Finnair - Profitability climbed above estimates
Finnair’s Q2 revenue was well in line with estimates while the EUR 66m comparable EBIT was clearly stronger than expected. Finnair also specified its profitability guidance range for the year and updated its long-term profitability target to 6% by the end of 2025.
- Finnair Q2 revenue grew by 36.2% y/y and amounted to EUR 749.2m, compared to the EUR 724.1m/759.6m Evli/consensus estimates. Passenger revenue grew 55.5% y/y to EUR 612.1m. Demand remains strong and is already at a good level for the upcoming winter season.
- Comparable EBIT was EUR 66.2m vs the EUR 43.7m/50.7m Evli/consensus estimates.
- Fuel costs amounted to EUR 220m vs our EUR 221m estimate, while staff costs were EUR 125m, compared to our EUR 122m estimate. All other OPEX+D&A amounted to EUR 365m vs our EUR 376m estimate.
- Cost per Available Seat Kilometer was 7.41 eurocents, compared to our estimate of 7.39 eurocents.
- Finnair specifies its guidance in terms of comparable EBIT and now estimates the figure to be in the range of EUR 150-210m for the year, based on current fuel prices and exchange rates. Finnair expects FY ’23 revenue not yet to reach the level of FY ’19.
- Finnair updates its strategic profitability target to 6% comparable EBIT margin by the end of 2025 and also intends to call its EUR 200m hybrid bond in early September.