Search Share Prices
IAG posts solid results despite dip in fourth quarter profits
British Airways owner International Consolidated Airlines Group presented its group consolidated results for the year ended 31 December on Friday, with fourth quarter operating profit falling to 585m before exceptional items, from 620m in 2016.
The FTSE 100 company, which also owns Iberia, Aer Lingus and Vueling, said passenger unit revenue for the quarter was ahead 0.4%, or 2.4% at constant currency, while non-fuel unit costs before exceptional items were ahead 0.5%, or 3.2% at constant currency.
Fuel unit costs before exceptional items for the quarter rose 1.2%, or 2.2% at constant currency.
For the year as a whole, IAG said operating profit before exceptional items rose 18.9% over 2016 to reach 3.02bn.
Passenger unit revenue for the year was down 1.0%, although it rose 1.5% at constant currency.
Fuel unit costs for the year before exceptional items were down 7.8%, or down 9.1% at constant currency, while non-fuel unit costs for the year before exceptional items fell 1.3%, or rose 2.7% at constant currency.
Cash stood at 6.68bn as at 31 December - a 248m improvement on 2016 year end.
IAG said its adjusted net debt-to-EBITDA ratio decreased 0.3 to 1.5x.
It reported a profit after tax before exceptional items of 2.24bn - a 12.7% increase - with adjusted earnings per share rising 14.0% to 102.8 euro cents.
On the operational front, IAG's available seat kilometres for the year grew 2.6% to 306.19 billion, with its seat factor improving one percentage point to 82.6%.
Passenger revenue per available seat kilometre fell 1% to 6.61 euro cents, while the company's non-fuel costs per available seat kilometre dropped 1.3% to 5.01 cents.
"We're reporting a very good full year performance with an operating profit of 3.02bn before exceptional items, up 18.9 per cent compared to last year," noted chief executive officer Willie Walsh.
"Passenger unit revenue improved 1.5% at constant currency and we benefited from reduced fuel costs for most of 2017 though our fuel bill started to rise in quarter four."
Walsh said all of the group's airline brands performed "extremely well" with their best-ever individual financial results, strong operational performances and commitment to customer service.
He highlighted the turnaround in Vueling, following its challenges in 2016, as being particularly "outstanding".
"In quarter four we reported an operating profit of 585m, down from 620m last year.
"Our strong performance continued with passenger unit revenue up 2.4% at constant currency."
The operating profit was impacted significantly, Walsh said, by changes in the employee bonus provision in the quarter compared to the previous year.
"We're pleased to confirm that the board is proposing a final dividend of 14.5 euro cents per share.
"This brings the full year dividend to 27.0 euro cents per share, subject to shareholder approval at our AGM in June."
With the dividend and share buyback, IAG had returned more than 1bn to shareholders last year.
"Our confidence in IAG's future remains undaunted and today we're announcing our intention to undertake a share buyback of 500m during 2018," Walsh added.
Looking ahead, the airline group's board said that at current fuel prices and exchange rates, it expected its operating profit for 2018 to show an increase year-on-year.
Both passenger unit revenue and non-fuel unit costs were also expected to improve at constant currency.