SAS Group Interim Report January-September 2009
Key ratios for the third quarter
• Operating revenue: MSEK 11,076 (13,287) ( 16.6%)
• Number of passengers: 6.2 million (-14.7%)
• Earnings before nonrecurring items in continuing operations: MSEK 37 (301)
• EBT margin before nonrecurring items in continuing operations: 0.3% (2.3%)
• Income before tax: MSEK 114 (110)
• Net income for the period: MSEK 152 (-1,986)
• Earnings per share: SEK 0.06 (-1.97)
Key ratios for January-September
• Operating revenue: MSEK 34,595 (40,047) (-13.8%)
• Number of passengers: 18.8 million (-15.8%)
• Earnings before nonrecurring items in continuing operations: MSEK -814 (-50)
• EBT margin before nonrecurring items in continuing operations: -2.4% (-0.1%)
• Income before tax: MSEK -1,904 (-609)
• Net income for the period: MSEK -1,643 ( 3,571)
• Earnings per share: SEK -0.86 (-3.49)
Comments by the CEO
During the third quarter, the global economy remained very weak. The effects of the global recession are tangible throughout the entire airline industry and significant savings programs are being implemented to address the record yield fall in the industry, which is resulting in major losses. IATA, the airline industry organization, is indicating a drop in yield of 20-30% for intercontinental services.
For the SAS Group, the third quarter was characterized by an increased load factor, but weaker yield. The fall in yield is primarily attributable to lower demand for business travel and increasing competition. However, the load factor was strengthened as a result of the comprehensive capacity reductions we implemented in line with the SAS Group’s strategic approach, Core SAS, and the many aggressive market initiatives we have carried out. Despite the major challenges in the industry, third-quarter earnings were positive and amounted to MSEK 37 before nonrecurring items in continuing operations. In addition, there were nonrecurring items in a net amount of MSEK 77 and, accordingly, income before tax was MSEK 114.
Core SAS, which was initiated at the beginning of February and contains cost-saving measures totaling SEK 4.5 billion, was implemented according to plan. We have carried out cost-saving measures corresponding to SEK 2.5 billion on a full-year basis, which had an earnings effect for the first three quarters of the year totaling SEK 1.3 billion. A total of 1,884 full-time employees left the Group, while capacity was reduced according to plan. We are now approaching completion of the capacity reductions, but the full cost-saving effect of Core SAS, corresponding to approximately SEK 3.2 billion, remains for the rest of 2009 and for 2010. In parallel with implementation of the capacity and cost reductions mentioned above, further commercial initiatives are being undertaken to increase the Group’s revenues. It is pleasing to see how punctuality continues at an excellent level and places SAS as the third most punctual airline in the world, at the same time as customer satisfaction is at its highest since January 2007. Our market position remains the strongest in the Nordic region, while our route network is the most comprehensive.
SAS is continuing the implementation of Core SAS with full vigor. In total, savings corresponding to SEK 5.2 billion are being implemented, of which approximately SEK 3.9 billion remains to impact the result in 2009 and 2010.
President and CEO
Direct questions to: Investor Relations SAS Group: Vice President Sture Stølen +46 8 797 14 51, e-mail: email@example.com