Finnair - Q1 flew clearly above estimates
Finnair’s Q1 results topped estimates as high unit yields drove passenger revenue. EBIT remained slightly positive, despite the seasonally slow quarter, as the company has managed to revamp its strategy while also benefiting from a favorable market situation.
- Finnair Q1 revenue was EUR 694.7m vs the EUR 572.1m/646.8m Evli/consensus estimates. High unit yields drove passenger revenues way above estimates.
- Adjusted EBIT landed at EUR 0.9m, compared to the EUR -32.4m/-23.1m Evli/consensus estimates. The positive surprise, especially as Q1 EBIT is often negative even in more normal circumstances, reflects both the new strategy’s successful implementation as well as current favorable market environment.
- Fuel costs were EUR 220m vs our EUR 213m estimate. Staff costs amounted to EUR 129m, compared to our EUR 115m estimate. All other OPEX+D&A amounted to EUR 376m, compared to our EUR 319m estimate.
- Cost per Available Seat Kilometer was 8.11 eurocents vs our estimate of 7.07 eurocents.
- Finnair reiterates guidance, expecting FY ‘23 ASK levels to reach 80-85% of those of FY ’19. Unit yields should develop favorably at least over the summer season as demand remains high, however there’s uncertainty beyond that timeframe due to e.g. normal seasonality and inflation. FY ’23 revenue will therefore significantly increase and comparable EBIT will significantly improve y/y, especially due to H1’22 weakness, but will not yet reach the levels of FY ’19.