Finnair - Q4 profitability was very strong
Finnair’s Q4 top line and profitability came in above estimates as ticket pricing pressure already eased a bit. Finnair’s costs were largely as we estimated and so the EUR 48m comparable EBIT was almost EUR 13m higher than we expected. Finnair already guides FY’25 financial results, however the EBIT range remains wide at this point. There are some cost pressures, but in our view Finnair has a decent chance of achieving improving profitability this year as it plans to grow capacity on its North Atlantic routes.
- Finnair Q4 revenue grew by 7.7% y/y to EUR 782.9m, compared to the EUR 768.5m/754.9m Evli/consensus estimates. Passenger revenue was up 6.6% y/y. Average ticket fares seem to have stabilized.
- Comparable EBIT was EUR 47.9m vs the EUR 35.3m/31.1m Evli/consensus estimates. Industrial action in Nov-Dec had a negative impact of some EUR 5m on the result.
- Fuel costs amounted to EUR 219m vs our EUR 220m estimate while staff costs were EUR 133m vs our EUR 128m estimate. All other OPEX+D&A came in at EUR 415m, compared to our EUR 415m estimate.
- Cost per Available Seat Kilometer was 7.87 eurocents vs our estimate of 7.85 eurocents.
- The BoD proposes a dividend of EUR 0.11 per share to be distributed for FY’24, compared to the EUR 0.10/0.05 Evli/consensus estimates.
- Finnair plans to increase its total capacity by some 10% in FY’25 and sees revenue to be within the range of EUR 3.3-3.4bn and comparable EBIT within the range of EUR 100-200m. Planned capacity growth is to focus on North Atlantic traffic. Profitability will be burdened particularly by additional costs caused by the sustainable aviation fuel distribution obligation introduced in the EU, as well as rising navigation and landing charges. Q1’25 comparable EBIT will also be negatively impacted by the timing of Easter.