Third profit warning in six months, an Ebitda in 2014 will be lower than in 2013, “an ardent obligation” to reduce costs in the words of Chief Financial Officer, and a decline in investment, thus ending the three-year restructuring plan Transform 2015 Air France-KLM, which was supposed to straighten the group to restore the level of its competitors, Lufthansa and IAG (British Airways, Iberia, Vueling).
Contrary to the expectations of management, the group’s recovery is far from finished at the end of the year. For the record, the main objective of this plan (reduce by two billion euros in net debt at 4.5 billion) had already been postponed for a year.
One billion euros of EBITDA less compared to the initial target
On Thursday night, the French group has again revised down its forecast of Ebitda (earnings before interest, taxes, depreciation and amortization) in 2014. It should be between 1.5 and 1.6 billion euros against a range between 1.5 and 1.8 billion announced in October and 2.5 billion before. This performance is lower than that achieved last year ($ 1.8 billion), even though the Transform 2015 plan measures are supposed to be in force.
As a result, it lacks a billion between forecast beginning of the year and the performance achieved 12 months later. 500 million euros are to be put on the account of the 15-day strike in September pilots, but the rest is explained by the continued weakness in unit revenue, “since the summer on flights long distance and continuing in December “, according to Pierre-François Riolacci, CFO of Air France-KLM.
This also indicated that new tax rules had been implement the Netherlands which will result in the inability to record in its Ebitda “a positive adjustment of his pension expense (retirement, Ed) that was previously anticipated” . Finally, several sources say the savings targets Transform the plan have not been achieved. Any potential adjustment will be recorded in the “Other non-current income and expenses” , the company said in a statement.
Lower oil prices
Finally The fuel price decrease is ultimately limited in the fourth quarter, “ in view of the continued decline in crude oil prices (Brent), higher than the price of jet fuel (kerosene), the structure of supply contracts and hedging portfolio “.
” We buy kerosene but we cover on Brent (crude oil). The Coverage focuses on the brent and not on kerosene, “said the CFO.
This degrades the cash 2014, he acknowledged. Therefore, drastic measures of cost reductions are expected in the plane perfom 2020. “It is obvious that the Perform plan will be strengthened in two ways: to increase our unit cost reductions, it is a burning obligation and revise down our investment programs “, said Pierre-François Riolacci.
” We had high capital envelopes 2015 and 2016 . It is certain that we will adapt. We are working on for several weeks, “he said. He has raised the possibility of delaying aircraft deliveries.
Air France-KLM is to receive ten Boeing 777 in 2015 and 2016, regional aircraft, especially the first B787 , provided at KLM end of 2015.
“Kerosene prices reduced the gains that can be achieved by using new aircraft. The market rather gives us flexibility to See some aircraft changes with reasonable economic conditions, “argued Pierre-François Riolacci.
Unveiled in September, forecasts Perform plan seem very far the group targeted a return on capital employed (ROCE) ever achieved in the history of the group of 9 to 11% in 2017 as against 3% in 2013 but growth in EBITDA before operating lease (EBITDAR) for 8 to 10% per year between 2013 and 2017 and a net debt to adjusted EBITDAR ratio below 2.5% in 2017, against 4.2% in late 2013.
At the opening of the stock exchange, Air France-KLM unscrews 7% on Friday morning.
Communication Group under the direction of Pierre-Henri Gourgeon pinned
Coincidence. The stock market watchdog has requested a penalty of 1.5 million euros against the airline Air France-KLM in a folder on financial communication of the group during its 2010-2011 fiscal year.
fine of 50,000 euros for the same offense was also required against Pierre-Henri Gourgeon, head of the group at this time, during a meeting of the disciplinary committee of the Financial Markets Authority (AMF) Friday . The decision of the disciplinary committee, an independent body of the AMF, is expected within the next few weeks, as usual.
fellow policeman Grievances interests include the presentation of the company’s performance targets on late public disclosure of inside information, that the objective would not be achieved as well as the presentation of the consolidated financial statements at 31 March 2011.
Character “incorrect, inaccurate and disingenuous” of consolidated financial statements late March 2011
After a difficult start to fiscal year 2010, the airline group has shown several times optimistic communicated before having to revise its objectives. “We have been a roller coaster,” argued for his part Pierre-Henri Gourgeon, present at the meeting and “we are obliged to follow these developments,” said he argued.
In addition, “the complaint criticized in question in relation to inaccurate, imprecise and insincere consolidated financial statements at 31 March 2011 is of a manipulative side,” said the representative of the college, some conclusions differed from those of the rapporteur of the Commission.
Since the date took place the facts, they do not all fall within the scope of the same texts.
In late 2010, the AMF s’ is indeed with a greater deterrent arsenal with the law of banking and financial regulation directly after the 2010 financial crisis.
The Sanctions ceiling was then raised to 100 million and the college may now appeal the decisions of the Sanctions Committee.
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