Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q2 FY2016 Earnings Presentation
29 slides from Japan Airlines's earnings presentation, Oct 31, 2016
Slide 1: Financial Results 2nd Quarter Mar/2017 (FY2016)
JAPAN AIRLINES Co., Ltd. Financial Results 2nd Quarter Mar/2017 （FY2016） October 31, 2016
Slide 2: Today's Topics
Today’s Topics P.1 P.2 P.5 P.6 P.8 P.21 From the first quarter of this fiscal year, figures for Revenue Passengers Carried, ASK, RPK and Load Factor include “Marketing Carriers’ on code- sharing flights operated by JAL”. As a result, second-quarter ASK, RPK and Load Factor of the previous year refle
Slide 3: Overview of 1st Half FY Mar/17 Results
Overview of 1st Half FY MAR/17 Results Operating Revenue Operating Profit （JPY Bn） （JPY Bn） （OP Margin） 700 130 20% 687.9 ▲36.0Bn 119.9 ▲27.5Bn （▲5.2%） （▲23.0%） 110 651.9 17.4% 92.4 650 90 15% 14.2% 70 600 1st Half Mar/2016 1st Half Mar/2017 50 10% 1st Half Mar/2016 1st Half Mar/2017 Fuel/FX Markets
Slide 4: Intentionally Left Blank
@ Neen eee ee JAPAN AIRLINES a INTENTIONALLY LEFT BLANK
Slide 5: Revised Consolidated Financial Forecast for FY Mar/17
Revised Consolidated Financial Forecast for FY Mar/17 Downward Revision in Operating Revenue and Profit Forecast The revision was made based on the results and Fuel/FX forecasts. New Operating Profit (JPY Bn) Previous Forecast Forecast Difference （JPY Bn） Operating （OP Margin） Revenue 1,343.0 1,28
Slide 6: Revised Consolidated Financial Forecast (Changes in Operating Profit)
Revised Consolidated Financial Forecast for FY Mar/17 (Changes in Operating Profit) We revised operating profit down 31 billion yen, as international passenger demand and revenue per passenger and domestic revenue per passenger are seen to fall below our projections. Impact From Currency Market +20.
Slide 7: Progress of measures to improve profitability
Progress of measures to improve profitability Reinforce Divisional Profitability Management System and maximize profits Measures to increase revenue 第2四半期 FY2016Q2 下期 2nd Half FY2016 Increase unscheduled flights Increase flights on Honolulu and Bangkok routes Int’l Passenger Implement measures to bo
Slide 8: Share repurchase
Share repurchase Decision to acquire 30 billion yen of own shares by March 31, 2017 Content of share repurchase （１）Type of shares acquired Common shares of JAL （２）Total number of shares acquired 15 million shares (maximum) （３）Total price of shares acquired 30 billion yen (maximum) （４）Period of acqui
Slide 9: Recent Topics
Recent Topics International・Domestic JAL, British Airways, Finnair and Iberia launch joint Progressively introduced JAL SKY NEXT installed aircraft (seats, inflight Internet) on domestic routes (77 JAL SKY business between Japan and Europe. NEXT aircraft by 2016 fiscal year-end) JAL started co
Slide 10: Business Direction from FY2017
Business Direction from FY2017 Medium and long term Management Targets from FY2017 ～To increase corporate value～ We will appropriately respond to passenger demand growth and continue to grow based on profitability and stability, and thus increase corporate value Profitability Stability Growth Purs
Slide 11: Consolidated Financial Results
Consolidated Financial Results Consolidated Financial Results 1st Half Mar/17 1st H FY 1st H FY 2 nd Quarter （JPY Bn） Diff. y/y ratio Diff. y/y ratio Mar/16 Mar/17 (Jul-Sep)(5) Revenue 687.9 651.9 ▲36.0 ▲5.2% 354.7 ▲21.1 ▲5.6% Air Transportation Segment 620.2 585.6 ▲34.5 ▲5.6% 317.3 ▲20.4 ▲6.0% Oper
Slide 12: Changes in Operating Profit
Changes in Operating Profit 1st Half FY Mar/17 Impact From Currency Market +11.1Bn ▲27.5Bn （JPY Bn） Revenue ▲10.2Bn (▲23.0%) Cost +21.3Bn Fuel +10.7Bn Ex. Fuel +10.6Bn ASK y/y ： ▲0.4% RPK y/y ： ▲0.1% Int’l Maintenance Aircraft Passenger Fuel ▲2.4 ▲0.7 Domestic Personnel ▲22.5 Passenger Other Cost Ca
Slide 13: International Passenger Operations (Operating Results)
International Passenger Operations(Operating Results) International Passenger 1st H FY 1st H FY y/y y/y ratio 2 (Jul-Sep) ndQuarter Passenger Revenue was Mar/16 Mar/17 (4) ratio 213.1 billion yen, declined Passenger Revenue 22.5 billion yen y/y basis. (JPY Bn) 235.6 213.1 ▲9.6％ 113.6 ▲10.0% ASK
Slide 14: International Passenger Operations (Change in Revenue)
International Passenger Operations(Change in Revenue) 1St Half FY Mar/17 Although net revenue per （JPY Bn） ▲22.5Bn passenger increased through (▲9.6%) revenue management and the expansion of JAL SKY SUITE 235.6 operated routes, revenue per passenger declined due to ▲19.4 213.1 zero fuel surcharge
Slide 15: Domestic Passenger Operations (Operating Results)
Domestic Passenger Operations (Operating Results) Domestic Passenger 1st H FY 1st H FY y/y ratio 2 (Jul-Sep) ndQuarter y/y ratio Mar/16 Mar/17 (4) Passenger revenue was Passenger Revenue 253.3 billion yen, down 3.4 (JPY Bn) 256.8 253.3 ▲1.3％ 143.9 ▲2.0% billion yen y/y. ASK (MN seat km) 18,267 17,
Slide 16: Domestic Passenger Operations (Change in Revenue)
Domestic Passenger Operations (Change in Revenue) 1st Half FY Mar/17 Revenue per passenger mainly of （JPY Bn） ▲3.4Bn demand boosting fares decreased, (▲1.3%) due to price competition with other ・Price competition with other airlines（▲） airlines ・Holidays in September（▲） 256.8 Revenue per passeng
Slide 17: Major Operating Expense Items
Major Operating Expense Items Operating Expenses 1st H FY 1st H FY 2nd Quarter Fuel costs dropped due to the (JPY Bn) Diff. y/y ratio Diff. y/y ratio Mar/16 Mar/17 (Jul-Sep)(4) stronger yen and lower fuel prices, but rising personnel Fuel 122.5 99.0 ▲23.4 ▲19.1% 49.7 ▲12.9 ▲20.6％ costs led to oper
Slide 18: Impact of Fuel and FX Markets
Impact of Fuel and FX Markets Hedging Ratio of Fuel Costs Transition of Fuel Cost by Factors (As of End of 1st Half FY Mar/17) (JPY Bn) 100% FUEL FX 140 ▲23.4Bn 80% Market (▲19.1%) 120 Volume Approx. increase/ 60% ▲20.4 FX Approx. 50% Hedging 100 40% ▲10.7 +7.7 40% 122.5 Approx. Approx. 80 99.0 20%
Slide 19: Major Balance Sheet Items
Major Balance Sheet Items Consolidated Balance Sheet Summary as of End of 1st Half FY2016 End of End of 1H (JPY Bn) FY2015 FY2016 Diff. 2016/3/31 2016/9/30 Total Assets 1,578.9 1,581.0 +2.1 The balance of interest- bearing debt decreased Cash and Deposits (1) 420.3 369.4 ▲50.8 by 18.6 billion yen
Slide 20: Major Cash Flow Items
Major Cash Flow Items （JPY Bn） 1st H FY Mar/16 1st H FY Mar/17 Diff. Net income before income taxes and minority interests 123.6 89.2 ▲34.3 Depreciation and Amortization 43.4 46.9 +3.5 Other 10.6 ▲3.7 ▲14.4 Cash Flow from Operating Activities 177.7 132.4 ▲45.2 Capital Expenditure(1) ▲97.3 ▲127.9 ▲30
Slide 21: FY2016 Earnings Forecast (Consolidated)
FY2016 Earnings Forecast（Consolidated） Consolidated Financial Results Operational Preconditions Previous Mar/2016 Mar/2017 Forecast Previous （JPY Bn） Diff. Mar/2017 Forecast Results Forecast Announced on April 28, 2016 Forecast Announced on April 28, 2016 (4) Revenue 1,336.6 1,280.0 1,343.0 ▲63.0 AS
Slide 22: Mar/2017 Earnings Forecast (Consolidated Balance Sheet)
Mar/2017 Earnings Forecast (Consolidated Balance Sheet) To improve financial stability, we aim to maintain the equity ratio at around 60% to improve our credit rating. Balance Sheet Fundamental Capital Policy End of End of Previous Accumulate retained earnings to （JPY Bn） Mar/2016 Mar/2017 Forecast
Slide 23: Mar/2017 Earnings Forecast (Cash Flow)
Mar/2017 Earnings Forecast (Cash Flow) Make relevant capital investments based on strict investment discipline. Secure return on investment and maximize Free Cash Flow Cash Flow Mar/2016 Mar/2017 Previous Forecast （JPY Bn） Announced on Diff. Results Forecast April 28, 2016 Cash Flow from Operating A
Slide 24: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations, Japan Airlines
Slide 25: Revenue of International Routes by Geographic Segment
《Supplemental Reference》 Revenue of International Routes by Geographic Segment Passenger Revenue - From the first quarter of this fiscal year, figures for Revenue Proportion of whole Int’l 1st Half 2nd Quarter Passengers Carried, ASK, RPK and Load Factor include “Marketing (%) y/y y/y FY Mar/16 FY M
Slide 26: Supplemental Reference: Number of Aircraft
《Supplemental Reference》 Number of Aircraft End of Mar/2016 End of September/2016 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 Total 40 0 40 40 0 40 - Boeing
Slide 27: Earnings Forecast Mar/2017: International Passenger Operations
《Supplemental Reference》 Earnings Forecast Mar/2017（ Air transportation Segment ） International Passenger Operations y/y （%） Mar/2016 Mar/2017 Results Forecast Full-year 1H 2H （Forecast） （Result） (Forecast) Passenger Revenue 448.7 413.0 ▲7.9% ▲9.6% ▲6.0% (JPY Bn) ASK 50,563 50,788 +0.4% +0.8% +0.1%
Slide 28: Earnings Forecast Mar/2017: Domestic Passenger Operations
《Supplemental Reference》 Earnings Forecast Mar/2017（ Air transportation Segment ） Domestic Passenger Operations y/y （%） Mar/2016 Mar/2017 Results Forecast Full-year 1H 2H （Forecast） （Result） (Forecast) Passenger Revenue 501.2 496.0 ▲1.0% ▲1.3% ▲0.7% (JPY Bn) ASK 35,869 35,628 ▲0.7% ▲2.1% +0.8% (MN s
Slide 29: Disclaimer
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 cre