Aeroflot reports net profit for 1H 2016 RAS financial results

PJSC Aeroflot (Moscow Exchange: AFLT) today published its financial results for the first six months of 2016 in accordance with Russian Accounting Standards (RAS). RAS results are presented on a non-consolidated basis.

6M 2016 Highlights:

• Revenue stood at RUB 194,150 million, an increase of 24.0% year-on-year, driven by growth of operational indicators during the period, including a 12.2% year-on-year rise in Aeroflot airline’s passenger traffic, as well as a significant FX effect from the portion of PJSC Aeroflot’s revenue denominated in foreign currency;
• Cost of sales was RUB 175,021 million, up 18.5% year-on-year, due to higher operating volumes, increased fleet size, as well as the FX effect from costs incurred in currencies other than the Russian ruble;
• Gross profit increased by 2.14x to RUB 19,129 million, reflecting the faster growth of revenue vs. costs thanks to effective management of key costs and growing passenger volumes, as well as the factors described above;
• Net profit was RUB 8,013 million, compared to a net loss of RUB 1,063 million for the first six months of 2015. This was due to stronger operating results and additional income such as the sale of airplanes under finance lease agreements and the return of deposits paid for the delivery of airplanes (PDP), which caused a positive FX effect.
• Basic earnings per share were RUB 7.22, compared to a loss per share of RUB 0.96 for the first six months of 2015.

Shamil Kurmashov, PJSC Aeroflot Deputy CEO for Commerce and Finance, said:

“Today we are publishing our financial results prepared under Russian Accounting Standards for the first half of 2016. Our strong financial results were driven primarily by our high operational results, with rising passenger numbers and a higher load factor. During the first half of the year, Aeroflot airline grew passenger traffic by 12.2% to 13.4 million, while the load factor increased by 2.0 p.p. to 78.9%. For Aeroflot Group passenger numbers grew by 10.3% to 19.7 million, with the load factor up by 2.9 p.p. at 78.6%. A significant role in the achievement of these results was played by our programme to introduce the latest digital technologies into the company’s management processes; as a result, Aeroflot has achieved a high level of digitalisation of its business processes. Effective management of operational capacities and cost-management programmes based on digital solutions launched last year, as well as an improvement in the economic environment and effective fleet management, FX effects on return of pre-delivery payments paid earlier for the supply of airplanes, and other one-off factors, helped us to achieve a net profit of RUB 8.0 billion for the first half. We continue to focus on maintaining current trends and believe that the positive results of this reporting period will enable us to report improved results for the financial year as a whole and to resume payments of dividends to shareholders of PJSC Aeroflot.”