Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — FY2022 Earnings Presentation
47 slides from Japan Airlines's earnings presentation, May 2, 2023
Slide 1: Financial Results Mar/2023 (FY2022)
JAPAN AIRLINES Co., Ltd. Financial Results Mar/2023（FY2022） FY2023 JAL Group Entrance Ceremony （April 3, 2023） May 2, 2023 ©Japan Airlines, ALL rights reserved.
Slide 2: Agenda
SKYTRAX SKYTRAX SKYTRAX 2022 Covid-19 Safety World Airline Star SKYTRAX Rating Rating Best Economy Class Airline Seat 5-Star 5-Star COVID-19 Excellence Award ※ 1. PERFORMANCE OVERVIEW FOR FY2022 APEX Health Safety Powered APEX APEX 2. FORECAST FOR FY2023 FULL-YEAR by SimpliFlying Audit WORLD CLASS F
Slide 3: Performance Overview for FY2022
Performance Overview for FY2022 ✔ Recovering passenger demand pushed up EBIT to 64.5 billion yen and Net Profit to 34.4 billion yen, exceeding the previous forecast of EBIT 50 billion yen ✔ Year end dividend forecast increased by 5 yen to 25 yen per share as Net Profit improved Revenue EBIT (1) / Profi
Slide 4: FY2022 revenue and EBIT commentary
● In the Fiscal year 2022, our revenue was 1 trillion and 375 billion yen, due to the steady recovery of the passenger demand. ● EBIT was 64.5 billion yen, which increased by 14.5 billion yen from the forecast announced in February. Net Profit was 34.4 billion yen, increased by 9.4 billion yen from
Slide 5: FY2022 Performance by Business Domain
FY2022 Performance by Business Domain ✔ Revenue and EBIT steadily improved as passenger demand recovered in line with expectations ✔ LCC’s EBIT turned black on a quarterly basis for the first time. Mileage performed strongly Mileage, Lifestyle FY22 Full Service Carrier Cargo / Mail LCC (1) and Infras
Slide 6: Business domain EBIT commentary
● The full-service carrier business domain posted an EBIT profit of 24.9 billion yen. ● As for the LCC business domain, it resulted in an EBIT loss of 8 billion yen, and the Mileage, Lifestyle and Infrastructure business domain posted EBIT profit of 47.7 billion yen. ©Japan Airlines, ALL rights rese
Slide 7: Agenda
1. PERFORMANCE OVERVIEW FOR FY2022 2. FORECAST FOR FY2023 FULL-YEAR 3. DETAILS OF FINANCIAL RESULTS FOR FY2022 4. REFERENCES ©Japan Airlines, ALL rights reserved. 5
Slide 8: FY2023 Full-Year Performance Forecast
FY2023 Full-Year Performance Forecast ✔ Consolidated full-year forecast: Revenue 1,658 billion yen, EBIT 100 billion yen and Net Profit 55 billion yen due to further recovering passenger demand ✔ Full-year dividend forecast is 40 yen per share Revenue EBIT / Profit (JPY Bn) +282.4 Bn (JPY Bn) +35.4 Bn
Slide 9: FY2023 forecast and dividend commentary
● Based on the current steady recovery of passenger demand and the latest situation of cargo business, our Revenue, EBIT and Net Profit are shown on this page. ● Also, we are forecasting a dividend of 40 yen per share for the full fiscal year ending March 2024. ● We will focus on the continuity and
Slide 10: Details of FY2023 Full-Year Performance Forecast
Details of FY2023 Full-Year Performance Forecast FY22 FY23 EBIT by Business Domain (JPY Bn) FY22 FY23 (JPY Bn) Results Forecast Diff. y/y Results Forecast Revenue 1,375.5 1,658.0 +282.4 +20.5% Full Service Carrier 24.9 45.0 Cargo / Mail Full Service Carrier 1,108.6 1,281.0 +172.3 +15.5% LCC (1) ▼8.0
Slide 11: FY2023 earnings forecast commentary
● Earnings forecast for this year is shown on this page. ● Revenue is expected to be 1 trillion and 658 billion yen. ● Fuel costs are expected to be 387 billion yen, mainly due to the fuel price hike and increased fuel load. Total expenses are expected to be 1 trillion and 571 billion yen. ©Japan Ai
Slide 12: Premises of Performance Forecast for FY2023
Premises of Performance Forecast for FY2023 Int’l & Domestic Passenger Operations (Full Service Carrier) ✔ International Pax’s unit price remains high, and the easing of restrictions on the China routes is expected to further improve its performance ✔ Domestic Pax recovers close to CY19 levels. Aimi
Slide 13: Passenger demand forecast commentary
● International passenger demand for full year basis is expected to be 65% of the pre-pandemic level. ● As for domestic passenger demand, we expect a gradual recovery and forecast 94% of the pre-pandemic level. ©Japan Airlines, ALL rights reserved. 8-S
Slide 14: Premises of Performance Forecast for FY2023: Cargo
Premises of Performance Forecast for FY2023 Cargo (International Cargo) ✔ Cargo volumes exceeding pre-pandemic levels is expected, achieved through utilization of passenger flights, 767 freighters and other companies' freighters ✔ Maintain and improve unit prices by maximizing network revenues throug
Slide 15: International cargo forecast commentary
● This page shows the forecast for the international cargo business. ● In terms of volume, we are projecting an increase of around 115% compared to 2019. ● On the other hand, the unit price is expected to remain at 198%, although the unit price will settle down after the period of extremely high uni
Slide 16: Details of FY2023 Full-Year Performance Forecast
Details of FY2023 Full-Year Performance Forecast Changes in EBIT (Revenues／Expenses) + stands for profit increase（ revenue increase, cost decrease ) ASK y/y： +19.6% ▼ stands for profit decrease ( revenue decrease, cost increase ) +35.4 Bn Mileage, Lifestyle and （JPY Bn） Infrastructure and others(1) +6
Slide 17: EBIT change forecast commentary
● Revenue is expected to increase by 282.4 billion yen, assuming an increase of revenue in each business area. Expenses are expected to increase by 246.9 billion yen due to an increase in the number of flights. The various subsidies that we received generously until last year are expected to be redu
Slide 18: Agenda
1. PERFORMANCE OVERVIEW FOR FY2022 2. FORECAST FOR FY2023 FULL-YEAR 3. DETAILS OF FINANCIAL RESULTS FOR FY2022 4. REFERENCES ©Japan Airlines, ALL rights reserved. 11
Slide 19: Details of financial results for FY2022
Details of financial results for FY2022 Consolidated Financial Results Q4 (Apr. to Mar.) Q4 (Jan. to Mar.) (JPY Bn) Vs. FY19Q4 Vs. FY21Q4 Vs. FY21Q4 FY19Q4 FY21Q4 FY22Q4 Diff. y/y Diff. y/y FY22Q4 Diff. y/y Revenue 1,385.9 682.7 1,375.5 ▼10.3 ▼0.7% +692.8 +101.5% 369.9 +185.7 +100.8% Full Service Carrie
Slide 20: Consolidated results commentary
● From page 11, I will show you the results for the full year ending March 2023. ● Page 12 shows consolidated results. ©Japan Airlines, ALL rights reserved. 12-S
Slide 21: Changes in EBIT (Revenues/Expenses)
Details of financial results for FY2022 Changes in EBIT (Revenues／Expenses) + stands for profit increase（ revenue increase, cost decrease ) RPK y/y ： +191.3% ▼ stands for profit decrease ( revenue decrease, cost increase ) ASK y/y ： +59.8% ＋304.0Bn （JPY Bn） Mileage, Lifestyle and Infrastructure Full Se
Slide 22: EBIT change commentary
● Revenues increased significantly in all business areas by 692 billion. ● As for expenses, fuel costs have increased due to high fuel prices and the weak yen. In addition, costs linked to the scale of operations and the number of passengers increased. ©Japan Airlines, ALL rights reserved. 13-S
Slide 23: Changes in EBIT (Market and other impact)
Details of financial results for FY2022 Changes in EBIT (Market and other impact) （JPY Bn） + stands for profit increase（revenue increase, cost decrease) ▼stands for profit decrease (revenue decrease, cost increase) Impact from Currency Market ▼49.4 Bn ＋304.0 Bn (Excl. Market Impact) Revenue +44.1 Bn Re
Slide 24: Market impact commentary
● The impact of the market was a negative of 77.6 billion yen. ● On the other hand, we have achieved an improvement of 381.7 billion yen other than market factors. ©Japan Airlines, ALL rights reserved. 14-S
Slide 25: Int'l & Domestic Passenger Operations
Details of financial results for FY2022 Int’l & Domestic Passenger Operations (Full Service Carrier) Q4 (Apr. to Mar.) Q4 (Jan. to Mar.) International Passenger FY19Q4 FY21Q4 FY22Q4 Vs. FY19Q4 Vs. FY21Q4 FY22Q4 Vs. FY21Q4 Passenger Revenue (JPY Bn) 486.2 68.7 417.5 ▼14.1% +507.0% 130.4 +501.2% Passen
Slide 26: Passenger operations commentary
● For international passengers, the number of passengers remained at a level of 49% compared to 2019, but as unit price increased by 77%, the revenue recovered to 86%. ● For domestic passengers, the number of passengers recovered to a level of 83% compared to 2019, but as unit price increased by 3%,
Slide 27: Int'l & Domestic Passenger Operations
Details of financial results for FY2022 Int’l & Domestic Passenger Operations (Full Service Carrier) ✔ Int’l, passengers exceeded previous forecast by capturing strong Japan-bound demand ✔ Domestic passenger demand recovered strongly toward the end of the fiscal year Passenger Demand（VS.CY2019）(1) Rev
Slide 28: Passenger recovery commentary
● International passengers showed a steady recovery, and the number of passengers in Q4 alone showed a recovery of 58% compared to before pandemic. ● Domestic passenger numbers were slightly sluggish in January and February, but recovered significantly in March, reaching 85% of the pre-pandemic leve
Slide 29: Cargo
Details of financial results for FY2022 Cargo Q4 (Apr. to Mar.) Q4 (Jan. to Mar.) International Cargo FY19Q4 FY21Q4 FY22Q4 Vs. FY19Q4 Vs. FY21Q4 FY22Q4 Vs. FY21Q4 Cargo Revenue (JPY Bn) 59.7 182.8 188.9 +216.2% +3.3% 32.6 ▼34.1% Available Ton Km (MN ton km) 4,418 3,345 3,855 ▼12.8% +15.2% 1,001 +20.4
Slide 30: Cargo commentary
● As for international, we saw a decline in total air cargo demand, and our volume decreased by 13.4% year-on-year in the fourth quarter alone. ● In addition, the easing of the supply-demand balance, the unit price decreased by 24% in the fourth quarter alone. ● Details of volume and unit price are
Slide 31: Cargo (International Cargo)
Details of financial results for FY2022 Cargo (International Cargo) ✔ Volume was secured above total demand, although slightly lower than the previous forecast ✔ Unit price fell below the previous forecast due to the recovery of supply in the market and rapid slowdown of cargo demand Volume（VS.CY2019
Slide 32: International cargo commentary
● Regarding the volume, despite the environment in which total demand declined, we managed to limit the level of decrease. ● In addition, although the unit price was lower than the previous forecast, it was still able to maintain a high level compared to 2019. ©Japan Airlines, ALL rights reserved. 1
Slide 33: LCC
Details of financial results for FY2022 LCC ZIPAIR SPRING JAPAN (1)(2) Q4 (Apr. to Q4 (Apr. to Mar.) Q4 (Jan. to Mar.) Q4 (Jan. to Mar.) LCC Mar.) Vs. Vs. Vs. FY21Q4 FY22Q4 FY22Q4 FY22Q4 FY22Q4 FY21Q4 FY21Q4 FY21Q4 Passenger Revenue（JPY Bn） 0.７ 22.4 ｰ 8.4 ｰ 8.2 2.7 +344.5% Passengers（’000） 25 488 ｰ 1
Slide 34: LCC commentary
● The number of passengers of ZIPAIR is steadily increasing along with the recovery. ● SPRING JAPAN has allocated resources to domestic routes as it is difficult to increase the number of flights for the Mainland China routes. ©Japan Airlines, ALL rights reserved. 19-S
Slide 35: Expenses
Details of financial results for FY2022 Expenses ✔ Actual fixed costs for FY22 was 492.5 billion yen, suppressed under the annual goal of 500 billion yen. Major Operating Expense Items Q4 (Apr. to Mar.) Q4 (Jan. to Mar.) （JPY Bn） Vs. FY19Q4 Vs. FY21Q4 Vs. FY21Q4 FY19Q4 FY21Q4 FY22Q4 Diff. y/y Diff. y/y
Slide 36: Operating expenses commentary
● Operating expenses for fiscal year 2022 increased by 404.4 billion year-on-year to 1 trillion and 344 billion yen due to the impact of market conditions as well as increased costs linked to the scale of operations. ● The actual fixed cost was 492.5 billion yen, lower than our target of 500 billion
Slide 37: Fuel Costs
Details of financial results for FY2022 Fuel Costs Changes in fuel costs Hedge Ratio (As of End of Mar/2023) （JPY (JPY Bn) Bn） FX +59.6 Market +105.5 323.3 Hedging Volume and others +63.1 ▼50.4101.8 145.4 ＋177.8 Bn (＋122.3%) FY21Q3 FY23 FY24 FY25 FY21Q4 FY22Q4 Fuel Hedging FX Hedging Foreign currency
Slide 38: Fuel costs commentary
● Fuel costs for fiscal year 2022 was 323.3 billion yen, which increased by 177.8 billion yen year-on-year. ● The graph on the top right shows our current hedge progress. ● At the bottom is a conceptual diagram of our fuel and currency hedging policies for your reference. ©Japan Airlines, ALL rights
Slide 39: Balance Sheet and Cash Flow
Details of financial results for FY2022 Balance Sheet and Cash Flow BS ✔ Equity ratio is 39.3% and Net D/E ratio is x0.1 both in terms of credit rating evaluation basis, keeping a healthy level CF ✔ Cash flow from Operating Activities is 292.9 billion yen, Free Cash Flow is 180.1 billion yen of inflow,
Slide 40: Balance sheet and cash flow commentary
● The equity ratio on a credit rating evaluation basis is 39.3% and the net D/E ratio on a credit rating evaluation basis is 0.1 times. ● Our cash position at the end of March 2023 was 639.2 billion yen, a 145 billion yen increase from the end of the previous fiscal year. A safe level of liquidity i
Slide 41: Agenda
1. PERFORMANCE OVERVIEW FOR FY2022 2. FORECAST FOR FY2023 FULL-YEAR 3. DETAILS OF FINANCIAL RESULTS FOR FY2022 4. REFERENCES ©Japan Airlines, ALL rights reserved. 23
Slide 42: Operation Performance by Geographic Segment
[Reference] Operation Performance by Geographic Segment (Full Service Carrier) Passenger Revenue Revenue Passengers Carried Q4 (Apr. to Mar.) Q4 (Jan. to Mar.) Q4 (Apr. to Mar.) Q4 (Jan. to Mar.) (%） ('000) FY22Q4 FY22Q4 FY22Q4 Vs. FY19Q4 Vs. FY21Q4 FY22Q4 Vs. FY21Q4 Component Ratio Vs. FY19Q4 Vs. F
Slide 43: Fleet Information
[Reference] Fleet Information End of FY21 (March 31, 2022) End of FY22 (March 31, 2023) Diff. Total2 Mar/23 Owned Leased Total1 Retired Owned Leased Total - Total2 of Mar/22 AircraftExcluded Airbus A350-900 11 4 (1) 15 15 12 4 16 +1 Boeing 777-300ER 13 0 13 13 13 0 13 0 Boeing 777-300 4 0 4 0 0 0 0 0
Slide 44: FY2023 Earnings Forecast (Air Transportation Segment)
[Reference] FY2023 Earnings Forecast（Air transportation Segment） Vs. CY19(%) Vs. FY22(%) （Actual number shown for L/F） （Actual number shown for L/F） International Passenger CY19 (4) FY22 FY23 Full-year 1st Half 2nd Half Full-year 1st Half 2nd Half (Forecast) (Forecast) (Forecast) (Forecast) (Forecas
Slide 45: FY2023 Earnings Forecast (Balance Sheet and Cash Flow)
[Reference] FY2023 Earnings Forecast (Balance Sheet and Cash Flow) （JPY Bn） End of End of Balance Sheet Diff. FY22(Results) FY23(Forecast) Total Assets 2,520.6 2,544.0 +23.3 Balance of Interest-bearing debts 925.5 883.0 ▼42.5 Shareholders’ Equity(1) 816.2 850.0 +33.7 ※1 Figures in brackets represent
Slide 46: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations Japan Airlines ©Japan Airlines, ALL rights reserved. 28
Slide 47: 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