TIDMAERL
RNS Number : 3736U
Aer Lingus Group PLC
29 July 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY (IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
SUCH JURISDICTION
FOR IMMEDIATE RELEASE
Aer Lingus Group plc
ISE: EIL1 LSE: AERL
Aer Lingus delivers second quarter operating profit of EUR34.5
million supported by 7% top-line growth
Dublin and London, 29 July 2015: Aer Lingus Group plc ("Aer
Lingus", the "Group") today announces its results for the three and
six month periods ended 30 June 2015 (the 'H1 2015' results
report")
A webcast presentation and conference call for institutional
shareholders and analysts will be held on 29 July 2015 at 09.00am
(Dublin time). This will be available on a live webcast at
http://corporate.aerlingus.com/
EUR million unless otherwise
stated (1) Q2 2015 Q2 2014 Change(2) H1 2015 H1 2014 Change(2)
--------------------------------- ------- ------- --------- ------- ------- ---------
Operating figures
Passengers - mainline operations
('000s) 2,809 2,782 1.0% 4,627 4,615 0.3%
Average fare revenue per
seat (EUR) 109.00 101.49 7.4% 97.75 89.18 9.6%
Average fare revenue per
passenger (EUR) 139.42 131.27 6.2% 131.04 122.01 7.4%
--------------------------------- ------- ------- --------- ------- ------- ---------
Trading data
Revenue 468.9 437.8 7.1% 749.0 697.2 7.4%
Operating costs (excluding
net exceptional items) (434.4) (399.1) (8.8%) (762.9) (707.1) (7.9%)
Operating profit/loss before
net exceptional items 34.5 38.7 (10.9%) (13.9) (9.9) (40.4%)
Free cash flow (3) Not applicable 274.7 191.8 43.2%
--------------------------------- --------------------------- ------- ------- ---------
30 June 31 Dec 30 June 30 June
Balance sheet 2015 2014 Change(1) 2015 2014 Change(1)
--------------------------------- ------- ------- --------- ------- ------- ---------
Gross cash(4) 1,013.1 935.5 8.3% 1,013.1 1,034.4 (2.1%)
Gross debt (371.5) (390.2) 4.8% (371.5) (448.7) 17.2%
Net cash 641.6 545.3 17.7% 641.6 585.7 9.5%
--------------------------------- ------- ------- --------- ------- ------- ---------
(1) The trading results set out above and within certain tables
in this document are presented in euro rounded to the nearest
thousand;
therefore discrepancies in the tables between totals and the
sum of the amounts listed may occur due to such rounding.
(2) Sign convention: favourable / (adverse). (3) Free cash
flow, a non-IFRS measure, is explained below.
(4) At 30 June 2015 gross cash includes restricted cash of
EUR76.7 million, of which EUR55.6 million relates to the once-off
pension
contribution. As at 27 July 2015 EUR53.4 million remained in
escrow. See note 19 for details.
Q2 2015 highlights
-- Operating profit (before net exceptional items) of EUR34.5
million; estimated adverse currency movement of EUR21 million
-- Strong revenue growth of 7.1% with increases in passenger, retail and cargo revenues
-- Long haul revenue increase of 24.4% with capacity up 9.7% and revenue per seat up 14.4%
-- Successful Washington route launch, frequency additions and new business cabin introduction
-- Short haul load factor improvement delivered by a volume active strategy
-- Solid short haul forward booking profile achieved,
facilitating 5.8% retail growth in Q2 and increased H2 short haul
capacity expansion
-- Network growth, positive forward booking profile and lower
unit fuel costs will support H2 2015 performance
Stephen Kavanagh Aer Lingus' CEO commented:
"I am pleased to report a profitable second quarter with Aer
Lingus well positioned to deliver an improved operating performance
in the key Q3 trading period and for the full year. I would like to
thank my colleagues for their contribution to the delivery of this
performance and for their on-going endeavours.
Passenger, retail and cargo revenues all grew strongly in the
quarter. The continued investment in our transatlantic business was
rewarded with strong growth in unit revenues. The volume active
strategy employed in our short haul business delivered stable unit
revenue performance in an intensely competitive marketplace.
The adverse effects of unfavourable FX movements on performance
which were evident in this quarter will moderate in the second half
of the year as a result of a higher proportion of US$ denominated
revenues. Both short and long haul capacity are set to expand into
the peak season and we are very satisfied with forward yield and
load factor profiles at this time.
Finally, I would like to reiterate the view of the independent
directors of Aer Lingus that the combination with IAG will
strengthen Aer Lingus and will grow our airline and contribute to
growth in the tourism sector and wider Irish economy."
Full year 2015 outlook
Aer Lingus is currently in an offer period as defined by the
Irish Takeover Rules. The Group is therefore not issuing specific
guidance with regard to 2015 operating profit performance while it
remains in this offer period.
Update on Offer from International Consolidated Airline Group
S.A ("IAG")
On 19 June 2015 IAG issued the Offer Document containing the
full terms and conditions of the recommended cash offer (the
"Offer") by AERL Holding Limited ("AERL Holding"), a wholly-owned
subsidiary of IAG, for the entire issued and to be issued ordinary
share capital of Aer Lingus. The Offer values each Aer Lingus share
at EUR2.55, of which EUR0.05 was paid as a dividend on 29 May 2015
("the Offer"). The Offer conditions include, amongst other things,
approval from the European Commission ("EC") under the EU Merger
Regulation, acceptance of the Offer by Ryanair Limited and the
Minister for Finance of Ireland, shareholders approving the
connectivity resolutions and a 90% acceptance condition. Full
details of the Offer conditions are set out in Appendix I of the
Offer Document posted to Aer Lingus shareholders. The following
conditions have been fulfilled to date:
-- On 14 July 2015 the proposed merger received competition
approval from the EC under the EU Merger Regulation, following the
EC's initial Phase I review period. IAG offered the following
remedies to the EC as part of the regulatory process:
o Five daily slot pairs to be made available to other airlines
at London Gatwick for flights between the airport and Dublin or
Belfast.
o Specifically, two of the five daily frequencies must be
operated between Gatwick and Dublin.
o One daily frequency must be operated between Gatwick and
Belfast.
o The other two frequencies can be operated between Gatwick and
either Dublin or Belfast.
o Other airlines can apply for seats on Aer Lingus' short haul
network for their transfer passengers, on normal commercial
terms
-- On 16 July 2015 Aer Lingus held an Extraordinary General
Meeting ("EGM") and successfully passed the resolutions in relation
to the Connectivity commitments and received Rule 16 approval from
the independent shareholders.
-- On this date IAG also confirmed the extension of the Offer
until 1pm (Irish time) on 30 July 2015.
-- On 17 July 2015 IAG confirmed the receipt of the valid
acceptance of its Offer by the Minister for Finance of Ireland. The
Minister for Finance's acceptance was a condition of the Offer. At
this date, IAG also announced that on 16 July 2015, AERL Holding
had received valid acceptances of the Offer for 269,902,009 Aer
Lingus shares, representing 50.53 per cent of the existing issued
share capital of Aer Lingus, which AERL Holding may count towards
the satisfaction of the acceptance condition to the Offer.
The Aer Lingus independent directors unanimously recommend that
Aer Lingus shareholders accept the Offer. The independent directors
consider the financial terms of the Offer to be fair and reasonable
and have concluded that it is in the best interests of Aer Lingus
and Aer Lingus shareholders as a whole. Shareholders are reminded
that the deadline for acceptance of the Offer is 1pm (Irish time)
on 30 July 2015.
Financial summary
Three months ended Six months ended 30
30 June June
EUR million (unless Change(1) 2015 2014 Change(1)
otherwise indicated) 2015 2014
- Passenger fare revenue 391.6 365.1 7.3% 606.3 563.0 7.7%
- Retail revenue 54.7 51.7 5.8% 94.5 90.4 4.5%
-------- -------- ---------- ----------
Total passenger revenue 446.3 416.8 7.1% 700.8 653.4 7.3%
- Cargo revenue 13.5 11.0 22.7% 25.7 21.6 19.0%
- Other revenue 9.1 9.9 (8.1%) 22.4 22.1 1.4%
-------- -------- ---------- ----------
Total revenue 468.9 437.8 7.1% 749.0 697.2 7.4%
Fuel costs (118.0) (103.5) (14.0%) (190.6) (170.3) (11.9%)
Staff costs (80.5) (75.1) (7.2%) (152.8) (143.1) (6.8%)
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