Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q3 FY3/2013 Earnings Presentation
45 slides from Japan Airlines's earnings presentation, 2013
Slide 1: Financial Results Third Quarter FY3/2013 (FY2012)
Financial Results Third Quarter FY3/2013 (FY2012)
Slide 2: Table of Contents
Table of Contents Overview of 3Q FY3/13 (3Q FY12) Financial FY3/13 (FY12) Earnings & Operating Forecast Results • Consolidated Results P.18 • Highlights of 3Q FY3/13 Financial Results P.3 • Change of Consolidated Operating Profit Forecast P.19 • Revision of Consolidated Financial Forecast for P.4 •
Slide 3: Overview of 3Q FY3/13 (3Q FY12) Financial Results
Overview of 3Q FY3/13 (3Q FY12) Financial Results
Slide 4: Intentionally Blank Page
nn Cc) JAPAN AIRLINES Intentionally Blank Page
Slide 5: Highlights of 3Q FY3/13 Financial Results
Highlights of 3Q FY3/13 Financial Results Operating profit for 3Q FY3/13 is JPY 158.1Bn (Y/Y -2.2%). Operating margin remains high. Our financial position is strong and the equity ratio reached 44.8% Total Revenue Operating Profit （JPY Bn） （JPY Bn） Margin 909.1 942.0 17.8% 16.8% 1,000 200 20% 80
Slide 6: Commentary on first three quarters results
For the first three quarters of the fiscal year ending March 2013, we recorded operating revenue of 942 billion yen and operating profit of 158.1 billion yen. Although the operating profit margin declined year-on-year by 1%, it is still relatively high at 16.8%. Although revenue increased thanks t
Slide 7: Revision of Consolidated Financial Forecast for FY3/13
Revision of Consolidated Financial Forecast for FY3/13 Upward Revision of Operating Profit Forecast (JPY Bn) Margin 15.1％ Margin +JPY21.0Bn Margin 13.6％ (＋12.7%) 12.3％ +JPY15.0Bn (＋10.0%) 186 165 150 Target in IPO of FY12 Previous Forecast New Forecast (announced 2012/11/2) 4
Slide 8: Upward revision of full-year operating profit forecast
Given the steady trend of operating profit and an increase in cost-efficiency in the first three quarters, we have revised upward our forecast for the full fiscal year. We expect operating profit to rise by 21 billion yen from 165 billion yen, as announced at the end of the second quarter, to 186
Slide 9: Dividend Policy for Fiscal Year Ending March 2013
Dividend Policy for Fiscal Year Ending March 2013 Revision of Dividend Payout Ratio To uphold our basic policy of proactively distributing benefits to shareholders, we have revised the dividend ratio from approx.15% to approx.20%. To achieve the equity ratio target of 50%, we will improve our sh
Slide 10: Shareholder return and dividend payout ratio commentary
Providing shareholders’ return is a key objective for JAL . We will strive to earn revenue steadily and pay dividends to our shareholders. We previously announced that the dividend payout ratio would be approximately 15% of consolidated net profit for the full fiscal year, and explained that it wo
Slide 11: JAL's Suspension of 787 Operations
JAL’s Suspension of 787 Operations We suspended the use of 787 aircraft （total 7 aircraft）from January 16. We are operating flights using alternative aircraft. Recent measures Future measures 【Temporarily suspended】 On current 787 routes Route Period Weekly flights • Continue operations using
Slide 12: Commentary on Boeing 787 suspension
We suspended the use of Boeing 787 aircraft on January 16, and as of January 31, 28 flights have been cancelled. Investigations by the U.S. and Japanese authorities are under way, and we are doing everything possible with the cooperation of Boeing to ensure the safety of 787 aircraft. While the u
Slide 13: Details of 3Q FY3/13 (3Q FY12) Financial Results
Details of 3Q FY3/13 (3Q FY12) Financial Results
Slide 14: Intentionally Blank Page
nn Cc) JAPAN AIRLINES Intentionally Blank Page
Slide 15: Overview of Consolidated Financial Results
Overview of Consolidated Financial Results Revenue of JPY 942.0Bn and operating profit of JPY 158.1Bn Operating profit margin of 16.8% 3Q FY3/13 (JPY Bn) 3Q FY3/12 3Q FY3/13 % Y/Y % Y/Y (OCT-DEC)(1) Revenue 909.1 942.0 +3.6% 307.8 ▲0.5% Air Transportation Segment 816.9 843.0 +3.2% 275.3 ▲0.8% Op
Slide 16: Commentary on consolidated results
Operating revenue for this first three quarter increased year-on-year by 3.6% to 942 billion yen, as a result of an increase in passenger traffic on both domestic and international routes. Operating expenses increased year-on-year by 4.9% to 783.8 billion yen due to costs for new products and serv
Slide 17: Increased / Decreased Elements of Operating Profit
Increased / Decreased Elements of Operating Profit 3Q FY3/2013 ASK Y/Y： +4.3% RPK Y/Y：+10.8% Progress of Cost Improvement （JPY Bn） （JPY Bn） Other Minimized costs by expanding the Revenues Fuel Domestic Int’l Divisional Profitability Management Passenger Cargo +4.6% ▲7.6% Operation System Internation
Slide 18: Commentary on operating profit changes
Revenue increased due to increased passenger traffic, and revenue of subsidiaries also increased. Consequently, revenue increased by 32.8 billion yen. With regard to expenses, an increase in costs were seen in fuel costs due to rising fuel prices and an increase in capacity, costs for new products
Slide 19: International Passenger Operations (Operating Results)
International Passenger Operations (Operating Results) 3Q FY3/13 International Passenger 3Q FY3/12 3Q FY3/13 % Y/Y % Y/Y (OCT-DEC) Passenger Revenue (JPY Bn) 288.9 308.3 +6.7% 98.0 ▲0.1% Passengers (’000) 4,971 5,618 +13.0% 1,840 +4.5% RPK (MM passengers-km) 22,067 25,430 +15.2% 8,578 +11.8% ASK (MM
Slide 20: Commentary on international passenger operations
The number of revenue passengers on international flights for the reporting period increased year-on-year by 13%, and RPK also increased by15.2%, thus showing a steady growth in demand. On the other hand, due to the increase in demand, the customer mix changed as a result of a recovery in leisure
Slide 21: International Passenger Operations (Increased / Decreased Elements of Passenger Revenue)
International Passenger Operations (Increased / Decreased Elements of Passenger Revenue) 3Q FY3/2013 As the number of passengers increased, passenger revenue rose by JPY 19.3Bn Y/Y at 3Q FY3/13 （JPY Bn） +JPY19.3Bn (+6.7%) Strong demand on medium and 308.3 long haul flights ＜L/F＞ This FY （FY3/12）
Slide 22: Commentary on international passenger revenue
International passenger operations continued to enjoy a resurgence in demand from post- quake effects, as in the second quarter. Demand was strong, especially on medium and long haul routes, such as to Europe, North America and Southeast Asia. On the other hand, demand declined dramatically on Chi
Slide 23: Domestic Passenger Operations (Operating Results)
Domestic Passenger Operations (Operating Results) 3Q FY3/13 Domestic Passenger 3Q FY3/12 3Q FY3/13 % Y/Y % Y/Y (OCT-DEC) Passenger Revenue (JPY Bn) 367.2 373.4 +1.7% 123.0 ▲0.7% Passengers (’000) 21,839 22,946 +5.1% 7,719 +0.7% RPK (MM passengers-km) 16,748 17,579 +5.0% 5,889 ▲0.1% ASK (MM seats-km)
Slide 24: Commentary on domestic passenger operations
Domestic passenger traffic also continued to recover from last year. In addition to measures to boost demand, we increased flight frequency and deployed larger aircraft according to changes in demand to improve profitability. Demand on Kyushu and Okinawa routes was strong. As with international
Slide 25: Domestic Passenger Operations (Increased / Decreased Elements of Passenger Revenue)
Domestic Passenger Operations (Increased / Decreased Elements of Passenger Revenue) 3Q FY3/2013 Revenue increased by JPY 6.2Bn due to an increase in passengers （JPY Bn） +JPY6.2Bn Increased flights offering First Class, expanded (+1.7%) service to HND=Okinawa 373.4 routes 367.2 Increased Class
Slide 26: Commentary on domestic passenger revenue
Though post-quake leisure demand dropped last year, it recovered significantly this year, resulting in an increase in the ratio of low-yield passengers and a decline in unit revenue. However, by offering fares to meet diverse customer needs, such as discount fares for the New Year holiday season,
Slide 27: Major Operating Expense Items
Major Operating Expense Items Breakdown of Operating Expense 3Q FY3/13 (JPY Bn) 3Q FY3/12 3Q FY3/13 % Y/Y % Y/Y (OCT-DEC) (1) Fuel 172.4 185.6 +7.6% 61.4 +4.9% Landing fees and other rent 53.4 56.6 +5.9% 18.6 +1.9% Maintenance 18.3 23.6 +29.1% 8.7 +24.9% Sales Commissions 16.9 15.3 ▲9.1% 5.1 ▲12.6%
Slide 28: Commentary on operating expenses
Fuel costs increased by 7.6% due to rising fuel prices and an increase in capacity. Landing fees and other rent increased by 5.9% due to an increase in capacity. Maintenance costs increased by 29.1% due to an increase in regular maintenance orders. Aircraft depreciation costs increased by 9.0% du
Slide 29: Major Balance Sheet Items
Major Balance Sheet Items The balance of interest-bearing debt is JPY 175.1Bn after repayment Shareholders' equity ratio increased by 9.1pt to 44.8%. End of FY3/12 End of 3Q FY3/13 (JPY Bn) Difference 2012/3/31 2012/12/31 Total Assets 1,087.6 1,176.8 +89.2 Cash and Deposits 272.4 317.4 +45.0 Bal
Slide 30: Commentary on financial position
This slide explains our financial position at the end of the third quarter. The balance of interest-bearing debt is 175.1 billion yen as we made progress in repayment of long-term loans and lease obligations, compared to the year before. Shareholders’ equity ratio reached 44.8%, and is approachin
Slide 31: Major Cash Flow Items
Major Cash Flow Items (JPY Bn) 1H FY3/12 1H FY3/13 Difference Net income before income taxes and 161.2 154.0 ▲7.2 minority interests Depreciation 62.4 61.6 ▲ 0.8 Other ▲33.0 ▲16.7 +16.3 Cash Flow from Operating Activities 190.7 198.9 +8.2 Capital Expenditure (1) ▲81.0 ▲110.6 ▲29.5 Other 30.6 ▲1.0 ▲3
Slide 32: FY3/13 (3Q FY12) Earnings & Operating Forecast
Click to edit Master title style FY3/13 (3Q FY12) Earnings & Operating Forecast
Slide 33: FY3/13 Earnings Forecast (Consolidated Results)
FY3/13 Earnings Forecast (Consolidated Results) FY3/13 Previous (JPY Bn) FY3/12 Actual FY3/13 New Forecast Difference Forecast Revenue 1,204.8 1,228.0 1,215.0 +13 Operating Expense 999.8 1,042.0 1,050.0 ▲8 Operating Profit 204.9 186.0 165.0 +21 Ordinary Income 197.6 177.0 155.0 +22 Net Income 186.6
Slide 34: Commentary on earnings forecast
Our operating revenue forecast for the full fiscal year was revised upward by 13 billion yen from 215 billion, as previously forecast, to 1,228 billion yen. Operating profit and ordinary profit were revised upward by 21 billion yen and 22 billion yen respectively to 186 billion yen and 177 billion
Slide 35: Change of Consolidated Operating Profit Forecast
Change of Consolidated Operating Profit Forecast Operating Profit improved by JPY 21Bn from the previous announcement → Upward adjustment from JPY 165Bn to JPY 186Bn Revenue increased by JPY 13Bn , fuel cost decreased by JPY 4Bn and other expenses are expected to decrease by JPY 4Bn Cost cut 186
Slide 36: Commentary on operating profit forecast revision
We revised operating profit upward from 165 billion yen to 186 billion yen. The revised forecast includes the decline of 700 million yen in profitability, an assumption when the suspension of 787 aircraft continues to the end of the fiscal year. In our forecast, we expect to increase operating re
Slide 37: FY3/13 Earnings Forecast (Consolidated Balance Sheets / Cash Flow)
FY3/13 Earnings Forecast (Consolidated Balance Sheets / Cash Flow) Consolidated Balance Sheet (JPY Bn) End of FY3/12 Actual FY3/13 New Forecast FY3/13 Old Forecast Difference Total Assets 1,087.6 1,190.0 1,174.0 +16 Interest-bearing Debt 208.4 159.0 175.0 ▲16 Shareholders' Equity 388.5 544.0 521.0 +
Slide 38: Commentary on balance sheet and cash flow forecast
The balance of interest-bearing debt is estimated to be 159 billion yen, primarily because repayment of finance lease obligations is proceeding smoothly. Shareholders’ equity ratio is estimated at 45.7%, as shareholder’s equity forecast will be 544 billion yen. Cash Flow from operating activities
Slide 39: Supplemental Reference
Click to edit Master title style Supplemental Reference
Slide 40: Revenue of International Routes by Geographic Segment
《Supplemental Reference》 Revenue of International Routes by Geographic Segment Passenger Revenue (% of the whole int’l routes) Passengers 3Q FY3/13 (%) 3Q FY3/12 3Q FY3/13 Y/Y 3Q FY3/13 Y/Y (’000) 3Q FY3/12 3Q FY3/13 Y/Y Y/Y (OCT-DEC) (OCT-DEC) Pacific Routes 32.5% 34.0% +1.5pt 34.5% +2.5pt Pacific
Slide 41: FY3/13 Operating Forecast (Air Transportation Business)
FY3/13 Operating Forecast (Air Transportation Business) International Passenger Domestic Passenger 1H FY3/13 2H FY3/13 FY3/13 New 1H FY3/13 2H FY3/13 FY3/13 New (Y/Y basis) Actual Forecast Forecast Actual Forecast Forecast ASK +4.5% +4.7% +4.6% +7.6% ▲1.1% +3.1% RPK +17.1% +5.5% +11.0% +7.7% ▲1.3% +
Slide 42: Number of Aircraft in Service
《Supplemental Reference》 Number of Aircraft in Service Number of Aircraft Used by the JAL Group End of FY3/12 End of 3Q FY3/13 2012/3/31 2012/12/31 Increase/ Decrease Owned Leased Total Owned Leased Total Boeing 777-200 15 0 15 15 0 15 -- Boeing 777-200ER 11 0 11 11 0 11 -- Boeing 777-300 7 0 7 7 0
Slide 43: Updated Information on Route/Frequency Plan
《Reference》 Updated Information on Route/Frequency Plan International Routes Domestic Routes 【Flight suspension】 【New Routes】 Change (round-trip) Route Change (round-trip) Date of Commencement Route Period Effective Aircraft HND-Chubu 0 –> 1 /day 31 Mar 2013– 4 flights/wk –> 0 Narita=Helsinki 25 Feb
Slide 44: Contact
Contact Thank you for your attention! For any inquiries regarding this presentation, please contact the following Japan Airlines Financing and Accounting Office Phone： 81-3-5460-3068
Slide 45: Important Information Regarding the Presentation
Important Information Regarding the Presentation 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