Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Euronext Paris  >  Air France-KLM    AF   FR0000031122

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

Air France-KLM Pulls Out Of Nose Dive

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/30/2012 | 09:45am CEST

PARIS--Air France-KLM (>> AIR FRANCE -KLM) sank deeper into the red in the three months to June weighted own by higher fuel costs, provisions for restructuring, and an accounting charge, but investors took heart from signs that cost reductions have started to stabilize the Franco-Dutch carrier's finances.

Air France-KLM said it expects to feel the first positive effects of its latest cost-savings program, which involves the elimination of 5,122 jobs, in the second half of this year.

The airline operator reported a second-quarter net loss of EUR895 million ($1.1 billion), including EUR368 million in restructuring costs and a EUR372 million accounting charge, up from a net loss of EUR197 million a year earlier.

Revenue rose to EUR6.5 billion from EUR6.22 billion and the operating loss was EUR66 million, less than half the EUR145 million reported in the second quarter of 2011.

The carrier generated EUR461 million in free cash due to the sale of its stake in travel company Amadeus Holding SA (>> Amadeus IT Holding SA), allowing it to trim net debt to EUR6.24 billion at June 30 from EUR6.51 billion six months earlier.

Chief Financial Officer Philipped Calavia said other restructuring provisions will probably have to be taken in the second half, but added that the bulk of the costs related to staff departures were taken in the first half.

The positive news for the second quarter was that the pace of operating losses has slowed, Mr Calavia said.

Analysts agreed, with Air France-KLM shares surging 13% to EUR4.40 in morning trading on the Paris stock exchange.

"The better than expected performance looks to be principally driven by an improvement in ex-fuel constant currency unit costs, rather than an improvement in the revenue environment" said Oliver Neal, an analyst at Goldman Sachs in a report.

Still, Air France-KLM warned that it has work to do to return the business to profitability when fuel prices remain high and Europe's economic outlook is uncertain.

"Even though these second quarter results represent a year on year improvement, they remain in negative territory, said Air France-KLM Chairman Jean-Cyril Spinetta. "In an increasingly uncertain global economic environment, compounded by oil price and exchange rate volatility, an improvement in our productivity and costs is even more necessary."

Earlier Monday, budget carrier Ryanair Holdings PLC (RYA.DB) reported a 29% drop in net profit to EUR98.8 million as a 15% increase in fuel costs offset an 11% rise in revenue to EUR998 million in the three months to June 30. The carrier expects its net profit to decline to between EUR400 million and EUR440 million in the 2013 fiscal year to April, from EUR560.4 million in the previous year.

Ryanair has so far managed increased fuel costs better than many of the region's flag carriers, but the Dublin-based airline's results underscore how high oil prices are also eating into even budget airlines profits, costs which contributed to the demise of some smaller airlines like Hungary's Malev and Spain's Spanair.

Air France-KLM's fuel bill rose 13%, or EUR214 million, to EUR1.89 billion in the second quarter. The airline said it expects to see an improvement in the second half of this year as the effects of its Transform 2015 cost reduction program kick in, and said it is targeting an operating profit above the EUR195 million reported for the second half of 2011. It also said it expects to see a decline in the level of its net debt by year-end compared with the end of 2011.

Air France-KLM said it expects to see an improvement in the second half of this year as the effects of its Transform 2015 program kick in, and said it is targeting an operating profit above the 195 million reported for the second half of 2011. It also said it expects to see a decline in its net debt by the end of the year compared with the level at the end of 2011.

The airline group's French arm Air France has launched a tough two billion euro cost-savings program aimed at improving its economic efficiency by 20% compared to its main European competitors, in a bid to stem its operating losses and reduce its debt by two billion euros by 2015.

The airline has sought agreements from representatives of its pilots, ground staff and cabin crew to revise their work contracts, pledging there would be no compulsory job cuts. The latter group balked at the plan, however, meaning that management will be forced to impose more painful measures than if the unions had agreed to the deal.

-Write to David Pearson at [email protected]

Geraldine Amiel contributed to this story.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Stocks mentioned in the article : AIR FRANCE -KLM, Amadeus IT Holding SA
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on AIR FRANCE-KLM
06/21 HOPS HISTORY AND EVOLUTION IN BEER M : One of four key ingredients in beer, hops..
06/21 AIR FRANCE KLM : Aeroflot named Best Airline in Eastern Europe for sixth time at..
06/21 Embraer unveils new Asian, European orders
06/20 Embraer books $1 bln in orders, mostly next-gen jets
06/19 AIR FRANCE KLM : Craft beer explosion has hops growers looking at Virginia farmi..
06/18 AIR FRANCE KLM : Snow Hop Brewery plans opening in Helena Valley
06/17 AIR FRANCE KLM : Transavia Airlines adds B737NG capacity this summer
06/17 AIR FRANCE KLM : Take a drive from San Luis Obispo to Pismo Beach -- in 90 secon..
06/15 AIR FRANCE KLM : Idaho hop-growing acreage increased 27 pct. in 2017
06/13 AIR FRANCE KLM : Brexit uncertainty creates biggest risk for European airports
More news
Sector news : Airlines - NEC
12:17a American Airlines pushes back on Qatar Airways plan to buy stake
06/21 Boeing gets boost from United, lifts demand forecast
06/20 Embraer books $1 bln in orders, mostly next-gen jets
06/20 Lufthansa CEO sees record summer for bookings
06/19 SpiceJet in provisional deal for 40 Boeing 737 MAX 10 jets
More sector news : Airlines - NEC
News from SeekingAlpha
06/16 AIR FRANCE-KLM : Recent Growth Will Continue In The Long Term
05/31 AIRBUS : Paris Air Show 2017 Preview
05/19 Air France-KLM SA (AFRAF) Investor Presentation - Slideshow
05/07 Air France-KLM's (AFRAF) CFO Frédéric Gagey on Q1 2017 Results - Earnings Cal..
05/04 Air France-KLM 2017 Q1 - Results - Earnings Call Slides
Advertisement
Financials (€)
Sales 2017 25 458 M
EBIT 2017 1 056 M
Net income 2017 572 M
Debt 2017 3 625 M
Yield 2017 0,18%
P/E ratio 2017 6,32
P/E ratio 2018 5,44
EV / Sales 2017 0,27x
EV / Sales 2018 0,25x
Capitalization 3 353 M
More Financials
Chart AIR FRANCE-KLM
Duration : Period :
Air France-KLM Technical Analysis Chart | AF | FR0000031122 | 4-Traders
Full-screen chart
Technical analysis trends AIR FRANCE-KLM
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 22
Average target price 8,80 €
Spread / Average Target -21%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Jean-Marc Janaillac Chairman & Chief Executive Officer
Frédéric Gagey Chief Financial Officer
Jean-Christophe Lalanne Executive Vice President-Information Technology
Christian Magne Director
Maryse Aulagnon Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
AIR FRANCE-KLM115.89%3 645
DELTA AIR LINES, INC.7.36%38 098
RYANAIR HOLDINGS PLC29.96%25 255
UNITED CONTINENTAL HOL..6.27%23 930
AIR CHINA LTD.35.28%18 589
INTERNATIONAL CONSOLID..35.18%15 740
More Results