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UPDATE 1-Finnair swings to Q2 operational profit, shares rise
August 10, 2012 / 8:40 AM / 5 years ago

UPDATE 1-Finnair swings to Q2 operational profit, shares rise

* Q2 operational profit 14.7 mln euros vs loss of 3.2 mln in poll

* Says sees H2 profitability to improve vs H1

* Shares rise some 5 pct

HELSINKI, Aug 10 (Reuters) - Finland’s national carrier Finnair, mired in years of losses, posted a surprise swing to profit in what it called its operational results in the second quarter thanks to higher passenger numbers and lower fuel costs.

The news lifted Finnair shares sharply and by 0813 GMT they were 4.9 percent ahead at 2.13 euros.

Nordea analyst Pasi Vaisanen said good April-June results increased investors’ expectation that Finnair could put an end to its four-year long losses.

“Share rise of 5-10 percent is justified considering the results and the outlook for this year,” he said.

The airline is tackling weak profitability by cutting costs and jobs.

It is handing over a third of its European routes to low-cost British airline Flybe and last week announced Lufthansa’s LSG Sky Chefs will buy its catering division.

Finnair posted an operational profit of 14.7 million euros ($18.1 million) in April-June, compared with a loss of 13.8 million euros a year ago. The average forecast in a Reuters poll was an operational loss of 3.2 million euros.

The airline defines its ‘operational’ result as earnings before interest and tax (EBIT) excluding non-recurring items, capital gains and changes in the fair value of derivatives and some exchange rates.

Turnover grew 10 percent to 594.4 million euros, also beating the average consensus in the poll.

The airline posted an operating loss, which includes one-off costs, the change in the fair value of derivatives and in the value of foreign currency denominated fleet maintenance reserves, of 18.1 million euros compared with a loss of 25.2 million loss a year ago.

Finnair repeated that it expected operational profitability to improve in the second half of the year.

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