Q1-Q3 Report 2013: Passenger and revenue growth

Revenue increased 11% to DKK 189.2 million in Q3 2013 from DKK 170.8 million in the corresponding period in 2012. The increase is mainly attributable to an increase in passenger numbers on scheduled services and increased charter activity as well as increased ancillary revenues.

EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) in Q3 2013 increased 2% from DKK 36.8 million in the third quarter of 2012, to DKK 37.4 million.

The result before tax (EBT) for the third quarter of 2013 was DKK 13.3 million, compared with DKK 18.1 million in the same period last year and the result after tax for the third quarter of 2013 was DKK 10.9 million, compared with DKK 14.9 million in the third quarter of 2012.

The main explanatory factors for the lower result in Q3 2013 are extraordinarily high cancellation and diversion costs, decreased helicopter activity and exit costs in connection with redelivery of an aircraft.

For the first 3 quarters of 2013 EBITDA amounted to DKK 75.1 million, compared with DKK 68.5 million in the first 3 quarters of 2012, an increase of 10%. The result before tax for the first 3 quarters of 2013 amounted to DKK 17.6 million, compared with DKK 19.8 million in the same period in 2012 and the result after tax amounted to DKK 14.4 million, compared with DKK 16.2 million in the same period in 2012.

The supply of seats (ASK) on scheduled services in the third quarter was 13% higher than in the corresponding period last year. Passenger load factor remained unchanged on 78%. During the first 3 quarters of the year the supply of seats grew by 10% following mainly to the introduction of Airbus capacity in Q1. Passenger traffic increased by 9% in total, both in Q3 as well as in the period Q1 – Q3 2013.

“Fixed-wing activity increased significantly in Q3. The growth in passenger numbers on the scheduled network in Q3 of 9% exceeded our expectations, however a part of this growth spike relates to special events such as the influx of German supporters visiting in relation to the football match versus Germany in September. The planned expansion in charter traffic led to an increase of 42% measured in block hours, despite the closure of charter traffic to holiday resorts in Egypt in September. The expected charter production in Q4 will however be at a lower level than planned due to slow recovery of traffic to Egypt ,” says Magni Arge, CEO.

The introducton of the second and third A 319 aircraft has triggered an improved seat economy, increased flight regularity and has opened up new markets for both scheduled and charter services. The A 319 fleet has been modified in order to support the groundbreaking RNP AR navigational aid system. The system has improved the regularity and saved the company a number of diversions. However, in July severe fog caused unprecedented weather interruptions over a period of four weeks. The total cost of the interruptions and delays is estimated to 8.5 MDKK.

“Without the RNP AR equipped aircraft we would have experienced further 20 diversions and could have incurred much higher costs,” says Magni Arge.

Atlantic Airways currently estimates the full-year result in 2013 to be profitable, but lower than the full-year result in 2012. Other risk factors mentioned in the Risk management section in the 2012 annual report may similarly affect the financial performance.

For further information contact:

Magni Arge, CEO, tel. +298 213700, magni@atlantic.fo

Marius Davidsen, CFO, tel. +298 213703, marius@atlantic.fo

Joen Remmer, COO, tel. +298 213702, remmer@atlantic.fo