FINANCIAL HIGHLIGHTS FOR THE FIRST QUARTER ENDED 30 JUNE 2010
Since the beginning of 2010, the Airline Industry is showing continued growth in demand as the industry recovers from the global financial crisis. After a dip in April due to the volcanic ash crisis in Europe, international passenger demand has returned to its upward growth trend. For the year 2010, the International Air Transport Association (IATA) is forecasting an improved picture for the global aviation industry.
The first quarter is traditionally a low season period. In addition, the volcanic ash crisis, the continued volatility of fuel prices and the depreciation of the Euro have impacted negatively on the results of the Group and the Company. Notwithstanding a highly competitive environment in which the airline is operating, the Group and the Company has posted results in line with our budget.
The Group and the Company recorded losses for the quarter ended 30 June 2010 of Eur 11.4 million and Eur 11.6 million respectively after accounting for total losses amounting to Eur 6.1 million on fuel hedges.
For the corresponding period of last year, the Group and the Company recorded losses of Eur 13.0 million and Eur 13.2 million respectively after accounting for total losses of Eur 17.0 million on fuel hedges.
Before taking into account the total losses arising from fuel hedges of Eur 6.1 million, the Group and the Company posted losses for the quarter ended 30 June 2010 of Eur 5.3 million and Eur 5.6 million respectively compared to profits of Eur 4.0 million and Eur 3.8 million for the same period last year.
The average fuel price for the quarter increased by 42.5 % when compared to the corresponding quarter of last year. As a result of this increase in price, the Company’s fuel costs increased by Eur 8.4 million.
Finance costs increased from Eur 1.7 million to Eur 5.0 million mainly on account of loss in exchange rate following the depreciation of Euro.
In spite of the volcanic ash crisis which resulted in revenue shortfall estimated at Eur 2 million, the Operating revenue of the Company was significantly higher by Eur 11.8 million (15.9%) for the first quarter April to June 2010 as compared to the corresponding period last year. This increase in Operating revenue is mainly attributable to significant increases in both passenger carried and cargo uplifted. Passengers carried increased by 16.8% from 226,119 to 264,098 whereas cargo tonnage increased by 31.6%. The passenger load factor also increased slightly to reach 75.5%.
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Total Shareholder’s Funds for the Company reduced from Eur 105.2 million as at 31 March 2010 to Eur 97.7 million as at 30 June 2010. The resulting net assets per share as at 30 June 2010 is Eur 0.95 (Rs 37.69) as compared to Eur 1.03 (Rs 42.56) as at 31 March 2010.
Although IATA forecasts continued improvement in passenger and cargo revenues, Air Mauritius remains vulnerable to uncertainties in its traditional markets and to volatility in both fuel prices and exchange rates. However, various measures are continuously being taken to improve passenger yields and contain costs. In the light of these circumstances, the Company remains cautiously optimistic.
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