Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q2 FY3/2015 Earnings Presentation
37 slides from Japan Airlines's earnings presentation, Oct 31, 2014
Slide 1: Japan Airlines Financial Results 2nd Quarter FY3/2015
JAPAN AIRLINES Financial Results 2nd Quarter Mar / 2015 (FY2014) October 31, 2014 Yoshiharu Ueki, President Norikazu Saito, Director, Senior Managing Executive Officer
Slide 2: Contents
Contents Q JAPAN AIRLINES ae OVERVIEW OF 187 HALF FY3/15 FINANCIAL “4 RESULTS REVISED CONSOLIDATED FINANCIAL “4 FORECAST FOR FY3/15 g PROGRESS OF MEDIUM TERM MANAGEMENT 4 PLAN DETAILS OF 187 HALF FY3/15 (1H FY14) FINANCIAL RESULTS SUPPLEMENTAL REFERENCES
Slide 3: Overview of 2nd Quarter FY3/15 Financial Results
Overview of 2nd Quarter FY3/15 Financial Results Operating Revenue Operating Profit Operating (JPY Bn) (JPY Bn) Profit Margin 110 700 14.5% 683.7 13.6% 15% 13% 659.3 ＋3.7% 90 95.8 92.8 11% 650 ▲2.9 Bn 9% 70 7% 50 5% 600 1H FY3/14 1H FY3/14 1H FY3/15 1H FY3/15 Operating profit was 92.8 billion. How
Slide 4: Operating revenue increased 3.7%; operating profit declined
During the reporting period, operating revenue increased by 3.7% year-on-year to 683.7 billion yen, primarily due to an increase in international passenger revenue. On the other hand, operating profit declined by 2.9 billion yen from the previous year to 92.8 billion yen, owing to the market condi
Slide 5: Revised Consolidated Financial Forecast for FY3/15
Revised Consolidated Financial Forecast for FY3/15 Revised Operating Profit Forecast Operating Profit Margin Operating Profit Margin Revised our Forecast based on the Result of 1H and (JPY Bn) 10.4% 11.8% change in Fuel market. 175 158.0 Operating Profit: 158.0 JPY Bn, OPM 11.8% 150 140.0 +18Bn
Slide 6: Operating profit forecast revised upward to 158 billion yen
Our operating profit forecast for the current fiscal year has been revised upward by 18 billion yen to 158 billion yen from the initial forecast of 140 billion yen announced on April 30. Operating profit margin is expected to be 11.8％. As for fuel prices on which our management plan is based, we
Slide 7: Progress of Medium Term Management Plan
Progress of Medium Term Management Plan Product and Service Enhancement International The first Japanese carrier to win SKYTRAX’s Best Business Class December 2014～Narita=Frankfurt Airline Seat Award January 2015～Narita=New York (JL004/JL003) Rolled out on London, New York, Paris, Los Angeles,
Slide 8: Expanding JAL SKY SUITE services and route network
We have been progressively expanding JAL SKY SUITE services on our international routes, which have acquired our customer reputations. From coming December, we will be introducing the JAL SKY SUITE cabin interior on our Boeing 787 fleet as well. As for our route network, we will inaugurate the se
Slide 9: Progress of Medium Term Management Plan
Progress of Medium Term Management Plan Product and Service Enhancement For Our Customer Satisfaction Domestic In 2014 JCSI(*) survey, our international flights took 1 st place for Word of Mouth for the first time. Took 1st place for Newly configured aircraft “JAL SKY NEXT” Customer Loyalty for
Slide 10: JAL SKY NEXT launch and customer satisfaction ranking
In domestic passenger operations, we launched “JAL SKY NEXT” in May, 2014. JAL SKY NEXT offers the comfort of up to 5 cm. more legroom in Economy Class, genuine leather covered seats, and an inflight Internet service to access the Internet from personal mobile devices such as smartphones onboard.
Slide 11: Details of Financial Results 2nd Quarter Mar/2015 (FY2014)
第2四半期業績 詳細 Details of Financial Results 2nd Quarter Mar / 2015 (FY2014) Norikazu Saito Director, Senior Managing Executive Officer
Slide 12: Consolidated Financial Results
Consolidated Financial Results Consolidated Financial Results 2nd Quarter FY3/15 2nd Quarter (JPY Bn) 1H FY3/14 1H FY3/15 y/y (Jul-Sep) (1) y/y Revenue: 683.7 Bn JPY, Revenue 659.3 683.7 +3.7% 376.6 +3.1% Air Transportation Segment 589.0 609.3 +3.4% 335.1 +2.8% y/y +3.7% Operating Expense 563.4 59
Slide 13: Revenue up 3.7%, operating expense up 4.9%
During the reporting period, operating revenue increased by 3.7% year-on-year to 683.7 billion yen, primarily due to an increase in international passenger revenue. Operating expense increased by 4.9% year-on-year to 590.9 billion yen, mainly because of an increase in operating revenue, the weaker
Slide 14: Changes of Operating Profit
Changes of Operating Profit 2nd Quarter FY3/15 ▲2.9Bn （JPY Bn） Impact From Currency Market (▲3.1%) ▲4.8Bn Revenue ＋2.7Bn ASK y/y： +0.4% Cost ▲7.5Bn Sales of Expenses of RPK y/y： +2.4% travel travel Fuel ▲5.1Bn Agency, Agency, Ex. Fuel ▲2.3Bn Incidental Incidental Other Business(※) Business(※) Fuel M
Slide 15: International passenger revenue up, domestic down
International passenger revenue increased by 11.7 billion yen year-on-year, while domestic passenger revenue declined by 3.5 billion yen. Revenues including other revenues increased by 24.4 billion yen in total. As for expenses, fuel costs increased by 10.3 billion yen over the year before, as th
Slide 16: International Passenger Operations (Operating Results)
International Passenger Operations (Operating Results) International Passenger 2nd Quarter 1H FY3/14 1H FY3/15 y/y y/y International (Jul-Sep) (1) Passenger Passenger Revenue 222.2 233.9 +5.3% 126.7 +2.8% (JPY Bn) Revenue: 233.9 Bn JPY ASK (MN seat km) 23,089 23,988 +3.9% 12,260 +3.6% y/y +5.3% RP
Slide 17: International ASK up 3.9%, load factor down
ASK of international flights increased by 3.9% year-on-year, while RPK increased by 3.3%. As a result, the load factor declined by 0.4 points to 75.8%. Thanks to the JAL SKY SUITE effect, buoyant demand from business travelers and an improvement in the unit price of inbound passengers from oversea
Slide 18: International Passenger Operations (Change in Revenue)
International Passenger Operations (Change in Revenue) 1st HALF FY3/15 (Bn JPY) Increased frequency on +11.7Bn Narita - New York / Jakarta (+5.3%) routes, started Haneda - 233.9 Ho Chi Minh City service +2.8 Expansion of JAL SKY +8.9 ・Strong inbound SUITE 777 / 767 services 222.2 demand and outb
Slide 19: JAL SKY SUITE expansion and weaker yen lift yield
The expansion of JAL SKY SUITE routes and an increase in the unit price of overseas passengers to Japan owing to the weaker yen contributed to an improvement in the yield. ■Strong corporate demand from Japan and inbound demand from overseas pushed the load factor upward especially on the transpacif
Slide 20: Domestic Passenger Operations (Operating Results)
Domestic Passenger Operations (Operating Results) Domestic Passenger 2nd Quarter As ASK was ▲3.8% 1H FY3/14 1H FY3/15 y/y y/y (Jul-Sep) (1) year-on-year, RPK Passenger Revenue increased by 1.2% (JPY Bn) 251.7 248.1 ▲1.4% 142.4 ▲0.3% and L/F was up +3.2pt year-on-year ASK (MN seat km) 19,229 18,490
Slide 21: Domestic load factor improved, unit price declined
While ASK of domestic flights decreased by 3.8% from the previous year due to downsizing of aircraft, the load factor improved by 3.2 points to 65.6% as RPK increased by 1.2%. On the other hand, as the percentage of passengers using promotional fares increased, the unit price declined by 2.4% from
Slide 22: Domestic Passenger Operations (Change in Revenue)
Domestic Passenger Operations (Change in Revenue) 1st HALF FY3/15 (Bn JPY) ▲3.5Bn (▲1.4%) Change in customer mix 251.7 ・Increase of the percentage of passengers using promotional fares such as “Tokubin 248.1 Discount 21” ▲6.2 +2.7 Implementation of various measures ・Customer ・Increase of passeng
Slide 23: Promotional fares increased in domestic passengers
During the reporting period, the percentage of passengers using promotional fares increased through the expanded demand for “Tokubin Discount 21” fares, with which customers can purchase tickets up to 21 days prior to their departures. We also implemented various measures such as launching JAL SKY
Slide 24: Major Operating Expense Items
Major Operating Expense Items Operating Expenses 2nd Of the total increase in (JPY Bn) 1H FY3/14 1H FY3/15 difference % y/y Quarter difference operating expenses, (Jul-Sep) 7.5 billion yen was Fuel 141.1 151.4 +10.3 +7.3% 77.8 +4.9 attributed to the weaker yen. Landing fees 40.7 40.8 +0.1 +0.3% 20
Slide 25: Fuel costs increased by 10.3 billion yen
Fuel costs increased by 10.3 billion yen, up 7.3% over the previous year, due to the weaker yen and an increase in capacity. The increase in fuel costs comes from an increase of 5.1 billion yen due to the weaker yen, an increase of 1.3 billion yen due to the higher fuel prices, and an increase of
Slide 26: Major Balance Sheet Items
Major Balance Sheet Items Consolidated Balance Sheet Summary as of End of 1st Half FY3/15 End of FY2013 End of 1H FY3/15 The balance of interest- (JPY Bn) difference 2014/3/31 2014/9/30 bearing debt declined by 21.2 billion yen to 112.9 Total Assets 1,340.1 1,400.0 +59.8 billion yen after repaying
Slide 27: Interest-bearing debt decreased by 21.2 billion yen
The balance of interest-bearing debt decreased by 21.2 billion yen from the end of the previous fiscal year to112.9 billion yen, as we repaid lease obligations and long-term loans, etc.. The equity ratio declined by 0.4 points to 51.1%. Although it fell below 50% at the end of the first quarter d
Slide 28: FY3/15 Earnings Forecast (Consolidated)
FY3/15 Earnings Forecast (Consolidated) FY3/14 FY3/15 FY3/15 FY3/15 FY3/15 (JPY Bn) difference New Results New Forecast Prev. Forecast Prev. Forecast Forecast Revenue 1,309.3 1,340.0 1,350.0 ▲10.0 ASK Int’l 103.7 104.9 Operating Doms 98.4 97.9 Expense 1,142.5 1,182.0 1,210.0 ▲28.0 RPK Int’l 103.2 10
Slide 29: Forecasts revised upward from April 30 announcement
We have revised our forecasts for operating profit etc. upward from the previous ones announced on April 30, 2014. Upon forecasting, we have revised the preconditions of fuel prices as USD118 per barrel for Singapore Kerosene and USD105 per barrel for Dubai crude oil, respectively, for the second-
Slide 30: Fly into tomorrow. Contact
Fly into tomorrow. Contact: Finance, Japan Airlines +81-3-5460-3068
Slide 31: Supplemental Reference: FY3/15 Earnings Forecast (Air Transportation)
《Supplemental Reference》 FY3/15 Earnings Forecast（ Air transportation Segment ） International Domestic y/y (%) 1H 2H FY3/15 1H 2H FY3/15 (Except Load (Result) (Forecast) (Forecast) (Result) (Forecast) (Forecast) Factor) ASK +3.9% +3.6% +3.7% ▲3.8% +0.8% ▲1.6% RPK +3.3% +3.0% +3.2% +1.2% +1.0% +1.1%
Slide 32: Supplemental Reference: Major Cash Flow Items
《Supplemental Reference》 Major Cash Flow Items (JPY Bn) 1H FY3/14 1H FY3/15 Difference Net income before income taxes and minority interests 90.8 91.8 +0.9 Depreciation 40.5 42.6 +2.0 Other 6.8 7.2 +0.3 Cash Flow from Operating Activities 138.3 141.7 +3.4 Capital Expenditure (1) ▲56.2 ▲77.2 ▲20.9 Ot
Slide 33: Supplemental Reference: Forecast Balance Sheets / Cash Flow
《Supplemental Reference》 FY3/15 Earnings Forecast (Consolidated Balance Sheets / Cash Flow) Consolidated Balance Sheet (JPY Bn) End of FY3/14 Result FY3/15 New Forecast Previous Forecast difference Total Assets 1,340.1 1,461.0 1,402.0 +59.0 Interest-bearing Debt 134.2 101.0 101.0 +0 Shareholders' Eq
Slide 34: Impact from Fuel and Currency Markets
《Supplemental Reference》 Impact from Fuel and Currency Markets Impact on Fuel Costs Hedging Ratio for Fuel Costs (As of End of 2Q FY3/15) （JPY Bn） Fuel loaded, 90% Approx.85% 160 deferred gains or 80% losses on hedges, etc. Fuel FX Market +3.8 70% Fx 150 +1.3 60% Approx. Approx. 45% +5.1 50% 40% 140
Slide 35: Revenue of International Routes by Geographical Segment
《Supplemental Reference》 Revenue of International Routes by Geographical segment Passenger Revenue (% of the whole int’l revenue) Passengers (%) 1H FY3/14 1H FY3/15 Y/Y 2Q FY3/15 Y/Y (‘000) 1H FY3/14 1H FY3/15 Y/Y 2Q FY3/15 Y/Y Trans Pacific 34.5% 36.5% +2.0pt 38.0% +2.5pt Trans Pacific 870 951 +9.3
Slide 36: Number of Aircraft in Service
《Supplemental Reference》 Number of Aircraft in Service End of Mar/2014 End of Sep/2014 2014/3/31 2014/9/30 Changes 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 To
Slide 37: Disclaimer on forward-looking statements
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