Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q2 FY2015 Earnings Presentation
40 slides from Japan Airlines's earnings presentation, Oct 30, 2015
Slide 1: Financial Results 2nd Quarter MAR/2016 (FY2015)
Financial Results 2nd Quarter MAR/2016 (FY2015) October 30th, 2015
Slide 2: Contents
Contents 8 ui JAPAN AIRLINES OVERVIEW OF 187 HALF MAR/16 RESULTS REVISED CONSOLIDATED FINANCIAL FORECAST FOR MAR/16 PROGRESS OF MEDIUM TERM MANAGEMENT PLAN DETAILS OF 18™T HALF MAR/16 FINANCIAL RESULTS SUPPLEMENTAL REFERENCES
Slide 3: Overview of 1st Half FY MAR/16 Results
Overview of 1st Half FY MAR/16 Results Operating Revenue Operating Profit （JPY Bn） （JPY Bn） 130 20% 700 687.9 119.9 683.7 +27.1Bn +4.1Bn 110 (＋29.2%) 18% (＋0.6%) 92.8 17.4% 90 16% 650 Operating Profit 70 14% Margin 600 13.6% 50 12% 1st Half Mar/2015 1st Half Mar/2016 1st Half Mar/2015 1st Half Mar/2
Slide 4: Operating revenue for the second quarter was 687.9 billion yen
Operating revenue for the second quarter was 687.9 billion yen, up 0.6% year-on –year, mainly due to increased revenues in international and domestic passenger operations. Notwithstanding the effect of the weaker yen, operating profit increased by 27.1 billion yen to 119.9 billion yen due to a sha
Slide 5: Revised Consolidated Financial Forecast for FY Mar/16
Revised Consolidated Financial Forecast for FY Mar/16 Upward Revision in Operating Profit Forecast The revision was made based on the results and Fuel/FX Operating Profit forecasts. New (JPY Bn) Previous Forecast Forecast Difference （JPY Bn） 210 204.0 Operating Profit 172.0 204.0 +32.0 (*) Net Inc
Slide 6: Operating profit forecast revised upward by 32 billion yen
Our operating profit forecast was revised upward by 32 billion yen to 204 billion yen from our initial forecast of 172 billion yen announced on April 30. The operating profit margin is expected to be 15.1％. Our net profit forecast was also revised upward by 28 billion yen to 172 billion yen. Our
Slide 7: Progress of Medium Term Management Plan
Progress of Medium Term Management Plan International Domestic Product and Service Enhancements JAL SKY NEXT has been installed in approximately 60% of selected 【SKYTRAX World Airline Awards】 domestic fleet. “Best Business Class Airline Seats” in 2013 The installment will be completed in all 7
Slide 8: JAL SKY SUITE and SKY NEXT introduction and route network
On international routes, we are continually introducing JAL SKY SUITE and have received positive feedback from many customers. Our SKYSUITE Economy Class was named Best Economy Class Airline Seat by SKYTRAX in 2015. On domestic routes, we are introducing JAL SKY NEXT, which has also been highly ev
Slide 9: Details of 1st Half FY MAR/16 Financial Results
DETAILS OF 1§' HALF FY MAR/16 FINANCIAL RESULTS
Slide 10: Consolidated Financial Results
Consolidated Financial Results Consolidated Financial Results 1st Half Mar/16 1st H FY 1st H FY 2nd Quarter （JPY Bn） y/y ratio y/y ratio Operating revenue was Mar/15 Mar/16 (Jul-Sep)(5) 687.9 billion yen, up 0.6% Revenue 683.7 687.9 +0.6% 375.8 ▲0.2% Air Transportation Segment 609.3 620.2 +1.8% 33
Slide 11: Operating revenue for the first half increased by 0.6%
Operating revenue for the first half increased by 0.6% year-on-year to 687.9 billion yen, mainly due to an increase in international and domestic passenger revenues. Operating expenses decreased by 3.9% from the previous year to 567.9 billion yen. As a result, operating profit for the 1st Half wa
Slide 12: Changes in Operating Profit
Changes in Operating Profit 1st Half FY Mar/16 （JPY Bn） +JPY27.1Bn Impact From Currency (+29.2%) Market ▲JPY15.6Bn ASK y/y： +0.1% Revenue ＋JPY11.0Bn RPK y/y： +3.9% Cost ▲JPY26.6Bn Fuel Maintenance Aircraft Fuel ▲JPY16.8Bn Depreciation Personnel Ex. Fuel ▲JPY9.8Bn Sales of travel Expenses of ▲3.7 Oth
Slide 13: Passenger revenue increased while costs decreased
Looking at revenue, it ended up with the international and the domestic passenger revenue increased by 4.1 billion yen year-on-year due to high demand of both international and domestic passengers. To be more specific, the international passenger revenue increased by 1.7 billion yen due to an incr
Slide 14: International Passenger Operations (Operating Results)
International Passenger Operations(Operating Results) International Passenger 1st H FY 1st H 2ndQuarter Passenger revenue was 235.6 y/y ratio y/y ratio Mar/15 FY Mar/16 (Jul-Sep) (1) billion yen, up 0.7% year-on-year. Passenger Revenue （JPY Bn） 233.9 235.6 +0.7% 126.1 ▲0.4% ASK was up 1.0% and R
Slide 15: International ASK up 1.0% and RPK up 6.2%
On international flights, ASK increased by 1.0% year-on-year and RPK was up 6.2% by capturing robust inbound demand. This resulted in a load factor of 79.7%, up 3.9 points on the previous year. Revenue per passenger declined by 4.1%, but considering that the Fuel Surcharge Revenue decreased by a
Slide 16: International Passenger Operations (Change in Revenue)
International Passenger Operations(Change in Revenue) 1St Half FY Mar/16 Revenue per passenger declined due （JPY Bn） +JPY1.7Bn to a decrease in fuel surcharge. (+0.7%) Expansion of JAL SKY SUITE 235.6 777/767/787 and the weak yen 233.9 contributed to an increase in +9.8 revenue per passenger. ▲8
Slide 17: International revenue per passenger and passenger numbers
Regarding revenue per passenger, the weaker yen and net unit price increase partially set off the decline in revenue per passenger due to a decrease in fuel surcharge revenue. As for passenger numbers, inbound demand continued to rise, primarily on China and Southeast Asia routes. As a result,
Slide 18: Domestic Passenger Operations (Operating Results)
Domestic Passenger Operations(Operating Results) Domestic Passenger 1st H FY 1st H FY 2ndQuarter Passenger revenue was 256.8 y/y ratio y/y ratio Mar/15 Mar/16 (Jul-Sep) (1) billion yen, up 3.5% year-on- Passenger Revenue year. （JPY Bn） 248.1 256.8 +3.5% 146.9 +3.1% ASK ASK was ▲1.2% and RPK （MN
Slide 19: Domestic ASK down 1.2%, RPK up 0.6%
On domestic flights, ASK declined by 1.2% from the previous year, but RPK increased by 0.6%, resulting in a load factor of 66.8%, up 1.2 points on the previous year. Yield and revenue per passenger increased by 2.9% and 2.6% year-on-year respectively through revenue management. As a result, dome
Slide 20: Domestic Passenger Operations (Change in Revenue)
Domestic Passenger Operations(Change in Revenue) 1st Half FY Mar/16 Changes in customer mix through revenue （JPY Bn） management +JPY8.6Bn ・Well-reputed JAL SKY NEXT (+3.5%) ・Increase of individual passengers 256.8 +2.2 Increase of high-yield passengers during high season (consecutive holidays in
Slide 21: Domestic revenue per passenger and passenger numbers
In terms of revenue per passenger, domestic passenger revenue increased by 6.4 billion yen year-on-year due to changes in customer mix and an increase in high-yield passengers in the high season through revenue management. Despite a 1.2% decline in ASK from the previous year, passenger numbers c
Slide 22: Major Operating Expense Items
Major Operating Expense Items Operating Expenses 1st H FY 1st H FY 2nd Increase in some cost items （JPY Bn） Diff. y/y ratio Quarter Diff. Mar/15 Mar/16 (1) (Jul-Sep) due to the weak yen and service enhancements. We will Fuel 151.4 122.5 ▲28.9 ▲19.1% 62.6 ▲15.2 maintain cost reduction Landing and n
Slide 23: Some cost items increased because of weaker yen
Some cost items increased because of the weaker yen and service enhancements, but we will maintain our cost reduction initiatives. Fuel costs decreased by 28.9 billion yen to 122.5 billion yen. Maintenance costs increased, principally due to the weaker yen. Personnel costs increased by 5.4 b
Slide 24: Impact of Fuel and FX Markets
Impact of Fuel and FX Markets Transition of Fuel Cost by Factor Hedging Ratio of Fuel Costs* (JPY Bn) (As of End of 1st Half FY Mar/16) 1st H 160 *Approximately FY2014 100% 90% 140 Fuel FX 1st H FY2015 80% 120 ▲59.2 151.4 +13.5 60% Volume 100 +16.8 increase/ 122.5 40% Hedging, etc. 40% Market FX 80
Slide 25: Factors affecting the decrease in fuel costs
For factors affecting the decrease in fuel costs, please refer to the graph at the upper left of the page. Although fuel costs decreased by 59.2 billion yen year-on-year due to the sharp fall in fuel prices, the weaker yen pushed up fuel costs by 16.8 billion yen, and loading volume and gains and
Slide 26: Major Balance Sheet Items
Major Balance Sheet Items Consolidated Balance Sheet Summary as of End of 1st Half FY2015 End of FY2014 End of 1H FY2015 The balance of interest- (JPY Bn) difference 2015/3/31 2015/9/30 bearing debt decreased by 17.2 billion yen to 83.3 billion yen as Total Assets 1,473.3 1,511.2 +37.8 a result of
Slide 27: Interest-bearing debt came to 83.3 billion yen
The balance of interest-bearing debt came to 83.3 billion yen, down 17.2 billion yen from the previous fiscal year-end, as a result of repaying long-term loans and lease obligations. Future Rental Expenses under Operating Leases decreased by 14.2 billion yen from the previous fiscal year-end to
Slide 28: Major Cash Flow Items
Major Cash Flow Items （JPY Bn） 1st H FY Mar/15 1st H FY Mar/16 Difference Net income before income taxes and 91.8 123.6 +31.7 minority interests Depreciation and Amortization 42.6 43.4 +0.7 Other 7.2 10.6 +3.4 Cash Flow from Operating Activities 141.7 177.7 +35.9 Capital Expenditure(1) ▲77.2 ▲97.3 ▲
Slide 29: Cash flow from operating activities totaled 177.7 billion yen
Cash flow from operating activities totaled 177.7 billion yen, up 35.9 billion yen from the year-earlier-period. In cash flow from investing activities, capital expenditures for facilities increased by 20.1 billion yen year-on-year. This is mainly due to investments in aircraft, and so we are pro
Slide 30: FY2015 Earnings Forecast (Consolidated)
FY2015 Earnings Forecast（Consolidated） Previous 予想 New Previous FY Mar/15 FY Mar/16 Forecast Forecast for Forecast (JPY Bn） 増減額 Result Forecast Announced on FY Mar/16 Announced on April 30, 2015 April 30, 2015 ASK* Int’l +1.5% +3.1% Revenue 1,344.7 1,347.0 1,328.0 +19.0 Doms. ▲1.1% +0.7% Int’l Passe
Slide 31: Profit forecast revised upward from April 30
We revised our profit forecast upward from our initial forecast announced on April 30. Regarding the assumption on which our revised forecast is based, we revised our exchange rate and fuel price forecasts for the second half of the fiscal year to 125 yen per U.S. dollar, 71 U.S. dollars per barre
Slide 32: FY Mar/16 Earnings Forecast (Consolidated BS/Cash Flow)
FY Mar/16 Earnings Forecast (Consolidated BS/Cash Flow) Consolidated Balance Sheet （JPY Bn） FY Mar/15 Result FY Mar/16 New Forecast Previous Forecast Difference Announced on April 30, 2015 Total Assets 1,473.3 1,598.0 1,581.0 +17.0 Balance of Interest-bearing Debt 100.5 86.0 86.0 - (4) (4) Sharehold
Slide 33: Balance sheet and cash flow forecasts
This page shows our balance sheet and cash flow forecasts. The equity ratio is seen to decline by 2.7 points from the previous forecast to 53.8%, as we will change practice for calculating retirement benefit obligations at the end of the fiscal year and post about 50 billion yen on liability for r
Slide 34: Submission of Corporate Governance Report
Submission of Corporate Governance Report Corporate Governance Report We submitted our Corporate Governance Report to TSE on October 30, 2015 We will comply with each principle in the Corporate Governance Codes. In the Principle 5-2, “Establishing and Disclosing Business Strategy and Business Plan
Slide 35: Corporate Governance Report submitted to Tokyo Stock Exchange
On this page, I will explain our Corporate Governance Report, which we have submitted to the Tokyo Stock Exchange. To comply with the Corporate Governance Code effective this June, we have revised our Corporate Governance Report and submitted it to the Tokyo Stock Exchange on October 30. In this
Slide 36: Fly into tomorrow.
Fly into tomorrow. Contact: Finance, Japan Airlines +81-3-5460-3068
Slide 37: Revenue of International Routes by Geographic Segment
《Supplemental Reference》 Revenue of International Routes by Geographic Segment Passenger Revenue (% of the whole int’l revenue) Passengers FY Mar/15 FY Mar/16 FY Mar/16 FY Mar/15 FY Mar/16 FY Mar/16 (%) Difference Difference (‘000 passengers) y/y y/y 1st Half 1st Half 2nd Quarter 1st Half 1st Half 2
Slide 38: Number of Aircraft in Service as of September 2015
《Supplemental Reference》 Number of Aircraft in Service as of September 2015 End of Mar/15 End of 1st Half FY Mar/16 2015/3/31 2015/9/30 Difference Owned Leased Total Owned Leased Total Boeing 777-200 13 0 13 12 0 12 ▲1 Large Size Boeing 777-200ER 11 0 11 11 0 11 - Boeing 777-300 7 0 7 5 0 5 ▲2 Boein
Slide 39: FY2015 Earnings Forecast (Air transportation Segment)
《Supplemental Reference》 FY2015 Earnings Forecast (Air transportation Segment) International Passenger Domestic Passenger y/y% 1H 2H FY Mar/16 1H 2H FY Mar/16 (Except Load Factor) （Result） （Forecast） （Forecast） （Result） （Forecast） （Forecast） ASK +1.0% +2.0% +1.5% ▲1.2% ▲0.9% ▲1.1% RPK +6.2% +7.2% +6
Slide 40: Forward-looking statements disclaimer
This contents 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 created by the