Finnair - Strong earnings
Finnair’ Q4 adj. EBIT was clearly better than we expected at EUR +9m vs. our expectation of EUR -9m. Consensus was at -6m. Compared to our estimates the beat looks to be driven by EUR 10m lower fuel costs, and by better revenue. For 2019E Finnair guides 10% capacity growth and revenue growth somewhat behind capacity. We have expected 5% growth for both and hence there is upside to our estimates. Finnair also expects competition to tighten, especially in EU-Asia routes and in short-haul traffic. Dividend is close to estimates. Overall, a good report.
- Q4 revenue was EUR 683m vs. EUR 671/674m Evli/cons.
- Q4 adj. EBIT was EUR +9m vs. EUR -9m/-6m Evli/cons views. Compared to our estimates the beat looks to come from lower fuel costs and better revenue in Q4.
- Absolute costs: actual fuel cost (incl. hedging) was EUR 145m vs. EUR 155m our view. Staff costs were EUR 102m vs. 102m our view. All other OPEX combined were EUR 364m vs. 364m our view.
- Unit costs: CASK was 6.43 eurocents vs. 6.49 our view, while CASK ex fuel was 5.05 eurocents vs. 5.01 our view. CASK in fixed FX and excl. fuel declined by 4% y/y.
- Dividend is EUR 0.274 per share vs. 0.30/0.26 Evli/cons.
- 2019E guidance: Finnair expects capacity growth of about 10% and revenue growth somewhat behind capacity. Adj. EBIT guidance will be provided with Q2 earnings, as usual.