Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q1 FY2014 Earnings Presentation
30 slides from Japan Airlines's earnings presentation, Jul 29, 2014
Slide 1: Financial Results 1st Quarter Mar/2015 (FY2014)
Financial Results 1st Quarter Mar / 2015 (FY2014) 29 July, 2014 Norikazu Saito Director, Senior Managing Executive Officer
Slide 2: Today's Topics
Today’s Topics Q JAPAN AIRLINES OVERVIEW OF FINANCIAL RESULTS FOR “© 15T QUARTER MAR/2015 (FY2014) C2) DETAILS OF FINANCIAL RESULTS FOR 15™ QUARTER MAR/2015 (FY2014) SUPPLEMENTAL REFERENCES
Slide 3: Overview of 1st Quarter FY3/15 Financial Results
Overview of 1st Quarter FY3/15 Financial Results Operating Revenue Operating Profit 40 10% 320 7.5% 6.1% 30 307.0 Operating Profit Margin ＋4.4% 20 5% 300 294.1 22.0 18.6 10 280 0 0% 1st Quarter 1ST Quarter 1st Quarter 1ST Quarter （JPY Bn） （JPY Bn） FY3/14 FY3/15 FY3/14 FY3/15 OIL・FX Markets Due to
Slide 4: Operating revenue for the first quarter was 307 billion yen
Operating revenue for the first quarter was 307 billion yen, up 4.4% over the previous year, primarily due to an increase in international passenger revenue. Operating profit was 18.6 billion yen, a decline of 3.4 billion yen from the year before, due to a persistently tough environment for revenu
Slide 5: Consolidated Financial Results
Consolidated Financial Results Consolidated Financial Results 1st Quarter FY3/15 1st Quarter 1ST Quarter JPY Bn % y/y FY3/14 FY3/15 Revenue 294.1 307.0 +4.4% Air transportation segment 262.9 274.1 +4.3% Operating Expense 272.0 288.4 +6.0% Air transportation segment 244.4 258.9 +5.9% Operating Profit
Slide 6: Commentary on revenue, expenses and operating profit
Operating revenue for the first quarter was 307 billion yen, up 4.4% over the previous year, driven by an increase in revenue per passenger and passenger traffic on international flights. Operating expenses came to 288.4 billion yen, up 6.0% over the previous year, principally due to an increase
Slide 7: Changes of Operating Profit
Changes of Operating Profit 1st Quarter FY3/15 ▲3.4Bn （JPY Bn） Impact From Currency Market ▲2.1Bn (▲15.6%) Revenue ＋1.0Bn ASK y/y： +0.4% Cost ▲3.1Bn Sales of Expenses of Fuel ▲2.1Bn travel travel RPK y/y： +3.9% Expect Fuel ▲1.0Bn Agency ・ Agency ・ Incidential Incidential Business(※) Business(※) Carg
Slide 8: Revenue and expense changes commentary
International passenger revenue increased by 8.2 billion yen over the previous year, while domestic passenger revenue decreased by 3 billion yen. Combined with other revenue, revenue increased by 12.9 billion yen in total. Expenses increased by 16.4 billion yen in total, which includes an increase
Slide 9: International Passenger Operations (Operating Results)
International Passenger Operations (Operating Results) International Passenger 1Q FY3/14 1Q FY3/15 % y/y Passenger Revenue 98.9 107.2 +8.4% The RPK increase outstripped (JPY Bn) the ASK increase. ASK（MN seat km） 11,260 11,728 +4.2% As a result, the load factor RPK（MN passenger km） 8,180 8,596 +5
Slide 10: International passenger operations commentary
First, I will explain the situation of international passenger operations. ASK on international flights increased by 4.2% on the previous year, while RPK increased by 5.1%, meaning load factors, increased by 0.6 points, came to 73.3%. Given buoyant inbound demand and outbound business demand, and
Slide 11: International Passenger Operations (Changes of Revenue)
International Passenger Operations (Changes of Revenue) 1st Quarter FY3/15 +8.2Bn (+8.4%) 107.2 From March 30, 2014, we increased flights from Haneda. 2.9 Increased flights between NRT and New 5.4 York/Jakarta and launched route ・Strong inbound 98.9 demand and outbound between HND and Ho Chi Min
Slide 12: International revenue per passenger and passenger numbers
The revenue per passenger and passenger numbers increased in good shape due to buoyant outbound business demand and inbound demand. Given enhanced functions of the 2 major hubs, Haneda and Narita, resulting from additional flights, we strengthened the foundation for revenue growth. At Haneda, we s
Slide 13: Domestic Passenger Operations (Operating Results)
Domestic Passenger Operations (Operating Results) Domestic Passenger 1Q FY3/14 1Q FY3/15 % y/y Passenger Revenue Though ASK declined by 4.0%, (JPY Bn) 108.8 105.7 ▲2.8% RPK was up 2.2%, and Load ASK（MN seat km） 9,444 9,067 ▲4.0% Factor also improved. RPK（MN passenger km） 5,531 5,654 +2.2% Yield
Slide 14: Domestic passenger operations commentary
Although ASK on domestic flights decreased by 4.0% from the year before, RPK increased by 2.2%. As a result, the load factor improved by 3.8 points to 62.4％. Yield was minus 4.9% on the previous year due to an increase in group passengers, passengers using advance purchase fares such as Sakitoku p
Slide 15: Domestic Passenger Operations (Changes of Revenue)
Domestic Passenger Operations (Changes of Revenue) 1st Quarter FY3/15 ▲3.0Bn (▲2.8%) 108.8 Sales of new Tokubin Discount 21 fares were strong. ▲5.2 105.7 Passengers using Dynamic 2.1 Packages increased. ・Customer mix, Extended the booking time limit of etc. ・Strong sales of Advance purchase fa
Slide 16: Domestic demand and fares commentary
Though revenue per passenger declined due to changes in customer mix, demand for domestic air travel has been favorable. In the first quarter, we had strong sales of Tokubin Discount 21, an advance purchase fare which can be booked up to 21 days prior to the day of departure. We also improved Dyn
Slide 17: Major Operating Expense Items
Major Operating Expense Items Breakdown of Operating Expenses （JPY Bn） 1Q FY3/14 1Q FY3/15 Difference % y/y Fuel 68.3 73.6 +5.3 +7.8% Fuel costs increased by 5.3 billion yen due to FX Landing fees 20.0 19.9 ▲0.0 ▲0.1% and rising jet fuel prices. Maintenance 9.6 11.2 +1.6 +16.7% Sales Commissions
Slide 18: Operating expense commentary
Fuel costs, which account for a large portion of operating expenses, increased by 5.3 billion yen, or plus 7.8% on the previous year, due to rising jet fuel prices and FX. Maintenance costs increased by 1.6 billion yen from the year before, due to an increase in contracted engine maintenance costs
Slide 19: Analysis of Fuel Effect
Analysis of Fuel Effect Hedging Ratio for Fuel Costs Impact from Fuel (As of End of 1Q FY3/15) （JPY Bn） +5.3Bn (+7.8%) 100% 800 Approx. 80% +1.6 +2.1 +1.6 80% 700 ■fuel □FX Fuel loaded/ 60% Market Approx. Fx deferred gains or losses on hedges 40% Approx. 40% etc 600 68.3 73.6 Approx. 25% 15% Approx.
Slide 20: Fuel cost and hedging commentary
Please look at the graph in the upper left corner. Fuel costs were plus 5.3 billion yen on the previous year. This comprises 2.1 billion yen owing to the weaker yen, plus 1.6 billion yen resulting from rising jet fuel prices, and plus 1.6 billion yen due to an increase in the amount of fuel loaded,
Slide 21: Major Balance Sheet Items
Major Balance Sheet Items Consolidated Balance Sheet Summary End of 1st Quarter FY3/15 End of FY2013 End of 1Q FY3/15 （JPY Bn） Difference 2014/3/31 2014/6/30 Total Assets 1,340.1 1,342.3 +2.2 The balance of interest- bearing debt decreased by Cash and Deposits 368.7 348.4 ▲20.2 11. 1 billion yen t
Slide 22: Balance sheet commentary
The balance of interest-bearing debt came to 123.1 billion yen, a decrease of 11. 1 billion yen from the end of the fiscal year, as a result of repayment of lease obligations. The equity ratio declined by 3.3 points from the end of the previous fiscal year to 48.2%, due to a decline in retained ea
Slide 23: Major Cash Flow Items
Major Cash Flow Items (JPY Bn) 1Q FY3/14 1Q FY3/15 Difference Net income before income taxes and minority interests 20.9 17.5 ▲3.4 Depreciation 19.6 21.3 +1.6 Other 17.8 23.0 +5.2 Cash Flow from Operating Activities 58.4 61.9 +3.5 Capital Expenditure (1) ▲25.8 ▲43.0 ▲17.2 Other 1.8 1.6 ▲0.1 Cash Flo
Slide 24: Cash flow commentary
This page shows cash flows for the first quarter. Capital expenditure increased by 17.2 billion yen on the previous year, primarily for aircraft, and is proceeding as initially planned.
Slide 25: Earnings Forecast for Mar/2015 (FY2014, Consolidated)
Earnings Forecast for Mar/2015 (FY2014, Consolidated) Mar/2014 Mar/2015 Mar/2014 Mar/2015 Result Forecast （JPY Bn） Difference Result Forecast ASK* Int’l +3.3% +4.9% Doms +1.8% ▲2.1% Operating Revenue 1,309.3 1,350.0 +40.6 RPK* Int’l +4.0% +2.7% Doms +3.2% ▲0.8% Operating Expense 1,142.5 1,210.0 +67.
Slide 26: Full-year forecast commentary
This page shows our financial forecast for the fiscal year ending March 31, 2015. As mentioned at the beginning of my presentation, we reported an 8 billion yen increase in the first quarter results compared to our forecast. However, our forecast for the full year remains the same as the one in our
Slide 27: Contact: Finance, Japan Airlines
Contact: Finance, Japan Airlines +81-3-5460-3068
Slide 28: Supplemental Reference: Revenue of International Routes
《Supplemental Reference》 Revenue of International Routes by Geographic segment Passenger Revenue (% of the whole int’l revenue) Passengers 1Q/ 1Q/ 1Q/ 1Q/ (%) Difference (‘000) y/y FY2013 FY2014 FY2013 FY2014 Trans Pacific 33.0% 35.0% +2.0pt Trans Pacific 400 449 +12.2% Europe 19.0% 18.0% ▲1.0pt Eur
Slide 29: Supplemental Reference: Number of Aircraft in Service
《Supplemental Reference》 Number of Aircraft in Service JUN/2014 End of Mar/2014 End of Jun/2014 Difference Owned Leased Total Owned Leased Total Boeing 777-200 15 0 15 14 0 14 ▲1 Boeing 777-200ER 11 0 11 11 0 11 -- Boeing 777-300 7 0 7 7 0 7 -- Boeing 777-300ER 13 0 13 13 0 13 -- Large-sized Total 4
Slide 30: 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