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Third party research

Finnair: Q3 will not bring much relief - Evli Research

Finnair

This is a third party research report and does not necessarily reflect our views or values

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Finnair’s Q2 losses were pretty much as expected. The company estimates Q3 operating loss will also be roughly EUR 150m, in other words comparable to recent quarters.

Q2 revenue amounted to EUR 111.8m, compared to the EUR 142.1m/145.0m Evli/cons. estimates. Top line grew by 63% y/y.

Available Seat Kilometers grew 312% y/y in Q2, while Revenue Passenger Kilometers increased by 281%. Passenger Load Factor was thus 30.6% and decreased by 2.4pp y/y. Cargo tonnes grew by 101% y/y and 8% q/q.

Q2 adjusted EBIT was EUR -151.3m vs the EUR -143.9m/-144.2m Evli/cons. estimates. Q2 comparable EBITDA was EUR -70.0m vs the EUR -58.9m/-58.0m Evli/cons. estimates.

Fuel costs were EUR 31m vs our EUR 38m expectation. Meanwhile staff costs amounted to EUR 54m, compared to our EUR 55m projection. All other OPEX+D&A combined were EUR 186m vs our EUR 205m estimate.

Cost per Available Seat Kilometer was 18.55 eurocents, compared to our estimate of 20.09 eurocents.
Finnair expects Q3’21 operating loss to be of similar magnitude compared to the previous quarters despite gradual increase in revenue (we had estimated EUR -91m Q3 EBIT). Finnair estimates monthly operating cash flow to turn positive by the end of this year.

Finnair now targets EUR 200m (prev. EUR 170m) in permanent cost savings by 2022 based on 2019 operational volumes. Some EUR 125m are volume-driven and EUR 75m are fixed costs.
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