238

10

ATR72-600

6

 

 

 

 

6

6

6

1

ATR72-500

4

 

 

1

2

1

4

4

-1

ATR42-500

11

 

 

5

2

4

11

11

-1

Canadair Jet 1000

14

 

 

14

 

 

14

14

 

Canadair Jet 700

11

 

 

11

 

 

11

11

 

Embraer 190

10

30

 

5

14

21

40

40

 

Embraer 175

 

9

 

5

4

 

9

9

5

Embraer 170

15

 

 

8

2

5

15

15

 

Embraer 145

18

 

 

14

4

 

18

13

-2

Embraer 135

4

 

 

4

 

 

4

 

 

Fokker 70

 

9

 

9

 

 

9

9

-2

Total Regional

93

48

0

76

28

37

141

132

0

B747-400ERF

 

3

 

3

 

 

3

3

 

B747-400BCF

 

1

 

 

 

1

1

1

 

B777-F

2

 

 

2

 

 

2

2

 

Total Cargo

2

4

0

5

0

1

6

6

0

 

 

 

 

 

 

 

 

 

 

Air France-KLM

318

167

70

201

118

236

555

544

10

 

 

 



[1] Based on the forward curve of July 14th 2017, Full Year 2017 average Brent price of USD 51, average jet fuel market price of USD 490 per ton. Assuming exchange rate of USD 1.12 per euro for July-December 2017 period.



AIR FRANCE-KLM: 2017 H1 RESULTS



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