SWISS generated total operating revenue of CHF 517 million for the first quarter of 2002 and posted a CHF 190 million consolidated loss for the period. The results confirm that SWISS has embarked well on its new business course: the first-quarter results were an improvement of some CHF 100 million on the projections of the business plan presented in December 2001.
“With our first-quarter results and the future developments we currently foresee, we are confident of achieving the objectives of our 2002 business plan which we announced last December,” says André Dosé, CEO of SWISS. “In particular, we can assume that our net annual result will be better than the projected CHF 1.1 billion loss. But it is still too early to make a more precise prediction of our bottom-line result for the year as a whole.”
A total of 1.9 million passengers were carried on scheduled services in the first three months of 2002, generating operating revenue of CHF 446 million. Together with CHF 18 million in revenue from charter operations and the CHF 13 million revenue from cargo activities, this produced total revenue from flight operations of CHF 477 million.
Yields - average revenue per passenger - were below prior-year levels, but were some five per cent higher than budgeted predictions. Other operating revenue from sources such as maintenance and aircraft leasing activities added a further CHF 40 million to produce total operating revenue of CHF 517 million. The operating revenues generated were substantially higher than those projected in the business plan.
Operating expenditure totalled CHF 699 million. Personnel costs accounted for CHF 100 million of this, while the cost of materials amounted to CHF 119 million. Cost of services totalled CHF 345 million. This figure includes payments to Swissair (currently in administration), which provided aircraft and personnel for the operation of parts of the European network in the first quarter. The other operating expenditure of CHF 106 million includes the costs of administration, advertising, IT and insurance. First-quarter depreciation amounted to CHF 29 million.
First-quarter expenditure includes some CHF 50 million in non-recurring costs arising from the start-up of SWISS. One of the prime factors in the company’s success will be its ability to maintain a favourable cost base.
The consolidated balance sheet showed liquid assets of CHF 1.191 billion at the end of March. The balance sheet value of the aircraft fleet amounted to CHF 1.589 billion. The CHF 604 million increase in this position since the end of 2001 was due to the purchase of 17 of the 52 additional medium and long-haul aircraft required to operate the expanded route network, and to the acquisition of four Embraer RJ 145s. Fixed assets accounted for 53.6 per cent of the balance sheet total at the end of the first quarter. SWISS can build on a sound financial basis: shareholders’ equity totalled CHF 2.159 billion at the end of March, and the balance sheet equity ratio stood at a healthy 56.2 per cent.
A number of cantons participated in the capital increase in April. The new investments increased share capital by a further CHF 272 million from CHF 2.347 billion to CHF 2.619 billion. The share premium of CHF 33 million was appropriated to capital reserves. Shareholders’ equity was thus increased by a total of CHF 305 million. Further capital increases are planned through cantons whose parliaments and/or electorates have yet to approve the proposed investments in the new airline.
With the expansion into intercontinental air services and associated start-up costs, Executive Management expects to post a higher loss for the second quarter of 2002 than for the first three months. But higher load factors and increased yields should, together with improvements on the operational front, ensure an improvement in earnings from the third quarter onwards.
Note: The above financial statements are provisional and are based on Swiss GAAP FER accounting principles. SWISS intends to adopt the International Accounting Standards (IAS) for the presentation of its financial statements in the course of 2002. As a result, a revised set of first-quarter financial statements may be presented at a later date.