Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q2 FY2018 Earnings Presentation
39 slides from Japan Airlines's earnings presentation, Oct 31, 2018
Slide 1: Financial Results 2nd Quarter Mar/2019 (FY2018)
JAPAN AIRLINES Co., Ltd. Financial Results 2 nd Quarter Mar/2019（FY2018） October 31, 2018
Slide 2: Today's Topics
Today’s Topics P.1 P.3 P.6 P.15 ※JAL Corporate Website ※The Award for Passenger Service System Project (Note) Regarding figures in tables of this material, amounts are rounded down to the nearest hundred million yen, and the second decimal point in ratios is rounded off to one decimal point.
Slide 3: Overview of Financial Results for 1st Half Mar/19
Overview of Financial Results for 1st Half Mar/19 An increase in operating revenue and a slight decline in operating profit were recorded in the second-quarter of the fiscal year ending March 31, 2019, through capacity expansion and higher unit revenue attributable to the new passenger service sys
Slide 4: Overview of 1st half financial results (commentary)
Now, I will present an overview of the 1st half financial results for the fiscal year ending March 31, 2019. Operating revenue increased by 57.8 billion yen to 750.1 billion yen, or up 8.4% year on year, by capturing demand of both international and domestic passengers through capacity expansion a
Slide 5: Recent Topics
Recent Topics Announced network expansion to meet growing demand Provided swift supports to natural disaster recovery Established a preparatory company for the new Pursue sustainable growth in considerations of the global international low-cost carrier (LCC) business environment New Routes A
Slide 6: Recent topics (commentary)
In this page, I will explain about recent topics. In our air transport business, we will launch new routes such as the new service to Seattle and strengthen partnerships with other airlines such as joint businesses with Hawaiian Airlines and China Eastern Airlines in order to further expand our ro
Slide 7: FY2018 Earnings Forecast
FY2018 Earnings Forecast Operating revenue forecast has been revised up, considering situations up to the second-quarter, temporary negative impacts of natural disasters and expected revenues throughout this fiscal year. Profit forecast will remain unchanged and higher profit over the previous y
Slide 8: Earnings forecast (commentary)
I will explain about earnings forecast for 2018. Although we faced negative impacts such as natural disasters and rising fuel prices, international passenger and cargo traffic demand are showing strong results, while domestic passenger traffic demand is on a recovery trend on affected routes. Ot
Slide 9: FY2018 Earnings Forecast (Change in Operating profit)
FY2018 Earnings Forecast（Change in Operating profit） (JPY Bn） ＋ stands for profit increase (revenue increase, cost reduction) ▲ stands for profit decrease (revenue decrease, cost increase) ±0.0Bn Revenue Cost FX excl. Fuel Increase Increase 167.0 Fuel (excl.Hedging) Impacts of ▲15.0 167.0 Hedging 15
Slide 10: Market impact on full-year results (commentary)
As for the impact of market conditions on our full-year financial results, we expect a profit decline of approximately 13 billion yen due to higher fuel costs and other. However, revenue increase led by capacity expansion and higher unit revenue attained by the new passenger service system are sure
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Slide 12: Consolidated Financial Results
Consolidated Financial Results Consolidated Financial Results 1st Half Mar/19 1st Half 1st Half 2nd Quarter （JPY Bn） Diff. y/y Diff. y/y Mar/18 Mar/19 (Jul-Sep)(5) Operating Revenue 692.3 750.1 +57.8 +8.4% 408.0 +30.5 +8.1％ Air Transportation Segment 627.3 682.8 +55.5 +8.9% 369.8 +28.3 +8.3％ Operati
Slide 13: Changes in Operating Profit (Revenues / Expenses)
Changes in Operating Profit（ Revenues ／ Expenses ） 1st Half Mar/19 ASK y/y ： +4.3% ＋ stands for profit increase (revenue increase, cost reduction) RPK y/y ： +5.6％ ▲ stands for profit decrease (revenue decrease, cost increase) ▲2.2Bn The effect of the change of the （JPY Bn） settlement adjustment meth
Slide 14: Changes in operating profit (commentary)
I will explain about the changes in operating profit. International passenger revenue increased by 39.8 billion yen year on year, due to robust inbound demand, strong outbound demand, and an increase in fuel surcharge revenue. Domestic passenger revenue increased by 3.1 billion yen year on year
Slide 15: Changes in Operating Profit (Market / Others)
Changes in Operating Profit（ Market ／ Others ） 1st Half Mar/19 (JPY Bn） ＋ stands for profit increase (revenue increase, cost reduction) ▲ stands for profit decrease (revenue decrease, cost increase) Impact from Currency Market +2.6 Bn ▲2.2Bn (▲2.3%) (Excl. Market Impact) Revenue +0.4 Bn Cost +2.1 Bn
Slide 16: Market impact and others (commentary)
This page explains changes in operating profit from the viewpoints of market impact and others. Market conditions had a negative effect of 4.8 billion yen year over year, as fuel prices trended upward, causing a time lag between fuel cost increase and fuel surcharge increase. Apart from Market
Slide 17: International Passenger Operations
International Passenger Operations International Passenger Change in Revenue 1st Half 1st Half （JPY Bn） y/y 2ndQuarter y/y +39.8Bn Mar/18 Mar/19 (Jul-Sep)(5) （+17.4％） Passenger Revenue(1) 269.2 +17.4% 144.3 +16.7% 229.3 (JPY Bn) (266.3) (+16.1%) (142.8) (+15.4%) ・Flight cancellation due to typhoons
Slide 18: International passenger operations (commentary)
For international routes, by proactively expanding capacity to meet and capture robust demand, passenger traffic increased by 9.4% year on year. Revenue per passenger increased by 7.3% year on year. Net unit price increased by approximately 2% largely because of the effects of the new passenger
Slide 19: Domestic Passenger Operations
Domestic Passenger Operations Domestic Passenger Change in Revenue 1st Half 1st Half 2ndQuarter （ JPY Bn ） y/y y/y Mar/18 Mar/19 (Jul-Sep)(5) +3.1Bn Passenger Revenue(1) 268.1 +1.2% 150.8 +1.3% (JPY Bn) 265.0 (271.0) (+2.3%) (152.3) (+2.3%) (+1.2%) Passengers 17,170 17,408 +1.4% 9,110 +0.1% (’000) ・
Slide 20: Domestic passenger operations (commentary)
Next, for domestic routes. Passenger traffic remained steady, centered on an increase in the number of individual passengers, and increased by 1.4% year on year. Revenue per passenger, excluding the effect of changing the settlement adjustment method, increased by 0.9% in the cumulative second
Slide 21: The New Passenger Service System
The New Passenger Service System The Effect during FY18 1st Half The new passenger service system 13 billion yen (estimated as maximum) Main functional Major Improvements International flights：9.0 Bn yen enhancements （Six months ended September 30, 2017=100) Domestic flights：4.0 Bn yen Revenue Incre
Slide 22: New passenger service system effects (commentary)
On this page, I will explain the positive effects of our new passenger service system. As already explained, JAL revamped its passenger service system for the first time for the last 50 years, and a year has nearly passed since its release in last November. The system has been running smoothly,
Slide 23: Major Operating Expense Items
Major Operating Expense Items Operating Expenses 1st Half 1st Half 2nd Quarter (JPY Bn) Diff. y/y Diff. y/y Mar/18 Mar/19 (Jul-Sep)(3) Fuel 101.9 125.3 +23.3 +22.9% 64.9 +13.3 +25.8% Landing and navigation fees 41.2 43.2 +1.9 +4.7% 21.9 +0.8 +3.9% Maintenance 35.8 36.7 +0.8 +2.3% 18.1 +0.0 +0.5% Sal
Slide 24: Operating expense items (commentary)
In major operating expenses items, fuel costs increased by 23.3 billion yen to 125.3 billion yen year on year. The increase of 17.7 billion yen in “Other” includes 8 billion yen in costs related to the passenger service system. Other than those costs also increased, but they were generally withi
Slide 25: Impact of Fuel and FX Markets
Impact of Fuel and FX Markets Hedging Ratio for Fuel Costs Transition of Fuel Cost by Factors (as of end of September 2018) (JPY Bn) Volume 150 loaded/ 60% Market FX Hedging Fuel FX Approx. Approx. ▲1.4 ▲7.5 40% 40% +32.3 100 40% Approx. Approx. ＋23.3Bn 125.3 20% 20% 101.9 (＋22.9%) 20% 50 Approx. Ap
Slide 26: Fuel costs (commentary)
Now, I will explain about fuel costs. The top left graph shows the transition of factors in fuel cost. The rise in fuel prices is over 40% year on year, but through fuel hedging, we contained the increase at 23.3 billion yen, or 22.9% year on year. The top right graph shows the ratio of hedged
Slide 27: Major Balance Sheet Items and Cash Flow Items
Major Balance Sheet Items and Cash Flow Items Issued straight bonds as part of debt Balance Sheet End of End of 1st Diff. utilization (JPY Bn) Mar/18 Half Mar/19 September 21, 2018 Total Assets (1) 1,853.9 1,943.1 +89.1 Serial Issued Coupon Term Cash and Deposits (2) No. amount rate 448.8 451.1 +2.
Slide 28: Balance sheet and cash flow (commentary)
In the second-quarter, as part of disciplinary debt utilization policy, JAL issued straight bonds totaling 20 billion yen, with 10 billion yen each of 10-year and 20- year term straight bonds. It is very encouraging for us that we were able to issue 20-year bonds with attractive conditions, as it
Slide 29: Revenue of International Routes by Geographic Segment
《 References 》 Revenue of International Routes by Geographic Segment Passenger Revenue Proportion of whole Int’l 1st Half 2nd Quarter (%) Mar/18 Mar/19 2nd Quarter y/y y/y 1st Half 1st Half America +9.4% +9.0% 28% 26% 25% Europe +19.6% +18.7% 17% 18% 18% Asia/Oceania +16.3% +16.0% 31% 30% 29% China
Slide 30: Number of Aircraft
《 References 》 Number of Aircraft End of Mar/18 End of 1st Half Mar/19 (March 31, 2018) (September 30, 2018) Diff. Owned Leased Total Owned Leased Total Boeing 777-200 12 0 12 12 0 12 - Boeing 777-200ER 11 0 11 11 0 11 - Boeing 777-300 4 0 4 4 0 4 - Boeing 777-300ER 13 0 13 13 0 13 - Large-sized Tot
Slide 31: FY2018 (Mar/19) Revised Forecast
《 References 》 FY2018 (Mar/19) Revised Forecast Balance Sheet 1 Disclosed on April 27, 2018 2 Total Assets amount as of the end of FY2017 has been changed due to the revision of the accounting standards and other End of End of regulations regarding indication of deferred tax assets and FY2017 FY2018
Slide 32: Earnings Forecast Mar/2019 (International Passenger Operations)
《 References 》 Earnings Forecast Mar/2019（ Air transportation Segment ） International Passenger Operations FY2017 FY2018 y/y（%） Full-year 1st Half 2 nd Half Results Forecast （Forecast） （Result） (Forecast) Passenger Revenue(1) 540.0 +16.8% +17.4% +16.2% 462.9 (JPY Bn) (534.0) (+15.5％) (+16.1％) (+14.8
Slide 33: Earnings Forecast Mar/2019 (Domestic Passenger Operations)
《 References 》 Earnings Forecast Mar/2019（ Air transportation Segment ） Domestic Passenger Operations FY2017 FY2018 y/y（%） Full-year 1st Half 2 nd Half Results Forecast （Forecast） （Result） (Forecast) Passenger Revenue(1) 523.0 +0.9% +1.2% +0.6% 518.2 (JPY Bn) (529.0) (+2.1％) (+2.3％) (+1.9％) Passenge
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Slide 35: Financial Strategy and Capital Policy ①
《Reference》 Financial Strategy and Capital Policy① ※Originally disclosed on February 28, 2018 21
Slide 36: Financial Strategy and Capital Policy ②
《Reference》 Financial Strategy and Capital Policy② ※Originally disclosed on February 28, 2018 *1 Free cash flow (3-year aggregate)=Cash flow from operating activities-Cash flow from investing activities *3 Indicates dividend yield of shareholders’ equity *2 3-year aggregate new debts used (new procu
Slide 37: Financial Strategy and Capital Policy ③
《Reference》 Financial Strategy and Capital Policy③ ※Originally disclosed on February 28, 2018 23
Slide 38: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations, Japan Airlines
Slide 39: Disclaimer
Disclaimer This content contains descriptions of the future expectations, outlooks, objectives and plans etc. of Japan Airlines Co., Ltd. (hereafter "the company") and related Group companies (hereafter "the Group"). These are based on information available at the time when these materials were crea