euro adhoc: SkyEurope Holding
Financial Figures/Balance Sheet
SkyEurope
completes its first full financial year as a listed company focusing in growth
and investments in a platform for profitability
Passenger growth four times higher than easyJet
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
30.11.2006
SkyEurope Holding AG, the largest low-cost, low-fare airline in Central and Eastern Europe, publishes today its preliminary results for the financial year ended on 30 September 2006, its first full financial year as a listed company in the Vienna and Warsaw stock exchanges.
Development of operations The fifth financial year in the history of SkyEurope was characterized by strong growth and significant investments, with the addition of 35 new routes to the network, bringing the total to 79, the opening of a new base in Prague and the introduction of the first 5 Boeing 737-700 Next Generation to the fleet.
Over the period, SkyEurope transported 2.6 million passengers (of which nearly one million in Q4 2006 alone), an increase of 48% over the previous year, a rate four times higher than easyJet. This passenger growth was supported by a capacity increase of 44% in the year to 3,703 million ASK (42% increase in Q4 2006 to 1,323 million).
The opening of new routes, particularly those from the new base in Prague, and the introduction of new aircraft in the fleet have allowed to reduce the stage length by 10% in the year to 1,055 kilometres (-10% in Q4 2006 to 1,075 km) and increase aircraft utilisation by 12% in the year to 9:29 block hours per day (+18% in Q4 2006 to 11:23). However, the high proportion of new (non-mature) routes for the year and increased capacity per flight from the new aircraft have negatively impacted short term load factors, which have declined by 2.1 pp for the year to 75.6% (2.7 pp decline in Q4 2006 to 83.9%).
The Company is already addressing this issue through a more efficient commercial strategy led by Karim Makhlouf, SkyEuropes Chief Commercial Officer since September 2006, already succeeding in improving load factors by +6 pp in October 2006. This favourable trend is expected to continue over the rest of the winter, further supported by slowed capacity growth year on year.
Financial development Revenues for the FY 2006 increased by 41% to EUR 158.6 million, with revenue per ASK declining by 2.6% to EURc 4.28, as flat yields year on year (at EURc 5.66) did not offset the decline in load factor. This trend is expected to be reversed in FY 2007, with maturing routes, increased load factors, development of ancillary revenue opportunities and improved network planning and revenue management.
Unit costs ex-fuel were reduced in FY 2006 by 1% to EURc 4.12 per ASK. Efficiency gains from the new fleet and general cost management offset increases in pilot costs, investments made in growth and costs related to fleet renewal (Boeing 737 Classics redelivery expenses amounted to EUR 3.5 million in FY 2006). Unit costs also decreased across all major cost categories in Q4 2006, excluding the impact of redelivery expenses and costs associated with the September 2006 public equity offering. For the FY 2007, SkyEurope targets to reduce its unit costs (ex-fuel) by a further 5%.
Unit fuel costs increased by 6.4% in FY 2006, despite a 22% increase in fuel prices for the year, reflecting the positive effect of hedges for the period from March to May 2006 and the lower fuel consumption from the new aircraft. As SkyEurope continues to renew its fleet and with 95% of its expected fuel consumption for the period November 2006 to March 2007 hedged at US$62.5/bbl equivalent, fuel costs for FY 2007 are also expected to decline.
With total operating expenses in FY 2006 of EUR 213.8 million, the EBIT amounted to EUR -55.2 million (EUR -6.3 million in Q4 2006). These figures include redelivery expenses of EUR 3.5 million, as previously noted. The Groups net loss for the FY 2006 came to EUR -57.3 million (EUR -7.1 million in Q4 2006).
Development of the groups property In September 2006, SkyEurope strengthened its balance sheet by raising EUR 56.3 million of financing through a public offer of 10 million new shares (at a price of EUR 1.75 each) and the investment by York Capital Management (through York Global Finance II) of EUR 38.8 million through an equity participation in SkyEurope of 23.06%, with the balance in convertible bonds. York is a financial investor with a long-term perspective, who is now represented on SkyEuropes Supervisory Board, with two representatives. This financing step will strengthen the position of SkyEurope and will enable the Company to continue pursuing its growth strategy on the basis of a stronger balance sheet structure.
Outlook In the financial year 2007, SkyEurope will be supported by its strengthened management team and Supervisory Board to develop its operations with a strong focus on achieving positive EBITDAR for the year, through improved revenue management, a load factor active policy and strict cost control.
CEO Christian Mandl stated that "in the past year we succeeded in continuing our growth. It is important now to consolidate our position as the leading profitable low-cost carrier in Central and Eastern Europe. Having bolstered our Management by new expertise and having found a strong investor in York we are well-equipped for this task".
This press release contains unaudited financial information. SkyEurope Holding AG will publish its audited FY 2006 results and annual report on 10 January 2007
2005 2006 +/- Q4 06 Passengers millions 1.7 2.6 +48.2% 1.0 ASK million km 2,563 3,703 +44.5% 1,323 RPK million km 1,991 2,801 +40.7% 1,110 Load factor % 77.7 75.6 (2.1 pp) 83.9 Revenues million EUR 112.7 158.6 +40.7% 63.0 EBITDAR million EUR (10.7) (21.3) n.m. 4.9 EBIT million EUR (33.6) (55.2) n.m. (6.3) Net loss for the period million EUR (28.6) (57.3) n.m. (7.1)
end of announcement euro adhoc 30.11.2006 08:00:00
Further inquiry note:
SkyEurope Holding AG
Mag. Erhard Schmidt, CFO
Tel.:+421 2 4850 1180
mailto:investor.relations@skyeurope.com
http://www.skyeurope.com
Branche: Air Transport
ISIN: AT0000497003
WKN: A0F5WU
Index: WBI
Börsen: Wiener Börse AG / official market