ATW Daily News

SAS Group posts improved third-quarter profit, cites 'strong economy'

Thursday November 9, 2006

SAS Group reported third-quarter net income of SEK604 million ($84.3 million), up 14.2% from a profit of SEK529 million in the year-ago quarter, on an 8.9% rise in revenues to SEK18.04 billion.

Acting President and CEO Gunnar Reitan called the results "positive" but noted that a "strong economy is a significant contributory factor," adding, "The result is far from the group's return requirement and, accordingly, it is necessary to continue focusing full energy on cost-cutting measures."

Third-quarter operating income was SEK1.15 billion, widened 43.9% from SEK802 million in the year-ago quarter. Group traffic grew 5.2% to 10.75 billion RPKs on a 3.6% lift in capacity to 14.09 ASKs, producing a load factor of 76.3%, up 1.2 points.

Scandinavian Airlines reported third-quarter net income of SEK529 million, widened from SEK129 million in the year-ago quarter, on a 7.6% increase in revenues to SEK10.06 billion. Operating expenses grew 4.3% to SEK8.55 billion, including a 24.5% jump in jet fuel costs to SEK1.93 billion. Operating income of SEK1.5 billion was up 30.4% from SEK1.15 billion in the year-ago quarter. Traffic was flat at 7.55 billion RPKs on an 0.5% drop in capacity to 9.61 billion ASKs, producing a load factor of 78.6%, up 0.4 point.

For the nine months ended Sept. 30, SAS Group had a net profit of SEK93 million, 63.2% above the year-ago period's result of SEK57 million. Operating income was SEK874 million, a 24.3% rise over SEK703 million in 2005.

The Group said "highly favorable economic conditions [and] no signs of recession" portend well for the fourth quarter and next year, but warned that "uncertainty remains about the strength in market growth going forward and the trend for jet fuel prices."

by Aaron Karp

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