Aeroflot's profitability in net profit fell from 10 percent last year to 3 percent this year.
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Aeroflot Profits in Nosedive
Aeroflot published its financial report for the first half of the year yesterday. The net profit of Russia’s largest airline fell by 55 percent compared to the same period of last year to $72.2 million, by international accounting standards. Its EBITDA fell by 34 percent to $216 million. At the same time, receipts rose 28.3 percent to $2.138 billion. Thus, the company’s profitability on net profit fell from 10 percent last year to 3 percent this year. Results are expected to be even worse in the second half of the year. Total net profit for the year is expected to be no more than $85 million, compared to $314 million last year.
High fuel prices are blamed for Aeroflot’s poor showing this year. At the end of June, kerosene prices had hit an all-time of 36,000 rubles per ton, 70 percent than a year earlier. According to Aeroflot, its fuel outlays rose 63.8 percent in the first half of this year.
Aeroflot carried 6.26 million passengers in the first eight months of 2008, up 14.7 percent. Fifty-one percent of the company belongs to the state, 30 percent to the National Reserve Corp., 7.9 percent to company employees, about 5 percent trades on the RTS and MICEX stock exchanges, and the remainder belongs to institutional investors. Its capitalization yesterday was $2.6 billion. According to deputy general director for finances and planning Mikhail Poluboyarinov, the company’s short-term debt is $84 million, and that sum will fall to $53 million by the end of the year.
Analysts say the company’s financial results are predictable and could have been worse. Few of its competitors are likely to end the year with any profit at all, analysts say. Aeroflot has the most modern fleet in Russia, which was decisive in holding down its expenses.
www.kommersant.com
All the Article in Russian as of Oct. 15, 2008
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