LOD, Israel--(BUSINESS WIRE)--David Maimon, El Al's CEO: "The results of the first quarter of 2014 were affected by the seasonality in the aviation industry and the timing of the Passover holiday, which this year occurred in the second quarter compared to last year when it took place in the first quarter.
"During the quarter the Company had to deal with stronger competition, which was expressed by an increase of 8% in traffic at Ben Gurion Airport and an increase of 15% in the capacity of foreign companies. The Company achieved a market share of 33.3% and increased the supply of seats by 6%. The load factor was 80.7%.
"As a response to the trends in global markets and the changing needs in the international aviation industry El Al launched a new aviation brand for low cost flights – UP, which first started operating on March 30, 2014 to the following destinations – Berlin, Budapest, Larnaca, Kiev and Prague.
"We continue to bolster additional growth engines and in this context the sale of tickets through the internet increased by 25% and direct sales in the Call Center recorded an increase of 5%.
"The activities of the Frequent Flyer Club in Israel and globally continued to show impressive growth – and the Club already has 1.35 million members. We are taking steps to change the Club's operating model and in the third quarter a branded credit card will be launched in cooperation with financial institutions.
"On my being appointed CEO, I emphasized the tremendous importance of proper labor relations in the Company, which are a central factor on which the Company's proper functioning is based. I am determined to have a working relationship with employee representatives which characterizes, in any situation, mutual respect and a preparedness to listen, a civil discussion and a continuing attempt for a dialogue based on transparency and trust, as I recently proved we are taking steps in order to reach a new collective agreement. I am certain that together with the Company's employees and managers the Company will achieve great success and meet the numerous challenges we face."
Dganit Palti – CFO: "El Al continues to present high liquidity, which is reflected in the Company's cash flows provided by operating activities of 75.8 million dollars and the balances of cash and deposits at the Company's disposal, which aggregated 132.5 million dollars, compared to 93.4 million dollars at the end of the equivalent quarter in the previous year.
"This liquidity enables the Company to meet all the targets that it set for itself, including executing its investments plan, the main part being equipping itself with new aircraft.
"In the quarter under review the Company invested about 42 million dollars in fixed assets, mainly the acquisition of an additional 737-900 aircraft, a third in the series of eight aircraft ordered, which was received in March 2014.
"The Company repaid loans totaling 47.5 million dollars and raised about 95 million dollars on the American capital market for a period of 12 years at an interest of 2.62%. This amount partially financed the third aircraft and the balance is deposited and earmarked for financing the fourth aircraft which is expected to arrive in July."
FINANCIAL AND OPERATIVE EMPHASES FOR THE FIRST QUARTER OF 2014:
Results for the first quarter of 2014:
- Revenues during the present quarter aggregated $415.4 million compared to $431.0 million during the equivalent period in the previous year, a decrease of 3.6%. Net revenues from passenger flights recorded a decline of 4.2%, mainly as a result of the fall in the passenger-kilometer yield. On the other hand, revenues from cargo increased by 1.4% mainly as a result of the increase in the ton-kilometer quantity transported. The results were affected by the timing of the Passover holiday, which this year occurred in the second quarter, while in the previous year it occurred in the first quarter of the year.
- Operating expenses during the present quarter aggregated $398.4 million compared to $393.1 million during the equivalent quarter in the previous year, an increase of 1.4%. Operating expenses were affected by an increase in salaries which resulted from the strengthening in the average rate of the shekel against the dollar. This increase was set off by the effect of a decline in prices of jet fuel and an increase in the State's participation in security expenses to a rate of 97.5% of total expenses.
- Gross profits for the present quarter aggregated $17.0 million (a rate of 4.1% of turnover) compared to $37.9 million during the equivalent period in the previous years (a rate of 8.8% of turnover).
- Selling expenses aggregated $45.9 million compared to $46.3 million during the equivalent quarter of 2013, a decrease of 0.8% compared to the equivalent quarter in the previous year.
- General and administrative expenses aggregated $27.9 million during the quarter compared to $25.6 million during the equivalent quarter in the previous year, an increase of 9%. The increase stemmed mainly from one-time expenses relating to doubtful debts.
- The loss from operations aggregated 51.9 million dollars, compared to 36.3 million dollars during the equivalent quarter in the previous year.
- Other revenues and expenses during the quarter under report, the Company recorded net other revenues of $4.9 million, mainly as a result of capital gains from the sale and releasing of two engines. On the other hand, during the equivalent quarter in the previous year the Company recorded other expenses, net of 2.3 million dollars, mainly as a result of recording a provision for a cargo claim.
- Financing in the present quarter the Company had net financing expenses of $3.2 million compared to net financing expenses of $7.1 million during the equivalent period in the previous year. The change stems mainly as a result of a decline in expenses due to rate of exchange differences.
- The loss in the first quarter of 2014 aggregated $39.7 million, compared to a loss of $32.5 million in the first quarter of 2013.
- The Company's shareholders' equity on March 31, 2014 aggregated $134 million, compared to $109 million on March 31, 2013 and $180 million on December 31, 2013.
About El Al
El Al Israel Airlines (TASE: ELAL) is the Israeli National Carrier. In 2013 El Al recorded revenues of 2.1 billion dollars and flew 2.2 million passengers. The Company serves 35 destinations around the globe and to many other destinations through cooperation agreements with other airlines. Today the Company operates 39 aircraft, of which 24 aircraft are owned. El Al is Israel's leading cargo carrier. (www.elal.co.il)
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FINANCIAL AND OPERATING EMPHASES |
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|
IN THE FIRST QUARTER OF 2014 |
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|
STATEMENT ON INCOME – (in millions of dollars) |
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|
|
||||||||||||||||||||
|
January-March |
January-March |
Change |
||||||||||||||||||
|
in |
% of |
in |
% of |
Thousands |
% |
|||||||||||||||
| Operating Revenues | 415,417 |
100 |
% | 430,993 | 100 | % |
(15,576 |
) |
(3.6 |
%) |
||||||||||
| Operating Expenses |
(398,448 |
) |
(95.9 |
%) |
(393,135 |
) |
(91.2 |
%) |
(5,313 |
) |
1.4 |
% | ||||||||
| Gross Profits | 16,969 | 4.1 | % | 37,858 |
8.8 |
% |
(20,889 |
) |
(55 |
%) |
||||||||||
| Cost of Sales |
(45,899 |
) |
(11.0 |
%) |
(46,257 |
) |
(10.7 |
%) |
358 |
(0.8 |
%) |
|||||||||
| General and Administrative Expenses |
(27,893 |
) |
(6.7 |
%) |
(25,630 |
) |
(5.9 |
%) |
(2,263 |
) |
9 | % | ||||||||
| Other Net Revenues (Expenses) | 4,893 |
1.2 |
% |
(2,262 |
) |
(0.5 |
%) |
7,155 | ||||||||||||
| Income from Regular Operations |
(51,930 |
) |
(36,291 |
) |
(15,639 |
) |
||||||||||||||
| Financing Expenses |
(5,343 |
) |
(9,466 |
) |
4,123 | |||||||||||||||
| Financing Income | 2,101 | 2,413 |
(312 |
) |
||||||||||||||||
| Company’s Share in Net Pre-Tax Profits, of Affiliated Companies | 279 | 98 | 181 | |||||||||||||||||
| Loss before Taxes on Income |
(54,893 |
) |
(43,246 |
) |
(11,647 |
) |
||||||||||||||
| Tax Benefit | 15,239 |
|
10,786 | 4,453 | ||||||||||||||||
| Loss for the period |
(39,654 |
) |
(32,460 |
) |
(7,194 |
) |
||||||||||||||
| Integrated Report on Financial Affairs | |||||||||||||||
| (Millions of dollars) | |||||||||||||||
| Assets | Liabilities | ||||||||||||||
| 31/3/2014 | 31/3/2013 | 31/12/2013 | 31/3/2014 | 31/3/2013 | 31/12/2013 | ||||||||||
| Current assets |
396 |
355 |
312 |
Current liabilities |
866 |
844 |
728 |
||||||||
| Non-current assets |
1,267 |
1,222 |
1,255 |
Non-current liabilities |
662 |
624 |
660 |
||||||||
| Equity |
134 |
109 |
180 |
||||||||||||
| Total |
1,662 |
1,577 |
1,567 |
Total |
1,662 |
1,577 |
1,567 |
||||||||
|
Operational Data |
|||||||||
|
January-March |
January-March |
change | |||||||
| Thousands of Scheduled & Charter Passenger Segments (paying passengers) | 854 | 881 |
(3 |
%) |
|||||
| Millions of scheduled Revenue Passenger-Kilometers (RPK) | 3,823 | 3,749 | 2 | % | |||||
| Available Seat-Kilometers (ASK) (scheduled, in millions) | 4,735 | 4,588 | 3 | % | |||||
| Load Factors (scheduled) in % |
80.7 |
% |
81.7 |
% |
(1 |
%) |
|||
| Overall market share (scheduled & charter) in % |
33.3 |
% |
34.7 |
% |
(4 |
%) |
|||
| Thousands of Flown Cargo-Tons | 22.8 |
23.0 |
|
(1 |
%) |
||||
| Millions of Revenue Cargo Ton-Kilometers (RTK) | 120.3 | 117.6 | 2 | % | |||||
| Weighted flying hours (incl. leased equipment) – in thousands | 33.8 | 33.9 |
(0 |
%) |
|||||
| Employees – Average personnel years (Company only) | |||||||||
| Permanent | 3,781 | 3,822 |
(1 |
%) |
|||||
| Temporary | 1,947 | 1,884 | 3 | % | |||||
| Total | 5,728 | 5,706 | 0 | % | |||||
|
Number of aircraft in use at end of period |
39 | 38 | 1 | ||||||
| Average age of Company-owned aircraft (in years) at end of period | 12 | 13.2 |
(1.2 |
) |
|||||
