6 Oct 2010 16:48

Transaero cuts IFRS losses 57.4% to 1.97 bln rubles in 2009

MOSCOW. Oct 6 (Interfax) - Russian airlines OJSC Transaero Airlines cut its net losses 57.4% last year to 1.973 billion rubles as calculated to International Financial Reporting Standards (IFRS), the company said in a press release.

"The net loss under IFRS of 1.973 billion rubles in 2009 is a result of non-cash items including the revaluation of foreign exchange liabilities and assets, accelerated depreciation, as well as the cost of heavy maintenance of aircraft, investments in fleet development and increase of passenger service quality, which were not capitalized, and were partly attributed to the cost of the current period," the press release says.

Sales revenue was flat at 35.766 billion rubles.

IFRS financial indicators for Transaero in 2009 ('000 rubles):

2009 2008
Profit -1 973 067 -3 106 426
Traffic revenue 35 766 346 35 734 666
Pretax profit -2 384 950 -3 671 393
Operating costs -32 263 210 -34 277 187
Finance costs -3 903 859 -2 156 966
Other gains (and losses), net -1 984 227 -2 971 906
Comprehensive income (loss) for year 6 611 799 -3 106 426

The company saw revenue from Russian domestic flights increase 37.1% to 8.9 billion rubles. Revenue on flights to North America were also up, rising 34.1% to almost 2 billion rubles, while its share of revenue increased to 5.6% from 4.2%.

Traffic revenue by destination ('000 rubles):

2009 2008 Change 2009/2008
Russia 8 914 520 6 500 570 +37.1
Asia 5 971 237 6 588 541 -9.4%
Europe 5 303 878 6 357 159 -16.6
Middle East 5 163 655 6 698 381 -22.9
Africa 4 887 558 4 460 840 +9.6
CIS 3 531 928 3 643 047 -3.1
North America 1 993 570 1 486 128 +34.1
Total 35 766 346 35 734 666 +0.1%

Earnings before interest, taxes, depreciation, amortization and restructuring (EBITDAR) increased 53.7% to 7.745 billion rubles, reflecting effective cost management. "The main contribution to this impressive year-on-year margin improvement in 2009 came from a 25.24% reduction in fuel costs on the back of strong revenue growth, coupled with an 8% reduction in landing fees and en route charges in comparison with 2008," it says.

Payroll expense increased 15.8% to 4.685 billion rubles and aircraft operating lease costs were up 11% to 1.34 billion rubles due to the increasing size of the fleet.

Capital expenditures, which mainly went to fleet development, declined 56.5% to 2.1 billion rubles. The cash flow from operations increased 280% to 5.4 billion rubles, and net cash from operating activities rose to 1.45 billion rubles.

Net debt, including operational lease, increased to 32.039 billion rubles. "Net debt in 2009 grew to 32,039 mln rubles primarily due to growth in finance leases driven by fleet expansion," it says. Net debt/EBITDA declined to 5.0 from 7.4 and net debt (including operational lease)/EBITDAR declined to 5.3 from 7.3.

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