Finnair - Q3 profitability was very high
Finnair’s Q3 profitability topped estimates while revenue was much as estimated. The company achieved a very high bottom line as fuel prices remained relatively low, but their recent increase will have an adverse effect going forward. Finnair narrowed its EBIT guidance a bit, but the midpoint for the year remains at EUR 180m.
- Finnair Q3 revenue increased by 13.7% y/y to EUR 817.3m vs the EUR 825.7m/804.2m Evli/consensus estimates. Passenger revenue grew by 21.5% y/y to EUR 673.1m and was in line with our estimate.
- Comparable EBIT amounted to EUR 94.3m, compared to the EUR 74.1m/83.8m Evli/consensus estimates. Higher fuel prices had an adverse impact on profitability towards the end of the period.
- Fuel costs were EUR 238m vs our EUR 259m estimate. Staff costs amounted to EUR 120m, compared to our EUR 129m estimate, while all other OPEX+D&A were EUR 392m vs our EUR 399m estimate.
- Cost per Available Seat Kilometer was 7.74 eurocents, compared to our estimate of 8.04 eurocents.
- Finnair specifies its guidance for FY ’23 revenue and now estimates it to be in the range of EUR 2.9-3.1bn. Finnair now sees comparable EBIT for the year in the range of EUR 160-200m, based on current fuel prices and exchange rates. The guidance midpoint suggests Q4 EBIT at EUR 19m. Finnair still expects to operate an average capacity of 80-85% in 2023 (in terms of ASK) compared to 2019, including the agreed wet leases.