Austrian Airlines 2002 Results

The Austrian Airlines Group would like to announce its preliminary result for the year.
The result for earnings before interest, tax, depreciation and rentals (EBITDAR) is expected to total EUR 463.3m, an increase of EUR 243.7m on the comparable result for the 2001 business year. The result from operating activities (EBIT) also saw a clear and sustained improvement - at EUR 41.4m, it rose by EUR 130.3m compared to the figure for the previous year. When the financial result of minus EUR 37.4m is taken into account (minus EUR 75.1m the previous year), profit before tax is expected to be plus EUR 4.0m
After setting this figure off against taxes on earnings (active tax deferral of plus EUR 39.0m) and the result due to minority shareholders (minus EUR 0.4m), the net profit for the year is expected to be plus EUR 42.6m.
Chief Executive Officer Vagn Soerensen made the following statement on the result for 2002, his first full business year with Austrian Airlines Group: “By concentrating the strengths of everybody involved in securing the future of the Austrian Airlines Group, we have successfully begun our return into the profit zone. We have laid the foundation for our recovery and regained our self-confidence. From now on, we shall operate in the tough international air travel marketplace as a streamlined, more specialised competitor!”
The Group succeeded in increasing cash flow in 2002 to a level of plus EUR 518.0m. It consequently exceeded the figure for the previous year by a full EUR 468.9m.

On the basis of its consistent and extensive restructuring programme, the Group succeeded in forcing interest-bearing liabilities down by EUR 433.6m. As a result, net gearing (the degree of indebtedness) fell from 337.9 % to 290.2 %. In total, the Group also increased its equity ratio from 12.7 % to 14.6 %. The significant improvement of cash flow, lower liabilities and reduction in net gearing all served to strengthen the ability of the Austrian Airlines Group to withstand a crisis.

Chief Financial Officer Thomas Kleibl used the opportunity to outline the cornerstones of the Group’s restructuring programme. “We achieved our primary objective for 2002: to rapidly reduce liabilities, and by association to increase our equity ratio . The next stage is to produce a sustained increase in value by improving profitability further still.”
Due to the fact that it is impossible to estimate the magnitude and extent of the economic downturn and the consequences of any possible conflict in Iraq, we cannot currently offer an accurate forecast of the result for the 2003 business year.
From today«s perspective however, the annual result for 2003 will exceed the result of 2002. Offering an assessment from a medium-term perspective, Vagn Soerensen commented as follows: “Should the current situation lead to war in Iraq, it will of course have a temporary effect on our result. Essentially, however, the positive effects of the course of restructuring undertaken by the Group are now unstoppable!”