The Cyprus Airways Group announces the Indication of Results for the year ended 31 December 2002, which has been approved by the…
The Cyprus Airways Group announces the Indication of Results for the year ended 31 December 2002, which has been approved by the Board of Directors of Cyprus Airways Limited during its Board meeting on the 28 February, 2003. The Indication of Results for the Cyprus Airways Group for the year ended 31 December 2002 is a Net profit after tax of £10,7 million in comparison to £2,4 million in 2001. The Indication of Results has not been fully audited by the External Auditors.
Revenue
The total Group revenue, excluding the revenue of the associated company Cyprus Airways (Duty-Free Shops) Limited, reached £185,4 million in 2002 in comparison to £178,3 million in 2001, registering an increase of £7,1 million or 4,0%.
The increase in revenue is the result mainly of the increase in the number of passengers carried, by 170 thousand or 8,5%. This increase was achieved despite the decrease of tourist traffic to Cyprus and came as a result of the increase in the seat capacity offered to the market, in an effort to fill the void left by other airlines. This effort, which was assisted by the strengthening of the Cyprus Airways fleet with the addition of two new A319 aircraft one in April and one in July 2002, brought positive results since there was an increase in the load factor of Cyprus Airways by 3 percentage points to 73,1% in 2002 in comparison to 70,1% in 2001, in addition to which there was an increase in the Group`s market share to 34,8% in 2002 from 30,1% in 2001.
Profit from Operations before depreciation and net financing Income
The profit from operations before depreciation and net financing income increased to £11,1 million in 2002 in comparison to £8,5 million in 2001, due to the higher increase of the Group`s revenue in comparison to the Group`s operating expenses before depreciation.
Associated company – Cyprus Airways (Duty-Free Shops) Limited
The turnover of the associated company, Cyprus Airways (Duty-Free Shops) Limited, increased to £55,3 million in 2002 from £51,6 million in 2001, that is a rise of £3,7 million or 7,2%. This increase, which was achieved despite the reduction in passenger numbers, was the result of the effective management and the know-how for the specific sector developed by the company.
This important increase in the revenue of the associated company, which is not included in the Group revenue, resulted in a share of profit for the Group, before taxation, of £7,1 million in 2002 in comparison to £6,6 million in 2001.
Profit before taxation
The Group profit before taxation was £4,6 million in 2002, in comparison to £4,1 million in 2001.
Taxation
Following the recent changes in the tax legislation an amount of £8,3 million which formed part of the provision for deferred taxation is no longer required and has been released resulting in a tax credit in the Group`s accounts.
Hellas Jet
As part of its strategy to expand to Greece the Group has proceeded with the incorporation of Hellas Jet, a new airline company based in Athens, which is expected to start operations in the summer of 2003. Cyprus Airways owns 49% of the Share Capital of Hellas Jet, and the remaining Share Capital is owned 25% by AEF European Capital Investments B.V. (100% subsidiary of Alpha Equity Fund S.A.) and the other 26% by Omega Bank S.A.
Prospects for 2003
Fleet
The Cyprus Airways Group will complete the renewal of its fleet in 2003, with the delivery to Cyprus Airways of the second A330 aircraft in April 2003 (the first one was delivered in December 2002) and with the gradual withdrawal and delivery to their buyer of the four A310 aircraft by May 2003. Eurocypria will take delivery of four new Boeing 737-800 aircraft in April 2003. Operating these aircraft will assist in upgrading the Group`s product. With the completion of the renewal of the fleet, the average age of the Group`s fleet will be 6 years.
Potential Crisis in Iraq
The uncertainty which has resulted from the possibility of a war in Iraq, has adversely affected the tourist industry, which had already been negatively affected from the terrorist attack of 11 September 2001 as well as from the general economic recession affecting many European countries. Although the Group has prepared an action plan in case of a war, it is very difficult to make any safe forecast for the prospects of 2003.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
