Air New Zealand Limited · NZX:AIR
Air New Zealand — H1 2008 Earnings Presentation
16 slides from Air New Zealand's earnings presentation, Feb 29, 2008
Slide 1: Air New Zealand Interim Results 2008
For personal use only AIR NEW ZEALAND INTERIM RESULTS 2008
Slide 2: Financial Overview
FINANCIAL OVERVIEW For personal use only DOLLAR PERCENTAGE DEC 2007 DEC 2006 MOVEMENT movement OPERATING REVENUE $2,332m $2,127m $205m 9.6% NORMALISED EARNINGS* $159m $98m $61m 62% NPAT $115m $73m $42m 58% ADJUSTED OPERATING CASH FLOW** $320m $227m $93m 41% NET CASH $1,222m $1,045m $177m 17% GEARING
Slide 3: Key Influences on Profitability
KEY INFLUENCES ON PROFITABILITY 2007 For personal use only $m 450 400 350 38 (47) 71 (81) 300 250 186 200 (28) (55) 150 (14) (9) 159 13 172 100 98 50 0 Interim Traffic Yield Freight, Labour Fuel Maintenance Aircraft FX Other Interim Hedge Interim normalised contract operations, normalised timing rep
Slide 4: Group Operating Statistics
GROUP OPERATING STATISTICS 2007 For personal use only DEC 2007 DEC 2006 JUN 2007 movement* PASSENGERS CARRIED (‘000) 6,592 6,193 12,480 6.4% AVAILABLE SEAT KILOMETRES (ASKs) 18,464m 17,689m 35,113m 4.4% LOAD FACTOR 79.4% 74.1% 76.5% 5.3pts YIELD (cents per RPK) 13.0 13.0 12.9 (0.4%) * Calculations b
Slide 5: Broad Based Revenue Growth
BROAD BASED REVENUE GROWTH 2007 For personal use only DEC 07 TOTAL FLIGHT REVENUE* N.AMERICA/EUROPE $585m 3% ASIA/EUROPE $402m 44% AUS & PI $550m 5% DOMESTIC $576m 5% $m 100 200 300 400 500 600 Dec 06 revenue Dec 07 increase * Flight revenue includes passenger revenue, cargo and mail. 05: 08 INTERIM
Slide 6: Short-Haul Operating Statistics
SHORT-HAUL OPERATING STATISTICS 2007 For personal use only DEC 2007 DEC 2006 JUN 2007 movement* PASSENGERS CARRIED (‘000) 5,618 5,360 10,731 4.8% AVAILABLE SEAT KILOMETRES (ASKs) 7,457m 7,598m 14,588m (1.8%) LOAD FACTOR 77.4% 72.8% 75.3% 4.6pts YIELD (cents per RPK) 18.7 18.4 18.4 1.6% * Calculation
Slide 7: Short-Haul Airline Performance
SHORT-HAUL AIRLINE PERFORMANCE 2007 For personal use only Tasman/Pacific Islands • Sustained demand, less capacity = acceptable performance Domestic/Regionals • 4.5% revenue growth on 6.2% growth in capacity • Load factors and yields down • Network and product remain very competitive • Innovation pr
Slide 8: Long-Haul Operating Statistics
LONG-HAUL OPERATING STATISTICS 2007 For personal use only DEC 2007 DEC 2006 JUN 2007 movement* PASSENGERS CARRIED (‘000) 973 833 1,749 16.8% AVAILABLE SEAT KILOMETRES (ASKs) 11,007m 10,091m 20,525m 9.1% LOAD FACTOR 80.8% 75.1% 77.4% 5.7pts YIELD (cents per RPK) 9.3 9.1 9.2 1.8% * Calculations based
Slide 9: Long-Haul Airline Performance
LONG-HAUL AIRLINE PERFORMANCE 2007 For personal use only •“Best in class” business product driving loads and yields • New routes performing well - Vancouver exceeding expectations - Shanghai meeting expectations • US markets performing well despite softening economy • Japanese market remains challen
Slide 10: Operating Environment
OPERATING ENVIRONMENT For personal use only Operating environment less predictable than this time last year: • Fuel prices remain high • Increased competition in the domestic market • Tight labour market • High airport charges 10: 08 INTERIM RESULTS
Slide 11: Strategic Priorities
STRATEGIC PRIORITIES For personal use only • Domestic market – competitive positioning • International focus on customer service and international sales strategy • Developing and executing innovative competitive advantages • Growing other non-airline revenue sources 11: 08 INTERIM RESULTS
Slide 12: Our Current Position
OUR CURRENT POSITION For personal use only • Strong financial position • Flexible fleet plan • Competitive product • Competitive cost base and work practices • Environmental initiatives gathering momentum 12: 08 INTERIM RESULTS
Slide 13: Hedging Position: Currency
HEDGING POSITION 2007 For personal use only CURRENCY • US dollar operating cash flow exposure for second half of 2008 is approx. 90% hedged at an average NZD/USD rate of 0.69 • 2009 US dollar operating cash flow exposure is approx. 65% hedged at an average NZD/USD rate of 0.74 • USD 629m of future c
Slide 14: Hedging Position: Fuel
HEDGING POSITION 2007 For personal use only FUEL • The second half of 2008 is approx. 82% hedged with the average ceiling at USD 80 per bbl WTI • The first half of 2009 is approx. 40% hedged with the average ceiling at USD 89 per bbl WTI 14: 08 INTERIM RESULTS
Slide 15: Capex Projection
CAPEX PROJECTION 2007 For personal use only $600m * $500m $400m $300m $200m $100m $0m 2008 2009 2010 1. Includes progress payments on aircraft 2. Assumed NZD/USD = 0.75 * Subjected to confirmation from Boeing regarding the timing of B789 deliveries 15: 08 INTERIM RESULTS
Slide 16: Highlights
HIGHLIGHTS 2007 For personal use only ATW magazine “best passenger service” OPERATING Revenue NORMALISED EARNINGS* NPAT 9.6% 62% 58% Note: Six months to 31st December year-on-year comparison. * Normalised earnings before taxation & unusual items after excluding net gains/losses on non-hedge accounte