On April 27, ANA Holdings announced its consolidated financial results for the fiscal year ending March 31, 2023 (FY2022). The presentation was led by ANAHD President and Representative Director Koji Shibata and Senior Executive Officer and Group CFO Kimihiro Nakahori.
Mr. Shibata gave an overview of the full-year results and the forecast for the next fiscal year. 2022 full-year results showed sales of 1,070.4 billion yen, operating income of 120.0 billion yen, and net income of 89.4 billion yen, the first positive results in three fiscal years. Net sales increased 687.1 billion yen (up 67.3%) from the previous year, but operating expenses increased 394 billion yen (up 33%), which resulted in a much higher profit than the profit target of 21 billion yen set at the beginning of the fiscal year.
Mr. Shibata’s proposition for the current fiscal year is “to significantly expand sales and steadily improve profits while maintaining the results of cost structure reforms,” and for the fiscal year ending March 31, 2024, he forecasts sales of 1.97 trillion yen, operating income of 140 billion yen, and net income of 80 billion yen. As of February, the company had forecasted 120 billion yen in operating income, but in light of current conditions and other factors, it has raised its forecast by 20 billion yen.
He explained that the airline has had a good start to the current fiscal year, and that Golden Week reservations were 1.3 times higher for domestic routes and 2.7 times higher for international routes compared to last year. In addition, he explained that the Airbus A380 aircraft was returned to daily service on the Narita – Hawaii route from April 20, and that the Golden Week Hawaii route has recovered to 90% of its pre-Corona level.
By region, the report states that North American and Asian routes are recovering steadily, but that European, U.S., and Chinese routes are still weak. The company cites the difficulty of increasing the number of flights to Europe and the U.S. because they cannot fly over Russia and must be rerouted, and the visa issue and the delay in lifting the ban on group travelers as reasons for the China route. Nevertheless, the China route has great potential for future growth, and although the number of flights is still only about 30% of the pre-Corona number, the airline plans to increase flights to Shanghai and other destinations in May.
While international cargo revenues are expected to decrease by 90 billion yen compared to FY2022, international passenger and domestic passenger revenues are expected to increase by 183.5 billion yen and 100.4 billion yen, respectively, for a total increase of 262.5 billion yen. Operating expenses are expected to be 60.0 billion yen, taking into account the impact of investment in human capital and price hikes, in addition to the increase in expenses linked to the scale of operations.
The company also mentions in the “Basic Plan for the Promotion of Tourism Nation” approved by the Cabinet on March 31, and although it intends to increase the number of international flights in order to clear the pre-Corona level of 31.88 million inbound travelers by 2025, the current situation remains that ground handling and security inspection staff, which are essential for aircraft takeoffs and landings, have been reduced by 10% to 20% in Japan as a whole compared to the pre-Corona level. However, the number of ground handling and security check staff, which are essential for takeoffs and landings, has decreased by 10-20% in Japan as a whole compared to the pre-Corona level, and this remains an issue.
He explained that the ANA Group is working to restore productivity in the regions where it has decreased, and is also working to improve the treatment of employees through base increases and higher starting salaries. As for the 9.4 billion yen lower net income estimate for FY2023 compared to FY2022, the company said that this is due to an increase in FY2022 compared to the initial forecast due to the recording of deferred tax assets. Regarding dividends, the company said that it aims to resume dividend payments as soon as possible, but that it has not yet decided on the dividend at this time.
Mr. Shibata concluded, “Three years ago, there were no customers left at the airport and the tarmac was filled with planes that could not fly. From this situation, we have finally reached a turning point where we are out of the tunnel at Corona. This is due to the support of our stakeholders and the efforts and cooperation of each and every one of our employees. Once again, I would like to express my deepest gratitude. From now on, we will make the most of our new management vision, “A world filled with excitement,” and steadily implement our medium-term management strategy to ensure our return to a growth trajectory,” he said.
Mr. Nakahori explained the breakdown of revenue and expenditures by business segment. In international routes, the company aggressively captured demand for connections between North America and Asia, which had been recovering earlier, and in the second half of the year, demand for business travel from Japan and demand for inbound travel to Japan increased significantly due to the gradual relaxation of Japan’s water border measures, and in March the single-month seat utilization rate rose to 81%. The number of passengers reached 4.21 million, approximately 5.1 times that of the previous year. As a result, passenger revenue was 43.4 billion yen, up 517.9% from the previous year.
In the domestic market, leisure demand increased due to the absence of activity restrictions throughout the fiscal year, the support of the National Travel Support Program, and the “¥7,000 one-way anywhere on domestic flights” sale to commemorate the 70th anniversary of the company. Passenger volume increased to 74% of the previous year’s level. Passenger volume was 34.53 million, approximately 1.9 times that of the previous year. As a result, passenger revenue was 529.5 billion yen, an increase of 89.2% over the previous year. In the route network, the Boeing 777 aircraft, which had undergone engine refurbishment, became fully operational, and the airline aggressively increased the size of its fleet and set up extra flights during the period of increased demand.
International cargo volume was down 17.5% from the previous year to 805,000 tons, due to a decrease in dedicated cargo flights by passenger aircraft as passenger demand recovered, and the impact of a decline in demand for automobile-related parts. On the other hand, international cargo revenues decreased 6.3% (20.7 billion yen) from the previous year to 308.0 billion yen, due to efforts to maintain unit price levels by aggressively capturing high unit value cargo such as large special commercial items and pharmaceutical-related items.
Peach Aviation’s (Peach) LCC business has expanded the scale of its operations due to a significant increase in demand following the easing of restrictions on domestic activities and water border measures in various countries. For international routes, Peach resumed flights that had been suspended (Kansai International Airport – Seoul, Kansai International Airport – Taipei, Kansai International Airport – Hong Kong, etc.), and in March, it launched a new Chubu – Taipei route. As a result, the number of passengers increased significantly to 7.775 million, up 82.2% from the previous year, and passenger revenue rose 138.7% (up 52.4 billion yen) to 90.2 billion yen.
On the financial side, the balance of interest-bearing debt decreased by 142.1 billion yen from the previous year to 1,607.9 billion yen, mainly due to the repayment of loans. Operating cash flow was 449.8 billion yen due to the recording of income before income taxes and an increase in the number of airline ticket reservations issued. Real free cash flow increased by 485.0 billion yen from the previous year to 373.1 billion yen as the company continued to curb capital investment.
© Source travel watch
Auto Amazon Links: No products found.
Auto Amazon Links: No products found.