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Icelandair Group Financials

Icelandair Group Financials

  • Net earnings ISK 2.6 billion
  • EBITDA ISK 6.1 billion -- up 22%
  • Revenue growth 23%
  • Total assets ISK 77 billion
  • Equity ratio 34%
  • Net operating cash ISK 6.4 billion
  • All business platforms are performing well

INCOME STATEMENT

Net earnings amounted to ISK 2.6 billion in 2006. A comparison with 2005 is not available. The group posted EB ITDA of ISK 6.1 billion for 2006, as compared to a pro forma figure of ISK 5 billion in 2005.

Income

Operating income for 2006 totalled ISK 56.1 billion, an increase of 23% from 2005. Transport Revenues in 2006 totalled ISK 35
billion, as compared to 29.4 billion in 2005, an increase of 19%. The increase can be attributed to a greater number of passengers, a better passenger mix, more freight transport and favourable exchange rates. Revenues from Charter and AC lease amounted to ISK 10.7 billion, as compared to ISK 8.1 billion in 2005, increasing by 32%. The acquisition of Lat Charter at mid-year 2006 and increased leasing activities by Icelandair Cargo and Bluebird Cargo explain this increase. Other operating revenue totalled ISK 10.5 billion, increasing by 31% from 2005.

Expenses

Operating expenses in 2006 totalled ISK 50.1 billion, increasing by ISK 23% from 2005. Salaries and salary related expenses totalled ISK 17.8 billion in 2006, as compared to ISK 15.5 billion in 2005, which represents an increase of 15%. The reason for this increase is growth in the operation, salary hikes and wage drift. Fuel expenses totalled ISK 9.5 billion in 2006, as compared to ISK 7.3 billion in 2005, which represents an increase of 30%. Increased production, the price of the USD and higher fuel prices explain this increase. Aircraft and Aircrew lease amounted to ISK 5.2 billion, increasing by ISK 2.2 billion from 2005 due to the increased number of aircraft in the Group’s fleet. Aircraft maintenance totalled ISK 3.1 billion, as compared to ISK 1.9 billion in 2005. Maintenance cost fluctuates considerably, and the main reason for this increase is the number of large inspections on engines performed in 2006, which are very costly. In addition, modifications were made to aircraft in the Icelandair fleet, including the installation of winglets and renewal of cabin interiors. Other operating expenses totalled ISK 17.2 billion, as compared to ISK 15.3 billion in 2005, an increase of 12%.

Net finance cost totalled ISK 426 billion. Financial income totalled ISK 1.6 billion, and financial expense totalled ISK 2 billion.
A comparison with last year is not available.

Balance Sheet


Assets

Icelandair Group’s total assets as of 31 December 2006 totalled ISK 77.2 billion. Operating assets totalled ISK 22.9 billion and consist mainly of aircraft, which account for ISK 19 billion. The book value of five Boeing 757 aircraft was adjusted to market value according to IRFS standards. Intangible assets amounted to ISK 27.8 billion. Goodwill created through the acquisition of companies from FL Group to Icelandair Group hf. accounts for ISK 21.1 billion of this figure. Prepaid aircraft acquisitions totalled ISK 9.7 billion, mainly resulting from the purchase of six Boeing 737-800 aircraft which are scheduled for delivery to the company in 2007. The intention is to lease or sell all of these aircraft. The company also has agreements with Boeing regarding the purchase of four Boeing 787 Dreamliner aircraft to be delivered in the year 2010. The resulting borrowing cost, amounting to ISK 508 million, has been capitalised. Cash and cash equivalents totalled ISK 2.8 billion. The reason for this low cash balance at the year-end is payments of long-term debt and investments in new aircraft.

Liabilities

Icelandair Group’s total loans and borrowings as of 31 December 2006 totalled ISK 35 billion. Of this figure, total prepaid aircraft acquisitions account for ISK 8.5 billion. Loans in connection with the purchase of aircraft and real estate amounted to ISK 14.2 billion, and loans connected with the acquisition of companies from FL Group and Icelandair Group amounted to ISK 12 billion. The company is working on restructuring unfavourable loans in the amount of ISK 5 billion. The new loan will have a different composition of currencies, and the restructuring will be finalised at the end of February.


Equity

The Group’s total equity amounted to ISK 26 billion. The equity ratio is 34%. The total number of shareholders as of 31 December 2006 was 1,507. Three shareholders owned over 10% of the share capital: Langflug with 32%, Naust ehf. with 14.8% and Fjárfestingafélagið Máttur ehf. with 11.1%.

 

 



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