PJSC Aeroflot (Moscow Exchange ticker: MOEX) announces the results of a meeting of its Board of Directors held on 15 March 2018. The meeting was chaired by Mikhail Poluboyarinov.
The meeting agenda included the following items:
Results of Aeroflot Group’s consolidated budget for the full year 2017. Total passenger traffic for the Russian air travel market in 2017, including international carriers flying to and from Russia, rose 20.3% to 123.7 million passengers. Aeroflot Group’s market share decreased by 1.8 percentage points year-on-year to 40.5%. The Group continues to grow its operating performance in a recovering market for air travel, with key measures of growth outstripping those of international peers. Passengers carried across Aeroflot Group in 2017 increased by 15.4% to 50.1 million passengers, as a result of growth on both domestic and international routes. A number of strategic initiatives to increase the accuracy of planning were implemented.
Annual accounting statements, including the Company’s financial results for the 2017 financial year. The Board reviewed the performance specifically of PJSC Aeroflot. Under Russian Accounting Standards (RAS), the Company’s revenue totaled RUB 446.6 billion (+4.4% year-on-year) and net profit was RUB 28.4 billion. Changes to the exchange rate had a significant impact on these results: comparisons to 2016 results must take into account lack of a material exchange rate effect related to the refund of pre-payments for aircraft orders, factors which positively impacted profitability in 2016. The Company continued to maintain strict cost control in 2017, though results for the year came under pressure from rising fuel costs. Strong and stable cash flow allowed the Company to repay loans ahead of schedule and not engage in any new borrowing. The Board certified that the financial statements accurately reflected the Company’s financial position as of 31 December 2017.
Reports of the auditors of the Company’s RAS and IFRS 2017 financial statements. The decision was taken to approve, and recommend that the Annual General Meeting of Shareholders approve, PJSC Aeroflot’s annual accounting statements, including PJSC Aeroflot’s financial results, for the fiscal year 2017.
Change to the composition of PJSC Aeroflot’s Management Board. The decision was taken to change the composition of the Management Board, removing Management Board Member Giorgio Callegari, Deputy CEO for Strategy and Alliances, following his resignation from the Company.
PJSC Aeroflot’s incentive system. The results of KPI’s under the Long-Term Development Programme and management’s delivery on KPIs for the fourth quarter and full year 2017 were reviewed and approved.
Aeroflot Group internal audit policy. A revised version of Aeroflot Group’s internal audit policy was approved. Changes to the policy included clarifications and additions related to the tasks and functions of the internal audit department, as well as the rights and obligations of the director the department (including related to anti-corruption measures).
Tender for the selection of PJSC Aeroflot’s auditor. Aeroflot’s Management Board was tasked with running an open tender for the services of compulsory annual audit of PJSC Aeroflot’s financial statements prepared in accordance with RAS for the period 2018-2020, as well as audit of PJSC Aeroflot (Aeroflot Group) consolidated financial statements prepared in accordance with IFRS for the period 2019-2021.
Transactions to sell two Airbus A321-211 aircraft. As part of the programme to renew and optimise PJSC Aeroflot’s fleet of aircraft, transactions to sell two Airbus A321-211 aircraft with manufacturer serial numbers 4103 and 4500 and CFM International, S.A. engines were approved. The removal of these aircraft form the fleet is in line with Aeroflot Group’s Development Strategy Through 2022, which does not envision flying these aircraft beyond 2018.
Additionally, the Board reviewed a number of related-party transactions guaranteed by PJSC Aeroflot that relate to the formation of Rossiya Airlines fleet of aircraft.
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