First quarter 2008: improved cost base, higher revenue
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air transport
Reorganisation shows continuing positive effects - Operating margins in Q1 2008 have improved vs. Q1 2007 despite considerable start-up costs due to the reallocation of aircraft capacity to Vienna and continued high fuel prices.
Vienna/Bratislava, 29 January, 2008. SkyEurope Holding AG, listed on the Vienna Stock Exchange´s Prime Market segment, has published its financial results for the 1st quarter of the 2008 financial year (1 October - 31 December 2007).
New management, positive effects The extensive reorganisation program implemented by SkyEurope´s new management is focusing on continuous cost reductions with a firm commitment to the bottom line. When comparing Q1 2008 to Q1 2007 SkyEurope has improved on virtually all cost categories.
Q1 2008 reflects SkyEurope´s first two months of operations with the new base structure after the reallocation of aircraft capacity from Krakow and Budapest to Vienna, Prague and Bratislava and initial benefits from this consolidated base network can already been seen. Although the number of bases has been reduced, sales increased considerably by 32.2% to EUR 53.1m. In addition this new optimised base structure allowed SkyEurope to improve the overall aircraft and crew utilisation thereby reducing unit costs significantly (15.9% reduction in cost per seat).
As the winter quarter by tradition is the weakest in earnings of SkyEurope´s financial year, EBITDAR (EUR -6.5m) and EBIT (EUR -14.8m) in absolute numbers were still in the red. However, cost cutting measures and higher efficiency lead to an improvement in the corresponding margins. EBITDAR margin: -12.3% (+1.9 pp); EBIT margin: -28.0% (2.4 pp)
Fuel prices continued their upward trend in Q1, however benefits from the renewed aircraft fleet were realized which is significantly more efficient than the older 737 classics and a weakened US Dollar which also partially mitigated the increase in fuel prices. In addition to this, significantly lower unit maintenance expenses were incurred as a result of our renewed fleet.
Cost per seat decreased significantly by 15.9% from EUR 66.6 in Q1 2007 to EUR 56.0 in Q1 2008 which was driven primarily by higher aircraft and crew utilisation, and reduced flight times. Unit cost reductions were also enhanced by a consolidation of SkyEurope´s base network from 5 bases to 3; and a decrease in maintenance costs per seat. There were also other significant reductions in unit costs attributable to a decrease in headcount, whereby management was able to reduce staff by 13.8% from 843 in Q1 2007 to 727 to improve staff efficiency.
With the winter timetable, SkyEurope now has 6 aircraft based in Vienna, its most expensive base which has significantly affected the Q1 results in terms of profitability. The decision to place an additional capacity in Vienna during the winter period was taken after careful consideration and the start-up losses of the Vienna base operation are expected to be recovered in the future. This has been the case with our more mature Prague base, which is now performing very well despite over 100% growth this quarter.
"We have started by significantly reducing our cost base and are pushing our business forward to profitability," says Nick Manoudakis, Chief Financial Officer and adds, "I see opportunities in all areas. We expect revenue improvements to follow the cost improvements in the summer season."
In thousands of EUR, unaudited
31 Dec 2007 31 Dec 2006 Change %
3 months 3 months
Financial data
Operating revenue 53,058 40,125 32,2%
EBITDAR (6,516) (5,686) 14,6%
EBITDAR margin (12,3%) (14,2%) +1,9 pp
EBIT (14,839) (12,188) 21,8%
EBIT margin (28,0%) (30,4%) +2,4 pp
Net result (11,331) (13,804) (17,9%)
Net margin (21,4%) (34,4%) +13,0 ppEquity (14,772) (2,738) n.m. Cash and cash equivalents 21,922 11,579 89,3%
Operating data Average no. of aircraft 14,0 12,1 15,9% No. aircraft at period end 14 11 27,3% Passengers 857,953 595,332 44,1% Aircraft utilisation (BH per day)10:33 9:15 14,1% ASK (million) 1,098 812 35,2% RPK (million) 797 620 28,5% Seats flown 1,212,811 785,810 54,3% Seat Load factor (Passengers/Seats) 70,7% 75,8% (5,0 pp) Revenue per ASK (EURc) 4,83 4,94 (2,2%) Revenue per seat (EUR) 43,75 51,06 (14,3%) Yield in EURc (Rev./RPK) 6,66 6,47 2,9% Average revenue per PAX (EUR) 61,8 67,4 (8,2%) Cost per ASK (EURc) 6,18 6,44 (4,0%) Cost per ASK ex fuel (EURc) 4,61 4,92 (6,3%) Cost per seat (EUR) 56,0 66,6 (15,9%) Cost per seat ex fuel (EUR) 41,7 50,8 (17,9%) Sectors 8,155 5,516 47,8% Average stage length 908 1,029 (11,7%) Total staff at period end 727 843 (13,8%) Staff per aircraft 52 77 (32,3%)
end of announcement euro adhoc
Further inquiry note:
SkyEurope Holding AG
Nick Manoudakis, CFO
Tel.:+421 915 782 432
mailto:investor.relations@skyeurope.com
Branche: Air Transport
ISIN: AT0000497003
WKN: A0F5WU
Index: WBI
Börsen: Wiener Börse AG / official market