Page 111 - RusRPTJan22

9.2.3 Aviation corporate news
Aeroflot published strong 3Q21 IFRS results, which were above us and the consensus (Interfax, 26 November) on EBITDA by 7-8% (see our Aeroflot – 3Q21 IFRS at a glance; beat on EBITDA and NI lines, of 29 November). Nevertheless, the market reaction to the beat was muted (as it has been for almost all the results since the start of the pandemic). Below are the key takeaways from the numbers and conference call.
P&L highlights
Revenues continued recovering: they were 21% below the 3Q19 level, vs. a 31% decline in 2Q21. The main support came from the recovery of traffic (RPK was down 27% to 3Q19 vs. 40% decline in 2Q21) and strong yields (up 9% to the pre-COVID level).
Net profit of RUB12bn were 'just' 60% below the 3Q19 level. RUB3bn of that came from Pobeda.
This was in sharp contrast to almost all Aeroflot's European and the US peers, which posted losses (if we adjust the latter for the US government Payroll Support programme). Even lowcosters, such as Wizz Air or Southwest, were in the red.
Cash position
During the quarter, Aeroflot burned RUB20bn, which is a seasonal outflow and was close to the RUB17bn burn in 3Q19. The number was shown in the 3Q21 RAS results and was thus expected.
Overall, the company ended the period with RUB93bn of cash, which we believe would be enough to survive a repeat of 2020, when it burned RUB83bn.
Management call highlights
The discussion mostly revolved around 4Q21.
Management expects international yields to be 30-60% above pre-COVID levels, and domestic to continue the trend set in recent quarters (in 3Q21, domestic yields were down 5% to 3Q19).
October-November cash burn was RUB10bn.
Ongoing New Year holiday sales are strong, as more international destinations are being reopened.
Answering a question about the possible introduction of QR-codes in 1Q22, company said that it cannot estimate the effect.
111 RUSSIA Country Report January 2022 www.intellinews.com