Fuente : Icelandair
http://www.icelandair.com/

FL Group’s Best Ever 6 month Results

/noticias.info/ · Excellent results of investment activities
· Increased emphasis on aircraft business
· Operations of subsidiaries in aviation and tourist services satisfactory

The operations of FL GROUP, i.e. the parent company and the fourteen subsidiaries, showed good results in the first six months. Turnover was ISK 20.1 billion, increasing by 6.4% compared with the same period last year. Profit before income tax amounted to ISK 2.3 billion, compared with a profit of ISK 148 million last year. As a result the Group’s performance has improved by nearly ISK 2.2 billion between years and has never been so good in the first half of any year since the Group commenced operations. These excellent results were largely generated by the Group’s investment business.
Ragnhildur Geirsdóttir, President and CEO of FL GROUP, states that this excellent performance reflects the modifications made to the Group’s structure and operations during recent years. “The capital formation by the Group’s established aviation and tourist services has enabled us to expand vigorously, creating a new and exciting corporate image and enhanced results. Traditionally the Group has suffered considerable seasonal fluctuations with losses in the first half of each year, but as a result of our expansion into investment business and aircraft business our performance during January - June this year indeed surpasses all previous records.”

The operating revenues of FL GROUP and subsidiaries generated in the first six months came to ISK 20.1 billion, compared with ISK 18.9 billion in the corresponding period in 2004, an increase of 6.4% between years. Operating expenses amounted to ISK 20.7 billion, an increase of 8,8% between years, and loss before financial items amounted to ISK 679 million. This includes expenses from share gifts to employees and executive stock options amounting to ISK 200 million. The financial items, however, were positive by almost ISK 3 billion, mostly due to unredeemed profits from sales of stock.

As during recent years operating-capital formation was strong during the first half of 2005. Net cash provided by operating activities amounted to well over ISK 4.2 billion, compared to ISK 3.7 billion for the corresponding period last year. The Group’s balance sheet has changed much during the first six month as a result of investing and aircraft business. On 30 June the Group's assets were in all ISK 69.5 billion, compared with ISK 43.5 billion by the end of last year.

Excellent Results from Investments

The Group's investing business, managed by the subsidiary FL Investment, yielded excellent results during the first half of the year. On 30 June unredeemed profits created by the increased value of the Group’s stocks portfolio was ISK 2.8 billion, but from July 1st to today the value of the Group’s stock portfolio has increased by almost ISK 3 billion. The largest of the FL Investment assets are stocks in easyJet, Íslandsbanki and KB banki. The booked value of the Group’s market securities is ISK 15 billion and stocks in futures contracts amount to ISK 7.8 billion.


Increased Emphasis on Aircraft Business

The Group’s increased emphasis on aircraft business is evidenced by the founding of a new subsidiary, Icelease, which has bought or sold 27 aircraft during the first two quarters. The most important transactions was the purchase of 15 Boeing 737-800 aircraft which will be delivered by Boeing in 2006 and 2007. Leasing contracts have already been concluded for five of these and negotiations for five more are on their final stages. Aircraft sales profits are ca. ISK 200 million during the second quarter 2005, and the balance sheet will show additional ISK 9 billion due to payments made in connection with the 737s’ purchase.

Operations of Subsidiaries in Aviation and Tourist Services Satisfactory
The operating results of the subsidiaries in aviation and tourist services are satisfactory with reference to the present adverse operating environment. Icelandair’s international airline business, which expanded considerably during the first half of 2005, is the most important single factor.

During the first six months of this year, the services offered by Icelandair, the Group’s largest subsidiary, increased by 12.3% compared with the previous year, the number of passengers rose by 12.7%, and the passenger load factor rose to 76% which is a 2.6% p.p. increase over the same period last year. “There is no doubt that these results are good, but the increased operating costs of Icelandair have had detrimental effects on the airline’s performance, which does not fully measure up to our expectations or last year’s results. What has the greatest effect are costs incurred because of the operating expansion, and a considerably higher fuel price bill can be expected for Icelandair this year compared to last year.” says Ragnhildur Geirsdóttir.

Future Emphasis

Ragnhildur Geirsdóttir says that the earnings prospects for 2005 are good and various projects are ahead that will further strengthen the company. “We are making changes to all operating units, in the investment operation, aircraft trading unit and in the flight and travel operating units to further strengthen FL Group. The importance of the investment operation within the Group will be increased, where currently various development projects are under progress and we will use our financial strength to grow further. In aircraft trading we are looking for new opportunities, building up strategic alliance with strong parties and we have new contracts in the pipelines. In flight and travel services the emphasis will be on growth and profitability. Our objective is a ISK 1 billion profit from Icelandair’s operation next year, we will make arrangements to further increase profitability in the travel service companies, aircargo revenues will increase by about 50% as Bluebird is taken into FL Group and we have plans to enter new markets in that field. In charter we are looking at introducing new types of aircraft in addition to entering new markets to increase growth. At the same time we plan to diversify our operation by taking part in businesses outside the flight and travel industry”, says Ragnhildur Geirsdóttir. notas_de_prensa_archivo