Revenue decreased by 10.2% year-on-year to RUB 123,894 million.
MOSCOW – Aeroflot Group publishes its condensed consolidated interim financial statements for three months of 2020, in accordance with International Financial Reporting Standards.
Key financial highlights for 1Q 2020:
- Revenue decreased by 10.2% year-on-year to RUB 123,894 million;
- EBITDA amounted to RUB 13,054 million;
- The net loss totalled RUB 22,484 million;
- The net loss adjusted for non-cash FX-related revaluation of lease liabilities accounted for in P&L amounted to RUB 15,774 million.
Andrey Chikhanchin, PJSC Aeroflot Deputy CEO for Commerce and Finance, said: “Positive trends from 2019, including an increase in yields and a reduction in operating costs, continued into early 2020 and should have led to an improvement in profitability and financial results in the reporting period. However, the unprecedented impact of the coronavirus led to an almost complete shutdown of international flights, as well as a significant decrease in passenger traffic on domestic routes, which offset the positive dynamics of the beginning of the year and significantly worsened the financial result in March.
“The suspension of flights affected all airlines worldwide, without exception, and caused the most acute crisis in the industry for decades. Aviation is recognised as one of the most severely affected industries.
“In response to this situation, Aeroflot Group has developed and begun implementing large-scale optimisation measures. The first step was to reduce the amount of available capacity, which helped to minimise losses when demand fell and passengers began to cancel and reschedule their booking dates in large numbers. In addition, the Company has started to reduce general business, managerial, consulting, and marketing expenses, including suspension of all advertising activities. Management initiated negotiations to restructure the Company's liabilities and maintains a continuous dialogue with contractors about improving conditions and optimising payment schedules.
“Given the almost complete lack of revenue from carrying passengers, non-standard solutions were required. Taking into account the stable dynamics of the cargo market, the Company was able to successfully reconfigure and redeploy a number of wide-body aircraft for cargo transportation, causing an increase in cargo revenue.
“The implementation of these measures allowed us to contain the size of the net loss in the first quarter, which amounted to RUB 22.5 billion. This loss includes RUB 6.7 billion of non-cash revaluation of foreign currency lease liabilities, this quarter partially reflected in the profit and loss statement. Excluding this paper effect, the net loss is comparable to the same period last year.
“The almost complete shutdown of flights in April and May will lead to a significant deterioration in the financial results for the second quarter. However, starting from June, Aeroflot Group will gradually resume its flight programme, in particular, Pobeda airlines has been resuming flights since the beginning of the month. Management is doing everything possible to ensure that the Group is able to overcome this serious crisis for aviation and is positioned for a recovery of the market, which we expect will begin in the very near future."
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