Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — H1 FY2023 Earnings Presentation
48 slides from Japan Airlines's earnings presentation, Oct 31, 2023
Slide 1: Financial Results 1st Half Mar/2024 (FY2023)
JAPAN AIRLINES Co.,Ltd. Financial Results 1st Half Mar/2024 （FY2023） The JAL Group supports the Japanese National Rugby Team October 31, 2023 @JRFU, 2023 ©Japan Airlines, ALL rights reserved.
Slide 2: Agenda
SKYTRAX SKYTRAX SKYTRAX APEX 2023 Covid-19 Safety World Airline Star Health Safety Powered Rating World's Best Economy Class Rating by SimpliFlying Audit 5-Star Best Economy Class Airline seat 5-Star Diamond 1. PERFORMANCE OVERVIEW FOR FY23Q2 2. FORECAST FOR FY2023 FULL-YEAR APEX 「PRIDE Index 2022」
Slide 3: Performance Overview for FY2023Q2
Performance Overview for FY2023Q2 ✔ Increased revenue/profit vs pre-pandemic levels, achieved by swiftly recovering capacity ahead of others and steadily capturing the recovering passenger demand Revenue EBIT (1) / Profit or Loss (2) +72.0 Bn (3) (JPY Bn) (JPY Bn) (+9.6%) +202.4 Bn (+32.7%) Fuel/FX Ma
Slide 4: Speaker notes: performance overview
● Please take a look at the page 3 of our IR material. ● In the First Half of Fiscal year 2023, our revenue was 820.9 Billion Yen, which is a 202.4 billion yen increase year on year, due to the steady recovery of passenger demand. This is also 72 billion more than the pre-Covid level of FY2019 reven
Slide 5: FY2023Q2 Performance by Business Domain
FY2023Q2 Performance by Business Domain ✔ Revenue and EBIT improved significantly, driven by Full Service Carrier ✔ LCC’s EBIT turned profitable. Mileage, Lifestyle and Infrastructure steadily recorded profit FY23 Mileage, Lifestyle Full Service Carrier Cargo / Mail LCC (1) （JPY Bn） and Infrastructure
Slide 6: Speaker notes: business domain results
● On this page, I will explain the result of each business domain using internal management figures ● The full-service carrier business domain posted an EBIT profit of 47.6 billion yen for the Second Quarter alone. ● As for the LCC business domain, it resulted in an EBIT profit of 3.6 billion yen, a
Slide 7: Agenda
1. PERFORMANCE OVERVIEW FOR FY23Q2 2. FORECAST FOR FY2023 FULL-YEAR 3. RECENT TOPICS 4. DETAILS OF FINANCIAL RESULTS FOR FY23Q2 5. REFERENCES ©Japan Airlines, ALL rights reserved. 5
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Slide 9: FY2023 Full-Year Performance Forecast
FY2023 Full-Year Performance Forecast ✔ Consolidated full-year forecast: Revenue 1,684 billion yen, EBIT 130 billion yen and Net Profit 80 billion yen , to reflect the further recovering passenger demand ✔ Full-year dividend forecast increased from 40 yen to 60 yen per share Revenue EBIT / Profit (JPY
Slide 10: Speaker notes: full-year forecast
● On this page, I will explain the full-year consolidated earnings forecast for this year. ● We have revised upwardly our consolidated financial results forecast for the full year as revenue of 1,684 billion yen, EBIT of 130 billion yen, and net profit of 80 billion yen. ● We have also revised marke
Slide 11: Details of FY2023 Full-Year Performance Forecast
Details of FY2023 Full-Year Performance Forecast FY22 FY23 EBIT by Business Domain (JPY Bn) FY22 FY23 FY23 Initial New Results Forecast Forecast Diff. (JPY Bn) Initial New Results Forecast Forecast Revenue 1,375.5 1,658.0 1,684.0 +26.0 Full Service Carrier Full Service Carrier 1,108.6 1,281.0 1,339.0
Slide 12: Speaker notes: forecast details
● This page shows the details of the revised consolidated financial results forecast for the full year. ● Revenues are expected to exceed the initial forecast by 26 billion yen, reflecting the recent strong passenger demand and the weaker-than-expected cargo business situations. Expenses are expecte
Slide 13: Premises of Performance Forecast for FY2023
Premises of Performance Forecast for FY2023 Int’l & Domestic Passenger Operations (Full Service Carrier) ✔ Int’l pax revenue expected to exceed initial forecast with larger pax number & higher unit price ✔ Domestic pax expected to exceed initial forecast through flexible pricing Passenger Demand（VS.C
Slide 14: Speaker notes: forecast assumptions
● This page shows the assumptions used for the consolidated financial results forecast for the full year. ● We assume that international passenger demand will recover to 71% from the 2019 level in the third quarter and 74% in the fourth quarter. ● Domestic passenger demand is expected to recover to
Slide 15: Agenda
1. PERFORMANCE OVERVIEW FOR FY23Q2 2. FORECAST FOR FY2023 FULL-YEAR 3. RECENT TOPICS 4. DETAILS OF FINANCIAL RESULTS FOR FY23Q2 5. REFERENCES ©Japan Airlines, ALL rights reserved. 9
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Slide 17: Recent Topics (International Passenger Operations)
RECENT TOPICS (International Passenger Operations) International Passenger Competitive Position in the Market Improving Competitiveness FY23 First-Half/Total Seats Left：Market Total New International Aircraft A350-1000 (FSC＋LCC） Scheduled to be in service by the end of the year! To/From Japan(vs CY1
Slide 18: Speaker notes: recent topics
● This page shows our recent topics of our Full-service carrier business domains. ● We have put back capacity while other airlines have not. ● Please refer details described here later. ©Japan Airlines, ALL rights reserved. 10-S
Slide 19: Recent Topics (Cargo/Mail, LCC, Mileage, Lifestyle and Infrastructure)
RECENT TOPICS (Cargo/Mail, LCC, Mileage, Lifestyle and Infrastucture) Cargo/Mail 貨物・郵便 Mileage, Lifestyle and Infrastructure ■Preparation for freighter business underway Mileage Business 767 Freighter A321 Freighter ■ Further improve the convenience of Miles through: ・Partnership with Logistics ・Par
Slide 20: Speaker notes: recent topics
● This page shows our recent topics of our LCC and the Mileage, Lifestyle and Infrastructure business domains. ● Please refer details here later as well. ©Japan Airlines, ALL rights reserved. 11-S
Slide 21: Agenda
1. PERFORMANCE OVERVIEW FOR FY23Q2 2. FORECAST FOR FY2023 FULL-YEAR 3. RECENT TOPICS 4. DETAILS OF FINANCIAL RESULTS FOR FY23Q2 5. REFERENCES ©Japan Airlines, ALL rights reserved. 12
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Slide 23: Details of financial results for FY2023Q2: Consolidated Financial Results
Details of financial results for FY2023Q2 Consolidated Financial Results 1st Half 2nd Quarter (JPY Bn) Vs. FY19Q2 Vs. FY22Q2 Vs. FY22Q2 FY19Q2 FY22Q2 FY23Q2 FY23Q2 Diff. y/y Diff. y/y Diff. y/y Revenue 748.9 618.5 820.9 +72.0 +9.6% +202.4 +32.7% 439.4 +89.8 +25.7% Full Service Carrier 612.2 505.8 665.6
Slide 24: Speaker notes: consolidated results
● The following pages shows you the results for the First Half of this year. ● Page 13 shows our consolidated results. ©Japan Airlines, ALL rights reserved. 13-S
Slide 25: Changes in EBIT (Revenues/Expenses)
Details of financial results for FY2023Q2 Changes in EBIT (Revenues／Expenses) + stands for profit increase（ revenue increase, cost decrease ) RPK y/y ： +53.4% ▼ stands for profit decrease ( revenue decrease, cost increase ) ASK y/y ： +25.8% ＋91.0 Bn （JPY Bn） Domestic Cargo/ Mileage, Passenger Mail Life
Slide 26: Speaker notes: EBIT changes
● This page shows the factors behind the improvement in EBIT through revenue and expense. ● Revenues in the cargo business decreased from the previous year, however, revenues in other business areas increased, resulting in a significant total revenue increase of 202.4 billion yen from the previous y
Slide 27: Changes in EBIT (Market and other impact)
Details of financial results for FY2023Q2 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 ＋91.0 Bn Currency Market ▼7.9 Bn (Excl. Market Impact) Revenue +9.4 Bn Rev
Slide 28: Speaker notes: market impact on EBIT
● This page shows the EBIT improvement by dividing it into market impact and other factors. ● Jet fuel prices were significantly lower than the previous year, resulting in a 15.4 billion yen improvement in EBIT year on year. ● Excluding the impact of market conditions, EBIT improved by 75.5 billion
Slide 29: Int'l & Domestic Passenger Operations (Full Service Carrier)
Details of financial results for FY2023Q2 Int’l & Domestic Passenger Operations (Full Service Carrier) Q2 (Apr. to Sep.) Q2 (Jul. to Sep.) International Passenger FY19Q2 FY22Q2 FY23Q2 Vs. FY19Q2 Vs. FY22Q2 FY23Q2 Vs. FY22Q2 Passenger Revenue (JPY Bn) 272.9 163.2 314.4 +15.2% +92.6% 166.9 +65.6% Passe
Slide 30: Speaker notes: passenger business
● This page shows the performance of the Full-Service carrier passenger business. ● The number of passengers on international routes were 67% compared to 2019, and as a result of a 73% increase in unit price, revenues exceeded the pre-Covid level by approximately 115% of passenger revenues. ● As a r
Slide 31: Cargo
Details of financial results for FY2023Q2 Cargo ✔ International cargo recorded revenue higher than pre-pandemic levels by transportation of high value-added goods through our solid transportation quality ✔ Maximized volume particularly between Asia and North America by utilizing both our own and othe
Slide 32: Speaker notes: cargo business
● This page shows the performance of our Cargo business. ● For international cargo business, while declining the demand, the weight decreased by 9.8% year-on-year. ● Unit Price also decreased by 48.5% year-on-year as the supply-demand balance continued to ease. ● However, both weight and unit price
Slide 33: LCC
Details of financial results for FY2023Q2 LCC ✔ ZIPAIR started service on the San Francisco route in June and the Manila route in July, expanding its destination to 8 cities mainly in North America and Asia ✔ Scheduled to increase its fleet to 8 aircrafts by the end of March 2024 Q2 (Apr. to Sep.) Q2
Slide 34: Speaker notes: LCC business
● This page shows the performance of our LCC business. ● ZIPAIR has continued to grow steadily, capturing the strong international passenger demand and achieving significant growth in both total passenger numbers and revenues. ● Spring Japan continues to face difficulties in increasing flights to Ma
Slide 35: Expenses
Details of financial results for FY2023Q2 Expenses ✔ Actual fixed costs was 248.5 billion yen, achieved through steady cost control Major Operating Expense Items Q2 (Apr. to Sep.) Q2 (Jul. to Sep.) （JPY Bn） Vs. FY19Q2 Vs. FY22Q2 Vs. FY22Q2 FY19Q2 FY22Q2 FY23Q2 FY23Q2 Diff. y/y Diff. y/y Diff. y/y Fuel 12
Slide 36: Speaker notes: expenses
● This page shows the breakdown of the cost. ● Total operating expenses increased by 99.2 billion yen from the previous year to 736.6 billion yen, due to the impact of market conditions such as the depreciation of Yen, as well as an increase in expenses linked to the scale of operations and the numb
Slide 37: Fuel Costs
Details of financial results for FY2023Q2 Fuel Costs Changes in fuel costs Hedge Ratio (As of End of Sep./2023) （JPY (JPY Bn) Bn） Hedging Volume Market and others +27.5 ▼56.2 +33.4 101.8170.0 154.8 FX +10.3 ＋15.1 Bn (＋9.8%) FY21Q3 FY22Q2 FY23Q2 FY23 FY24 FY25 Fuel Hedging FX Hedging Foreign currency
Slide 38: Speaker notes: fuel costs and hedging
● This page explains our fuel cost and hedging. ● The fuel cost for this first half were 170 billion yen, increased by 15.1 billion yen from the previous year. ● The upper right graph shows the current progress of hedging. The lower part of the graph shows a conceptual diagram of our fuel and curren
Slide 39: Balance Sheet and Cash Flow
Details of financial results for FY2023Q2 Balance Sheet and Cash Flow BS ✔ Equity ratio is 39.8% and Net D/E ratio is x0.0 both in terms of credit rating evaluation basis, kept at a healthy level CF ✔ Cash flow from Operating Activities is 213.4 billion yen, Free Cash Flow is 130.9 billion yen of inflo
Slide 40: Speaker notes: balance sheet and cash flow
● Finally, this page explains our balance sheet and cash flow. ● The equity ratio on a credit rating basis is 39.8% and the net D/E ratio on a credit rating basis is 0.0 times. ● Our cash position at the end of September 2023 was 743.5 billion yen, which is 104.3 billion yen increase from the end of
Slide 41: Agenda
1. PERFORMANCE OVERVIEW FOR FY23Q2 2. FORECAST FOR FY2023 FULL-YEAR 3. RECENT TOPICS 4. DETAILS OF FINANCIAL RESULTS FOR FY23Q2 5. REFERENCES ©Japan Airlines, ALL rights reserved. 22
Slide 42: Operation Performance by Geographic Segment (Full Service Carrier)
[Reference] Operation Performance by Geographic Segment (Full Service Carrier) Passenger Revenue Revenue Passengers Carried Q2 (Apr. to Sep.) Q2 (Jul. to Sep.) Q2 (Apr. to Sep.) Q2 (Jul. to Sep.) FY23Q2 FY23Q2 ('000) (%） FY23Q2 Vs. FY19Q2 Vs. FY22Q2 Component Vs. FY19Q2 Vs. FY22Q2 Component FY23Q2 V
Slide 43: Fleet Information
[Reference] Fleet Information End of FY22 (March 31, 2023) End of FY23Q2 (September 30, 2023) Diff. Owned Leased Total Owned Leased Total Airbus A350-900 12 4 16 12 4 16 0 Boeing 777-300ER 13 0 13 13 0 13 0 Large Boeing 777-200ER 3 0 3 1 0 1 ▲2 Large-sized Total 28 4 32 26 4 30 ▲2 Boeing 787-9 19 3 2
Slide 44: FY2023 Forecast: Changes in EBIT (First Half Results, Second Half Forecast)
[Reference] FY2023 Full-Year Performance Forecast Changes in EBIT（First Half Results・Second Half Forecast） ✔ Further recovery expected especially for Int’l Pax and Mileage, Lifestyle & Infrastructure ✔ Main factors for increased costs in 2nd half are fuel costs ＆investment in human resources + stand
Slide 45: 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) (Results) (Forecast) (Forecast) (Results)
Slide 46: FY2023 Full-Year Forecast: Balance Sheet and Cash Flow
[Reference] FY2023 Full-Year Performance Forecast Balance Sheet and Cash Flow FY23 FY23 End of FY22 (Initial (New （JPY Bn） Balance Sheet (Results) Forecast) Forecast) Diff. Total Assets 2,520.6 2,544.0 2,642.0 +98.0 Balance of Interest-bearing 925.5 883.0 885.0 +2.0 debts Shareholders’ Equity(1) 816.
Slide 47: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations Japan Airlines ©Japan Airlines, ALL rights reserved. 28
Slide 48: 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