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News Release

Final results

International Consolidated Airlines Group (IAG) today (February 28, 2014) presented Group consolidated results for the year to December 31, 2013.

IAG period highlights on results:

  • Fourth quarter operating profit €113 million (2012: operating loss of €40 million) before exceptional items
  • At constant currency and excluding Vueling and one-offs, fourth quarter passenger unit revenue up 2.7 per cent, and non-fuel unit costs down 2.7 per cent
  • Operating profit for the year to December 31, 2013 of €770 million (2012: operating loss of €23 million) before exceptional items
  • Revenue for the year up 3.1 per cent to €18,675 million and passenger unit revenue for the year up 0.6 per cent (3.7 per cent at constant currency)
  • Fuel costs for the year down 2.5 per cent to €5,951 million (2012: €6,101 million). Fuel unit costs down 5.0 per cent at constant currency
  • Non-fuel costs before exceptional items for year down 0.7 per cent at €11,954 million. Non-fuel unit costs down 5.6 per cent, down 2.7 per cent at constant currency
  • Cash of €3,633 million at December 31, 2013 was up €724 million on 2012 year end (December 2012: €2,909 million).
  • Adjusted gearing down 1 point to 50 per cent 

 

Performance summary:

Year to December 31

Financial data € million

2013(1)

2012
(restated)(2)

Higher /
(lower)

Passenger revenue

16,264 

15,372 

5.8 %

Total revenue

18,675 

18,117 

3.1 %

Operating profit/(loss) before exceptional items

770 

(23)

Exceptional items

(243)

(590)

Operating profit/(loss) after exceptional items

527 

(613)

Profit/(loss) after tax

151 

(658)

Basic earnings/(loss) per share (€ cents)

6.4 

(38.7)

Operating figures

2013

2012 

Higher /
(lower)

Available seat kilometres (ASK million)

230,573 

219,172 

5.2 %

Revenue passenger kilometres (RPK million)

186,304 

176,102 

5.8 %

Seat factor (per cent)

80.8 

80.3 

0.5pts

Passenger yield per RPK (€ cents)

8.73 

8.73 

0.0 %

Passenger unit revenue per ASK (€ cents)

7.05 

7.01 

0.6 %

Non-fuel unit costs per ASK (€ cents)

5.18 

5.49 

(5.6)%

€ million

At December 31,
2013

At December 31,
2012

Higher /
(lower)

Cash and interest-bearing deposits

3,633 

2,909 

24.9 %

Adjusted net debt(3)

5,701 

5,345 

6.7 %

Adjusted gearing(4)

50%

51%

(1pt)

  • Includes Vueling’s result from April 26, 2013.
  • Restated for amendment to IAS 19 ‘Employee benefits’ accounting standard.
  • Adjusted net debt is net debt plus capitalised operating aircraft lease costs.
  • Adjusted gearing is net debt plus capitalised operating aircraft lease costs, divided by net debt plus capitalised operating aircraft lease costs and adjusted equity.

 

Willie Walsh, IAG chief executive, said:

“In 2013, we strengthened the Group by acquiring Vueling, embarking on Iberia’s transformation and enhancing British Airways’ revenue performance. This has led to a strong financial recovery and return to profitability with a turnaround of nearly €800 million. Our operating profit was €770 million before exceptional items, with passenger revenue up 5.8 per cent and non-fuel costs down 0.7 per cent.

“British Airways continued its solid revenue performance this year and we’re seeing cost improvements, resulting in an operating profit of €762 million. This is the first full year that it’s benefited from the additional Heathrow slots and greater network flexibility created by bmi’s integration. Both the A380 and Boeing 787 were introduced into the airline’s fleet successfully. The new aircrafts’ economic and environmental performance has been excellent and customers love them.

“Iberia has made huge progress on cost control as its restructuring takes shape and great credit should be given to all those involved. It has reduced its losses in the year, reporting an operating loss of €166 million. The recent pay and productivity agreements between Iberia and its pilot and cabin crew unions are key to reducing the airline’s costs further and providing the foundation for profitable growth.

“Vueling is a great asset and provides a new cultural dimension to IAG. The airline reported an operating profit of €168 million from April 2013, when we acquired it, and expanded its network across continental Europe. To increase capacity while improving profit margins is a tremendous achievement and underlines Vueling’s value to the Group.

“We have shown strong financial management this year. Despite buying Vueling and increasing our capital expenditure, cash was up €724 million versus last year and adjusted gearing was down 1 point to 50 per cent.

“Quarter 4 saw an improved financial performance from all our airlines and we are reporting an operating profit of €113 million before exceptional items. Passenger revenue was up 4.0 per cent and non-fuel costs were down 4.1 per cent”.

 

Trading outlook:
In 2014 we expect to make steady progress towards our 2015 Group operating profit target of €1.8 billion, with relatively flat unit revenue growth, and margin expansion driven by falling unit costs.

 

Forward-looking statements:
Certain statements included in this report are forward-looking and are subject to assumptions, risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.

Forward-looking statements can typically be identified by the use of forward-looking terminology, such as “expects”, “may”, “will”, “could”, “intends”, “plans”, “predicts”, “envisages” or “anticipates” and include, without limitation, projections relating to results of operations and financial conditions and International Consolidated Airlines Group S.A. (the ‘Group’) plans and objectives for future operations, discussions of the Group’s Business Plan, expected future revenues, financing plans and expected expenditures and divestments. All forward-looking statements in this report are based upon information known to the Group on at the date of this report as well as the Group’s current expectations and beliefs concerning future events affecting the Group which involve a number of known and unknown risks and uncertainties. You are cautioned not to place any undue reliance on the forward-looking statements contained in this report which speak only as at the date of this report. The Group undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by any applicable laws and regulations.

It is not reasonably possible to itemise all of the many factors and specific events that could cause the Group’s forward-looking statements to be incorrect or that could otherwise have a material adverse effect on the future operations or results of an airline operating in the global economy, though details of potential risks and uncertainties affecting the Group are described in the risk management and risk factors section of the report. Further information on the primary risks of the business and the risk management process of the Group is given in the Annual Report and Accounts 2012; these documents are available on http://www.iagshares.com/.

 

 

IAG Investor Relations
2 World Business Centre Heathrow
Newall Road, London Heathrow Airport
HOUNSLOW TW6 2SF

Tel: +44 (0)208 564 2900

Investor.relations@iairgroup.com