euro adhoc: SkyEurope Holding
quarterly or semiannual financial statement /
SkyEurope H1 2007 Report
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
6-month report
31.05.2007
Report on the First Half (H1) of the Financial Year 2007
SkyEurope significantly improves H1 Margin while delivering substantial growth.
EBITDAR margin improves by 22.8pp, reducing significantly the EBITDAR loss (H1 2007 EUR 17.2 million vs H1 2006 EUR 26.3 million) despite additional capacity and new markets. EBIT margin also improves by 20.5pp. Growth is maintained with revenues increasing by 35.1%, while passengers flown grows to 1.2 million from 0.87 million and at the same time achieving a much improved load factor of 79.7% (up from 68.4%). Revenue per available seat kilometre improves 13.8%. Flights from Vienna commenced in March, taking advantage of the low penetration of low cost carriers at the Vienna Airport and capitalising on the high revenue potential of a larger catchment area. Utilisation improving by 15.2% to 9:22 hours with continued focus put on efficient operations. On-time performance improves making SkyEurope one of the most punctual airlines in Europe. Continuing deliveries of new 737-700 NG Aircraft improves average age of fleet to 3.7 yrs (easyJet: 2.3 yrs), one of the youngest in Europe and is expected to be fully renewed and even younger (average age of less than 1 year) by the end of the CY. Strengthened management team with appointment of former easyJet CFO, Nick Manoudakis. Full year guidance is maintained with full year EBITDAR expected to be positive with an EBIT positive 4th quarter.
FINANCIAL CALENDAR
31 August 2007 3rd Quarter 2007 30 November 2007 Preliminary results for 2007 10 January 2008 2007 Annual Report
FINANCIAL HIGHLIGHTS OF THE GROUP for the first half of 2007
In thousands of EUR, unaudited
(6 months ended) 31 March 2007 31 March 2006 Change %
Financial data Operating revenue 80,622 59,678 35.1% EBITDAR (17,225) (26,336) 34.6% EBITDAR margin (21.4%) (44.1%) 22.8pp EBIT (29,994) (34,410) 12.8% EBIT margin (37.2%) (57.7%) 20.5pp
Equity (18,210) 326 n.m. Cash and cash equivalents 30,889 14,815 108.5%
Operating data Average no. of aircraft 12.0 12.8 (5.9%) No. aircraft at period end 14 13 7.6% Passengers 1,246,845 866,843 43.8% Aircraft utilisation (BH per day) 9:22 8:08 15.2% ASK (million km) 1,622 1,366 18.7% RPK (million km) 1,293 934 38.3% Load factor (RPK/ASK) 79.7% 68.4% 16.5% Revenue per ASK (EURc) 4.97 4.37 13.8% Yield in EURc (Rev./RPK) 6.24 6.39 (2.3%) Average revenue per PAX (EUR) 64.7 68.8 (6.1%) Cost per ASK (EURc) 6.82 6.89 (1.0%) Cost per ASK ex fuel (EURc) 5.35 5.27 1.6% Sectors 11,053 9,929 11.3% Average stage length, Boeing fleet (km) 1,023 1,048 (2.4%)
*Note: Certain reclassifications were made in H1 2007 affecting several of the reported items. The comparative information has been restated where applicable. See note 2(a) of the accompanying financial statements.
Operating and financial review of H1 2007 compared with H1 2006
Overview
Network and fleet
In March 2007, SkyEurope commenced flights from Vienna, capitalising on the high revenue potential of the larger Vienna/Bratislava catchment area (6 million inhabitants) and the low penetration of low cost carriers at the Vienna Airport. This has further strengthened the Company´s position as the leading low cost carrier in the region.
With the addition of flights from Vienna, SkyEurope now flies a total of 92 routes to 39 destinations in 19 countries from our 4 European bases, Bratislava/Vienna, Prague, Budapest, and Krakow.
At 31 March 2007 our network was serviced by fourteen 737 aircraft. Ten of these aircraft were Boeing 737-700 NGs financed through operating leases with GE Commercial Aviation Services (an additional two were delivered prior to 31 May 2007). The remaining four Boeing Classics are on operating lease and are expected to be redelivered before the end of the fiscal year.
SkyEurope currently has fourteen additional aircraft on firm order to be delivered in 2007 through 2010 and an additional six Boeing purchase options that are expected to be exercised in FY 2008. In total, we expect to have 32 aircraft in our fleet by 2011.
Management
In May 2007, Nick Manoudakis was appointed as SkyEurope´s Chief Financial Officer. Having graduated with highest honours from the University of California at Berkeley with a degree in Accounting, Finance, and Computer Science, Nick practiced as a CPA in the U.S. before joining a small team to help devise the overall business plan for what in 1995 became easyJet. Nick was the airline´s Finance Director between 1995 and the end of 1999 when he became the Finance Director of easyGroup, acting as a CFO for several of their ventures. Nick´s experience as a founding and key member of easyJet, one of the pioneers of low cost air travel in Europe, will add value to SkyEurope which will greatly benefit from Nick´s aviation background and depth of experience.
In addition, SkyEurope further strengthened its revenue management team by adding Navin Kodkani to lead the revenue management team. Navin previously worked at PremiumAir and SWISS Air and brings to SkyEurope over 10 years experience in revenue management.
SkyEurope continually strives to recruit and develop outstanding people and considers its people to be the Company´s most important assets for future success.
Outlook
For the remainder of the year, SkyEurope´s strengthened revenue management and financial teams will continue with the implementation of a load factor active policy, targeting an average load factor above 80% for the remainder of the fiscal year 2007 and will place additional focus on improving network efficiency.
By the end of FY 2007, SkyEurope expects to have fully renewed its fleet with new Boeing 737-700 NGs, thereby operating with one of the youngest fleets among European airlines. This will help to improve utilisation and further reduce unit fuel and maintenance costs. The airline will also place increasing focus in achieving substantial improvements in other components of the cost base by simplifying operations; eliminating non-value adding activities; improving airport and ground handling charges and reducing overheads.
With the overall improvements in revenue and a rigorous cost savings programme, the Company maintains guidance for delivering a significant improvement in financial performance in coming months, and is on track to deliver a positive EBITDAR for the FY 2007 and an EBIT positive 4th quarter.
Key Performance Indicators
Available seat kilometre ("ASK")Available seat kilometre is an indicator used by management to measure units of productive output. It represents the seating capacity of our aircraft multiplied by the number of kilometres flown. Despite the reduction in the average number of aircraft operated (12 in H1 2007 vs. 12.8 in H1 2006), the introduction of 10 (larger) Boeing 737 NG aircraft and an increase in average daily utilisation by 15.2% to 9:22 hours per day (8:08 hours in H1 2006), resulted in an 18.7% increase in capacity for the H1 2007 period to 1.62 million ASKs (1.37 million in H1 2006).
Revenue per available seat kilometre ("RASK")Revenue per available seat kilometre represents total passenger revenue divided by ASKs and is considered by management one of the best measures of revenue. It is a compensating indicator between load factor and average revenue per passenger.
Revenue per available seat kilometre increased by 13.8% from EURc 4.37 in H1 2006 to EURc 4.97 in H1 2007. This was mainly due to the 16.5% increase in load factor achieved during H1 2007.
Cost per available seat kilometre
Cost per available seat kilometre represents total operating expenses divided by ASKs and management considers movements in cost per available seat kilometre to be the best indicator of management's performance in keeping unit costs low.
Cost per available seat kilometre decreased by 1% from EURc 6.89 in H1 2006 to EURc 6.82 in H1 2007. Cost reductions in aircraft fuel, ground handling, maintenance and administration expenses were offset by more expensive leased aircraft added to fleet, higher airport charges, and targeted increases in sales and marketing in order to strengthen the SkyEurope brand.
Load factor
Load factor represents the average percentage of aircraft seating capacity that is actually utilised, calculated by dividing revenue passenger kilometres by available seat kilometres.
In H1 2007, the Company implemented a "load factor active" policy resulting in an increase in the passenger numbers and overall revenue per available seat kilometre. As a result of this, load factors increased from 68.4% in H1 2006 to 79.7% in H1 2007.
Income statement
Revenue
SkyEurope´s total revenue has increased by 35.1% from EUR 59.7 million in H1 2006 to EUR 80.6 million in H1 2007. RASK increased by 13.8% from EURc 4.37 to EURc 4.97.
Scheduled revenue includes the base fare and booking fees/surcharges net of any implied government taxes. The 30.6% increase in scheduled revenue in H1 2007 vs H1 2006 was driven by a 43.8% increase in passengers from 0.87 million to 1.2 million. The increase in passengers carried reflects a 15.2% improvement in aircraft utilisation from an average of 8:08 hours per day in H1 2006 to 9:22 hours in H1 2007 as well as an increase in load factor from 68.4% to 79.7%. The very significant growth in traffic for the period was partly stimulated by promotional fares for the seasonally weak first half, resulting a 2.3% erosion in yield (total revenue divided by revenue passenger kilometres), which was fully offset by the 11.3pp increase in load factor.
Ancillary revenue includes fees and charges (including credit card surcharges, excess baggage charges, seat assignment fees, sporting equipment charges, infant fees, change fees), profit share from in-flight sales (including food, beverages, and boutique items), cargo, and commissions received from products and services sold (such as hotel bookings, car rental bookings and travel insurance). Total Ancillary revenues per passenger grew very significantly by 67.6%% in H1 2007 vs H1 2006 which can be attributed to an enhanced portfolio of products offered to customers, including seat assignment, car rental and hotel bookings, options which are available through SkyEurope´s website.
Charter revenue consists of aircraft capacity sold to third parties or tour operators. The charter season is typically the summer season (Q3 and Q4) and therefore there has been no significant changes in total charter revenue in H1 2007 vs H1 2006 (EUR 2.5 million in H1 2007 vs 1.2 million in H1 2006).
Salaries, wages and benefits
Salaries wages and benefits include all crew, maintenance, sales and overhead salaries and related costs and have increased by 21.4% from EUR 10 million to EUR 12.1 million from H1 2006 to H1 2007. This increase reflects an increase in crew numbers due to increased flying activities in addition to salary increases made to pilots and mechanics during the H1 2007 to bring the compensation to competitive levels. Staff costs per ASK has increased from EURc 0.73 to EURc 0.75.
Aircraft fuel
SkyEurope´s fuel costs increased by 7.6% from EUR 22.1 million to EUR 23.8 million from H1 2006 to H1 2007 primarily due to an increase in sectors flown, however SkyEurope benefited from more modern and fuel efficient aircraft and a weakening US$/Euro exchange rate. On a per ASK level, costs decreased by 9.4% from EUR 1.62 to EUR 1.47.
SkyEurope has hedged approximately 90% of the planned fuel consumption for the FY 2007 at an average price of USD 62.5 bbl/equivalent.
Aircraft rental
Aircraft rental includes the fixed monthly operating leasing expense paid to the Company´s lessors. The increase in aircraft rental expense by 61.5% despite a decrease in the average number of aircraft in the fleet is due to a higher proportion of more expensive aircraft being used (Boeing 737-700 NG aircraft vs Boeing Classics). On a cost per ASK basis, aircraft rental expenses have increased by 36% from EURc 0.56 in H1 2006 to EURc 0.76 in H1 2007.
SkyEurope is on track to increase its aircraft utilization even more, which will substantially reduce rental cost per ASK.
Sales and marketing
Sales and marketing expenditures include marketing costs, fees paid to credit card providers, external call centres, reservation system providers, and other sales and marketing related costs. These costs have increased as expected due to higher booking related costs (credit card commissions and call centre fees) attributable to higher passenger numbers and load factors and targeted efforts made to further promoting SkyEurope´s brand in key markets. Sales and marketing costs increased by 42.5% from EUR 5.1 million in H1 2006 to EUR 7.2 million in H1 2007. Sales and marketing expenses per ASK increased 20% from EURc 0.37 to EURc 0.45.
Ground handling charges
Ground handling charges have increased by 12% from EUR 7.5 million in H1 2006 to EUR 8.4 million in H1 2007 due primarily to an increase in the number of sectors flown which increased 11.3%. On an ASK basis, ground handling charges have decreased from EURc 0.06 to EURc 0.05.
Airport charges
Airport charges which represent landing fees (fixed turnaround charges) and per passenger fees charged by airports have increased by 56% from EUR 13.4 million in H1 2006 to EUR 20.9 million in H1 2007 driven by a 43.8% increase in passengers carried resulting in higher total per passenger charges. Airport charges per ASK have increased 31.5% from EURc 0.98 to EURc 1.29.
Navigation charges
SkyEurope´s navigation charges which include over-flight fees, air traffic control and approach fees increased by 22% from EUR 7.8 million in H1 2006 to EUR 9.5 million in H1 2007. The increase was primarily due to a 18.7% increase in ASKs flown and a higher average maximum take off weight of Boeing 737-700s vs Boeing Classics. On a cost per ASK basis, navigation charges increased by 2.5% from EURc 0.57 to EURc 0.58.
Maintenance, materials and repairs
SkyEurope´s maintenance expense consists primarily of the cost of routine maintenance and spare parts; provisions for the estimated future cost of heavy maintenance and engine overhauls on aircraft; and advance maintenance payments made to operating lessors charged based on the number of flight hours and cycles flown during the month.
Significant maintenance expenses were incurred during H1 2007 due to redelivery of some Boeing Classics, however this has been offset by the effect of lower maintenance costs on newer and more reliable aircraft and improved maintenance contracts with suppliers which lower our variable maintenance costs. Overall, maintenance expenses have slightly decreased despite increasing aircraft utilization, falling 2% from EUR 11.4 million to EUR 11.2 million from H1 2006 to H1 2007. On a per ASK basis, costs decreased by 17.4% from EURc 0.84 to EURc 0.69.
Aircraft and passenger insurance
Aircraft and passenger insurance costs reduced by 4% from EUR 1 million in H1 2006 to EUR 0.9 million in H1 2007, despite a 43.8% increase in passenger numbers. This was a result of lower rates being negotiated with insurance suppliers and and the effect of the strengthening Euro against the US dollar. On a per ASK basis, costs reduced by 19.2% from EURc 0.07 to EURc 0.06.
Administrative expenses
Administrative expense decreased significantly by 53% from EUR 7.6 million to EUR 3.6 million from H1 2006 to H1 2007 due to efforts taken to control overheads. Items in this cost category include administrative costs, professional fees and operational costs not included elsewhere. On a per ASK basis, costs decreased by 60.1% from EUR 0.56 to EUR 0.22.
Depreciation and amortization
Depreciation relates to charges taken on depreciable fixed assets consisting of software, office equipment, and leasehold improvements. There was no significant change to depreciation and amortization expense during the period.
Interest and other finance charges
Interest and other finance charges represents interest paid or payable by SkyEurope offset by the revaluation of financial assets and liabilities. Finance charges relate predominantly to accumulated interest expense on convertible bonds issued in connection with the Company´s secondary public offering.
Loss per share
The basic loss per share decreased by 50.6% from EUR 1.68 in H1 2006 to EUR 0.83 in H1 2007.
Balance sheet
Property, plant and equipment
Property, plant and equipment includes principally predelivery payments made to Boeing for aircraft to be delivered in future periods which are not expected to be financed through sale and leaseback transactions and other depreciable assets including software, office equipment and leasehold improvements.
The net book value of property, plant and equipment increased from EUR 17.7 million at 30 September 2006 to EUR 43.4 million at 31 March 2007 due to additional predelivery payments made to Boeing during the period.
Deposits and other long-term receivables
Long-term receivables and other assets consist principally of deposits paid to lessors for aircraft under operating lease and other long-term deposits paid to suppliers. The deposits increased from EUR 8.3 million at 30 September 2006 to EUR 10 million at 31 March 2007 due to the delivery of new aircraft financed on operating lease.
Deferred tax assets
Deferred tax assets result primarily from the value of tax losses incurred in previous years available for carry forward. The Company has not recognized any new deferred tax assets during the half year ended 31 March 2007. The Company expects to generate sufficient taxable income in the future in order to utilize the deferred tax assets.
Trade and other receivables
Trade receivables represent receivables from tour operators, outsourced sales desks at airports, lessors, and other miscellaneous receivables arising in the normal course of operations. The increase in trade receivables from EUR 13.5 million at 30 September 2006 to EUR 15.5 million at 31 March 2007 is due to the increase in our business activities and hence our trade receivables.
Prepaid expenses
In accordance with industry practices, we pay many suppliers such as fuel suppliers and airports in advance and therefore we have a significant amount of prepaid expenses. The increase in prepaid expenses from EUR 25.5 million at September 2006 to 42.9 million at 31 March 2007 is due to an overall increase in the size of our operations (more airports and higher fuel consumptions) and the additional advance payments made for the historically busy spring and summer months.
Cash and cash equivalents
Cash and cash equivalents has decreased by 26% from EUR 41.8 million at 30 September 2006 to EUR 30.9 million at 31 March 2007 due to net operating cash outflow during H1 2007, however has increased significantly in comparison to H1 2006. This increase is due primarily to improvements in net cash operating cash-ins driven by advance bookings for the 3rd and 4th quarters.
Interest bearing loans and borrowings
Interest bearing loans and borrowings represent predelivery payment financing obtained from the Bank of Scotland Corporate for nine aircraft to be delivered in 2007 through 2009. Predelivery payments come due in intervals at scheduled dates prior to the delivery of the aircraft and thus interest bearing loans and borrowings has increased from EUR 10.9 million at 30 September 2006 to 36.8 million at 31 March 2007.
Of a total of fourteen aircraft on firm order, predelivery payment financing has been secured for nine aircraft and term loan financing for four aircraft.
Convertible bonds
The amount recorded as convertible bonds at 31 March 2007 represents the carrying value of Tranches A and B of the convertible debt, net of the portion of the convertible bond recognized directly in equity. The increase from 30 September 2006 represents interest accrued on the convertible bonds.
Maintenance provisions
Maintenance provisions represent liabilities recorded for future maintenance expenses. Amounts are classified as current if it is expected the future maintenance event will occur within 12 months of the balance sheet date and non-current if longer than 12 months.
Unearned revenue
Unearned revenue represents advance ticket sales made and has increased by 100% from EUR 23 million at 30 September 2006 to EUR 46 million at 31 March 2007, principally due to our strong growth and the seasonality of the business, which means there are more sales in advance at 31 March compared with 30 September each year.
Trade and other payables
Trade and other payables represents trade debt owed to our suppliers that arise in the normal course of business. The increase from EUR 53 million at 30 September 2006 to EUR 73.8 million at 31 March 2007 is due primarily to the growth of our business.
Equity
The current equity situation reflects the trading of the seasonally weak winter season and is expected to improve over the summer trading period. As we have a sufficient cash balance to meet our obligations as they come due, we comply with the trading rules of the Vienna or Warsaw stock exchanges where the Company is listed.
Cash flow
Cash flow from operating activities
As a result of the reduced operating loss for the period and a higher number of advance bookings, net cash outflow from operating activities improved and was EUR 14.0 million lower in H1 2007 than in H1 2006.
Cash flows from investing and financing activities
Cash out flows from investing activities represent predelivery payments made to Boeing for future aircraft deliveries. Financing has been secured for most of these predelivery payments and therefore cash-in from financing activities is approximately equivalent to the cash out from investing activities.
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENTS
In thousands of EUR 31 March 2007 31 March 2006 31 March 2007 31 March 2006 (IFRS, unaudited) 3 months 3 months 6 months 6 months
Operating revenue
Scheduled revenue 36,669 28,096 73,676 57,015
Ancillary revenue 2,129 881 4,482 1,486
Charter revenue 1,156 79 2,464 1,177
39,954 29,056 80,622 59,678Operating expenses Aircraft fuel (11,440) (10,194) (23,829) (22,140) Sales and marketing (3,954) (2,932) (7,248) (5,088) Ground handling charges (4,687) (3,428) (8,432) (7,519) Maintenance, material and repairs (6,682) (6,665) (11,218) (11,441) Salaries, wages and benefits (6,233) (5,426) (12,103) (9,970) Navigation charges (4,898) (3,934) (9,477) (7,788) Aircraft and passenger insurance (476) (510) (963) (1,004)
Administrative expenses (2,321) (5,655) (3,624) (7,646)
Airport charges (11,253) (6,688) (20,953) (13,418)
(51,944) (45,432) (97,847) (86,014)EBITDAR* (11,990) (16,376) (17,225) (26,336)
Depreciation and amortization (286) (278) (490) (472) Aircraft rental (5,531) (3,782) (12,279) (7,602)
Operating loss (EBIT) (17,807) (20,436) (29,994) (34,410)
Other income (expenses) Interest and other finance charges, net (847) 547 (2,463) (15)
Loss before income taxes (18,654) (19,889) (32,457) (34,425) Income tax credit - (1,677) - 816
Net loss for the period after tax (18,654) (21,566) (32,457)
(33,609)Weighted average number of ordinary shares at end of period 38,990,000 20,000,000 38,990,000 20,000,000
Basic and diluted loss per share (EUR) (0.49) (1.08) (0.83) (1.68)
*Note: Earnings before interest, taxes, depreciation, amortization, share profit of associates and lease payments (excluding the maintenance reserve component of operating lease payments). Maintenance reserve costs are charged to the costs heading "Maintenance, material and repairs".
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
In thousands of EUR (IFRS) 31 March 2007 30 Sep 2006
(unaudited) (audited)Assets Property, plant and equipment 43,438 17,710 Deposits and other long-term receivables 10,082 8,336 Deferred tax assets 10,264 9,251 Total non-current assets 63,784 35,297
Expendable spare parts and inventories 1,325 1,119 Trade and other receivables 15,481 13,555 Prepaid expenses 42,945 25,472 Cash and cash equivalents 30,889 41,789 Total current assets 90,640 81,935
Total assets 154,424 117,232
Equity Issued capital 38,990 38,990 Share premium 81,293 81,293 Reserves - cash flow hedges 1,899 (467) Retained losses (103,337) (46,045) Loss in current period (32,457) (57,292) Currency translation adjustment (4,598) (110) Total equity (18,210) 16,369
Liabilities Maintenance provisions 599 126 Other non-current liabilities 54 69 Interest bearing loans and borrowings 36,839 10,876 Convertible bonds 12,129 10,245 Total non-current liabilities 49,621 21,316
Maintenance provisions - current 2,904 3,644 Unearned revenue 46,308 22,673 Trade and other payables 73,801 53,230 Total current liabilities 123,013 79,547
Total equity and liabilities 154,424 117,232
CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS
In thousands of EUR 31 March 2007 31 March 2006 (IFRS, unaudited) 6 months 6 months
Net cash flow used in operating activities (11,752) (25,675) Net cash flow from investing activities (25,113) (5,473) Net cash flow from financing activities 25,965 248
Net cash flows (10,900) (30,900)
Cash and cash equivalents at beginning of period 41,789 45,715
Cash and cash equivalents at end of period 30,889 14,815
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS´ EQUITY
In thousands of EUR
(IFRS, unaudited) Issued capital Share premium Cash flow hedge reserve Retained losses Translation reserve Total
At 1 October 2006 38,990 81,293 (467) (103,337) (110) 16,369 Results from cash flow hedges taken to equity - - 2,366 - - 2,366 Translation reserve - - - - (4,488) (4,488) Loss for the period - - - (32,457) - (32,458)
At 31 March 2007 38,990 81,293 1,899 (135,794) (4,598) (18,210)
At 1 October 2005 20,000 59,819 - (46,059) 24 33,798 Results from cash flow hedges taken to equity - - 197 - - 197 Translation reserve - - - - (60) (60) Loss for the period - - - (33,609) - (33,609)
At 31 March 2006 20,000 59,819 197 (79,654) (36) 326
SELECTED NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Reporting Entity
SkyEurope Holding AG is a Group domiciled in Austria. The condensed consolidated interim financial statements of the Group as at and for the six months ended 31 March 2007 comprise the Group and its subsidiaries (together referred to as the "Group").
The consolidated financial statements of the Group as at and for the year ended 30 September 2006 are available upon request from the Group's operational headquarters at Ivanská cesta 26, P.O.Box 24, 820 01 Bratislava 21, Slovakia, or at www.skyeurope.com.
2. Significant accounting policies
Except as described below, the accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 September 2006.
a. Reclassification of income statement captions
For the 6 months ended 31 March 2007, the Group has made the following reclassifications within captions disclosed in the income statement:
Surcharges and booking fees have been reclassified from ancillary revenues to scheduled revenue;
Charter revenue previously classified as passenger revenue has now been disclosed separately on the face of the income statement;
Certain airport charges were netted against scheduled revenue in previous periods (against airport fee revenue classified within scheduled revenue) and have been reclassified to a new expense caption called "Airport Charges";
"Aircraft and traffic servicing" has been separated into additional income statement captions, "Ground handling charges, Aircraft insurance, and Navigation charges";
Variable payments made to lessors based on aircraft utilization have been reclassified from "Aircraft rental" to "Maintenance, materials and repairs". These changes do not have an impact on net income.
These changes have been made to comply with industry best practices and to allow more meaningful benchmarking of revenues and costs vs other airlines. This change is only a change in performance measures and does not have an impact on net income.
b. Reclassification of balance sheet captions
The Group has chosen to reclassify advance payments made to suppliers to "Prepaid expenses" from "Accounts Receivable" as it better reflects the nature of the asset.
end of announcement euro adhoc 31.05.2007 08:12:52
Further inquiry note:
SkyEurope Holding AG
Nick Manoudakis, CFO
Tel.:+421 2 4850 1332
mailto:investor.relations@skyeurope.com
http://www.skyeurope.com
Branche: Air Transport
ISIN: AT0000497003
WKN: A0F5WU
Index: WBI
Börsen: Wiener Börse AG / official market