KLM forecast earnings per share for full year up by some 10%.ELMSFORD, N.Y.--(BUSINESS WIRE)--Jan. 30, 1996--December quarter earnings per share increased from NLG NLG The ISO 4217 currency code for the Dutch Guilder. 0.89 to NLG 1.08. KLM's pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income was NLG 110 million, a decrease of 15% compared to the fiscal 1994/95 third quarter. KLM KLM Kaiserliche Marine (Enigma: Rising Tide game) KLM Koninklijke Luchtvaart Maatschappij (Royal Dutch Airlines) KLM Klub Langer Menschen (German: Tall Person Club) posted net income of NLG 102 million, an improvement of NLG 19 million compared to the 1994/95 third quarter. The 1995/96 third quarter operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was NLG 56 million. Last year's third quarter operating income was NLG 193 million. Nine-month earnings per share declined by NLG 0.29 to NLG 5.81. Pre-tax income for the nine months amounted to NLG 677 million, representing an improvement of NLG 61 million. Net income for the first nine months was NLG 539 million, compared to NLG 559 million for the 1994/95 period. Operating income for the 1995/96 first nine months amounted to NLG 553 million, compared to NLG 785 million in the 1994/95 period. KLM 1995/96 third quarter traffic growth, in revenue ton-kilometers, was 10%, well above market growth. Capacity, expressed in available ton-kilometers, expanded 15%. Load factor consequently declined 3.1 percentage points compared to the previous third quarter. Yield per revenue ton-kilometer declined 3%, the result of unfavorable currency exchange fluctuations and shifts in the traffic mix. Unit-costs dropped 2%, the result of favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency exchange fluctuations and changes to the passenger/cargo capacity ratio. Break-even load factor increased 0.6 of a percentage point to 71.2% in the third quarter. In the third quarter, passenger traffic developed favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. : plus 10% year-over-year. Passenger load factor increased 0.1 of a percentage point to 71.2%. Yield per revenue passenger kilometer kilometer one thousand (103) meters; 3280.83 feet; five-eighths of a mile; abbreviated km. declined 2%, a balance of the positive effects of ongoing business class traffic growth, the improvement in yield in local currencies and the unfavorable effects of exchange rate fluctuations. Developments in cargo markets were below expectations. Overall market growth dropped below 5% in the third quarter. While KLM managed to grow 10% in cargo revenue ton-kilometers, this growth could not keep pace with the capacity increase of 19%. Cargo load factor dropped 5.5 percentage points to 68.0% as a consequence. Higher cargo rates in local currencies did not compensate fully for the negative effects of exchange rate fluctuations. KLM's cargo capacity growth will be re-adjusted in line with lower market expectations. Northwest For names and places containing the slightly longer word 'northwestern' (or variants), see . Northwest or north west is the ordinal direction halfway between north and west on a compass. It is the opposite of southeast. Airlines Corporation announced record after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. earnings of USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 392 million for the full year 1995 (1994: USD 296 million). This development warrants a more rapid scale-back of provisions previously taken against KLM's investment in Northwest Airlines' preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. . The company started adjusting the value of the preferred shares more rapidly in the December December: see month. 1995 quarter. This resulted in a NLG 50 million additional increase of income from associated companies associated company associate n → Partnerfirma f associated company n → società collegata compared to the preceding quarter ended Sept. 30, 1995. KLM's pro rate share in Northwest net income applicable to ordinary shareholders will not be included in the company's earnings until Northwest Airlines Corporation common equity is positive. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the pressure on operating income, the company foresees a significant improvement in net income in the fourth quarter, as a result of higher income from associated companies and lower income taxes. The company expects earnings per share for the full year to increase in the order of 10% compared to fiscal 1994/95. KLM's financial position is solid. The net-debt-to-equity ratio at Dec. 31, 1995 was 101. KLM held NLG 3.4 billion in cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has at that date. Third quarter interest coverage ratio improved to 3.7, compared to 2.9 in the same period last year. Company statistics for the nine months ended December 31, 1995 (compared to nine months ended December 31, 1994) Traffic 11% =============== Load factor 72.9% (1.8) points Capacity 13% Margin(a) ==== 6.7% (1.6) points Unit-costs (6%) Break-even load factor =========== 68.0% (0.5) points Yield (5%) (a) Company operating income after interest as a % of traffic revenues. -0- KEY FINANCIAL DATA Three months ended Nine months ended Dec. 31, Dec. 31, 1995 1994 1995 1994 (in millions of guilders) Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. 2,353 2,261 7,293 7,068 Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. 2,297 2,068 6,740 6,283 Operating income 56 193 553 785 Pre-tax income 110 130 677 616 Net income 102 83 539 559 Net income plus depreciation 315 294 1,174 1,169 Earnings in guilders per NLG 20 common share 1.08 0.89 5.81 6.10 Operating income as % of operating revenues 2.4 8.5 7.6 11.1 Return on equity (12-month trend) 11.4 10.9 11.4 10.9 Net income as % of operating revenues 4.3 3.7 7.4 7.9 Net income plus depreciation in guilders per NLG 20 common share 3.43 3.23 12.80 12.89 Interest coverage ratio 3.7 2.9 6.1 3.5 Dec. 31, 1995 March 31, 1995 Net-debt-to-equity ratio(%) 101 124 Equity as a % of total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. 33 30 Book value in guilders per NLG 20 common share 45.42 39.28 Common shares issued and outstanding 86,118,750 85,125,797 Participation certificates issued and outstanding 4,780,723 4,748,551 Dec. 31, 1995 Dec. 31, 1994 Employees 30,690 28,253
KLM AIRLINE OPERATING DATA Three months ended
Dec. 31
1995 1994 % Change
Traffic (in millions of RTK) 2,062 1,875 10
Capacity (in millions of ATK) 2,861 2,493 15
Load factor (%) 72.1 75.2
Break-even load factor (%) 71.2 70.6
Yield (in NLG cents per RTK) 94.9 97.4 (3)
Unit revenue (in NLG cents per ATK) 68.4 73.3 (7)
Unit costs (in NLG cents per ATK) 67.6 68.7 (2)
Airline employees (FTE) 24,113 22,698 6
ATK per employee 119 109 9
Development of passenger traffic Revenue passenger-kilometers (in millions of RPK) 11,012 10,013 10 Available seat-kilometers (in millions of ASK) 15,464 14,080 10 Passenger load factor (%) 71.2 71.1 Yield (in NLG cents per RPK) 13.7 13.9 (2) Yield (in NLG cents per RTK) 144.2 147.1 (2) Unit Revenue (in NLG cents per ASK) 9.7 9.9 (2) Development of cargo traffic Traffic (in millions of RTK) 1,018 926 10 Capacity (in millions of ATK) 1,498 1,259 19 Cargo load factor (%) 68.0 73.5 Yield (in NLG cents per RTK) 44.2 46.6 (5) Unit Revenue (in NLG cents per ATK) 30.1 34.2 (12)
KLM AIRLINE OPERATING DATA Nine months ended
Dec. 31
1995 1994 % Change
Traffic (in millions of RTK) 6,132 5,542 11
Capacity (in millions of ATK) 8,413 7,424 13
Load factor (%) 72.9 74.7
Break-even load factor (%) 68.0 68.5
Yield (in NLG cents per RTK) 96.9 102.3 (5)
Unit revenue (in NLG cents per ATK) 70.6 76.4 (8)
Unit costs (in NLG cents per ATK) 65.9 70.0 (6)
Airline employees (FTE) 23,863 23,046 4
ATK per employee 353 322 10
Development of passenger traffic Revenue passenger-kilometers (in millions of RPK) 34 552 31,857 8 Available seat-kilometers (in millions of ASK) 46,158 43,422 6 Passenger load factor (%) 74.9 73.4 Yield (in NLG cents per RPK) 13.6 14.1 (4) Yield (in NLG cents per RTK) 143.9 149.9 (4) Unit Revenue (in NLG cents per ASK) 10.1 10.4 (3) Development of cargo traffic Traffic (in millions of RTK) 2,876 2,544 13 Capacity (in millions of ATK) 4,280 3,584 19 Cargo load factor (%) 67.2 71.0 Yield (in NLG cents per RTK) 43.8 46.2 (5) Unit Revenue (in NLG cents per ATK) 29.4 32.8 (10) KLM TRAFFIC AND CAPACITY FIGURES PER ROUTE AREA Three months ended Dec. 31 Traffic Capacity (ATK ATK - Andrew Toolkit ) Load Factor (%) (RTK RTK Right To Know RTK Romance of the Three Kingdoms (novel/game) RTK Real-Time Kinematic RTK Receptor Tyrosine Kinase RTK Real-Time Kernel RTK Reclaim the Kop (fan club) ) (in millions of ton-kilometers) 1995 % Change 1995 % Change 1995 1994 North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. 664 3.7 896 9.7 74.1 78.3 Asia/Pacific 609 16.8 776 21.4 78.5 81.6 Central and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. 291 6.5 436 16.3 66.7 72.9 Mid-East/South Asia 192 12.3 277 13.3 69.3 69.9 Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). 155 4.0 255 4.8
60.7 61.2 Africa 151 25.6 221 26.9
68.4 69.1 Total KLM 2,062 10.0 2,861 14.8
72.1 75.2Nine months ended Dec. 31 Traffic Capacity (ATK) Load Factor (%) (RTK) (in millions of ton-kilometers) 1995 % Change 1995 % Change 1995 1994 North America 2,096 4.1 2,789 7.2 75.1 77.4 Asia/Pacific 1,753 17.7 2,220 22.9 79.0 82.5 Central and South America 820 9.8 1,222 13.0 67.1 69.1 Mid-East/South Asia 546 15.5 779 15.9 70.1 70.3 Europe 479 3.0 753 2.1 63.6 63.0 Africa 439 23.9 649 23.9 67.6 67.6 Total KLM 6,133 10.6 8,412 13.3 72.9 74.7 Both cargo and passenger traffic increased significantly on routes to Asia/Pacific and in the niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. Africa and Mid-East/South Asia. -0- Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statement of Earnings Three months ended Dec. 31, (in millions of guilders) 1995 1994 % Change Traffic revenue 2,057 1,921 7 Other revenue 296 340 (13) Operating revenues 2,353 2,261 4 Operating expenses 2,297 2,068 11 Operating income 56 193 Financial income and expense (41) (69) Results on sales of tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → (1) 8 Income from associated companies Northwest Airlines Corporation 89 - Other holdings 7 (2) Pre-tax income 110 130 Taxes (8) (43) Aftertax income 102 87 Minority interests -- (4) Net income 102 83 Preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividends 4 4 Net income attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to common stockholders and participation certificate holders 98 79
Consolidated Statement of Earnings Nine months ended
Dec. 31,
(in millions of guilders) 1995 1994 % Change
Traffic revenue 6,382 6,097 5 Other revenue 911 971 (6) Operating revenues 7,293 7,068 3 Operating expenses 6,740 6,283 7 Operating income 553 785 Financial income and expense (134) (247) Results on sales of tangible fixed assets 34 49 Income from associated companies Northwest Airlines Corporation 166 -- Other holdings 58 29 Pretax income 677 616 Taxes (138) (43) Aftertax income 539 573 Minority interests - (14) Net income 539 559 Preferred stock dividends 11 11 Net income attributable to common stockholders and participation certificate holders 528 548 Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (in millions of guilders) Dec. 31, 1995 March 31, 1995 Fixed Assets Intangible fixed assets 161 167 Tangible fixed assets 9,804 9,806 Financial fixed assets 1,581 1,322 11,546 11,295 Current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. Operating supplies 326 285 Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying 1,542 1,418 Cash and marketable securities 3,402 3,239 5,270 4,942 16,816 16,237 Liabilities Group equity 4,389 3,790 Deferred credits 781 823 Provisions 459 339 Perpetual PERPETUAL. That which is to last without limitation as to time; as, a perpetual statute, which is one without limit as to time, although not expressed to be so. debt 1,858 1,858 Other long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. 6,227 6,307 8,085 8,165 Current maturities of long term debt 450 410 Creditors and accrued expenses Accrued Expense An accounting expense recognized in the books before it is paid for. It is a liability, usually current. These expenses are typically periodic and documented upon a company's balance sheet due to the high probability of collection. 2,652 2,710 Current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. 3,102 3,120 16,816 16,237 Consolidated Statement of Cash Flow (in millions of guilders) Three months ended Nine months ended Dec. 31, Dec. 31, 1995 1994 1995 1994 Net income 102 83 539 559 Depreciation 213 211 635 610 Changes in provisions (1) 5 120 (11) Changes in working capital 4 8 (74) 112 Dividend payment -- -- (149) -- Other changes (60) 57 (201) 29 Cash flow available from operating activities 258 364 870 1,299 Cash flow used for investing activities (199) (261) (639) (633) Financing surplus 59 103 231 666 Cash flow from financing activities Cash Flow from Financing Activities A category in the cash flow statement that accounts for external activities such as issuing cash dividends, adding or changing loans, or issuing and selling more stock. (100) 208 (68) (128) Share issue - - - 1,148 Changes in cash (41) 311 163 1,686 -0- NOTES TO THE CONSOLIDATED STATEMENT OF EARNINGS Operating Revenues 3 Months Ended 9 Months Ended Dec. 31, Dec. 31, (in millions of guilders) 1995 1994 % 1995 1994 % change change Company traffic revenues: Passenger 1,506 1,395 8 4,684 4,496 4 Cargo and mail 450 431 4 1,259 1,176 7 Total 1,956 1,826 7 5,943 5,672 5 Traffic revenues of other consolidated companies 101 95 6 439 425 3 Total traffic revenues 2,057 1,921 7 6,382 6,097 5 Operating expenses 3 Months Ended 9 Months Ended Dec. 31, Dec. 31, (in millions of guilders) 1995 1994 % 1995 1994 % change change Salaries and benefits 669 589 14 1,979 1,720 15 Aircraft fuel 209 205 2 625 644 (3) Materials and consumables 148 150 (1) 447 427 5 Commercial costs 249 226 10 729 695 5 Landing and air navigation air navigation, science and technology of determining the position of an aircraft with respect to the surface of the earth and accurately maintaining a desired course (see navigation). charges 185 174 6 571 556 3 Third-party handling costs 72 70 3 229 219 5 Work by third parties 176 130 35 470 421 12 Depreciation 213 211 1 635 610 4 Operational lease expenses 23 6 283 49 19 158 Miscellaneous 353 307 15 1,006 972 3 ------ ------ -------- ----- 2,297 2,068 11 6,740 6,283 7
Salaries and benefits were 14% higher in the 1995/96 third
quarter than in the same period last year. This increase was the
balance of several factors: resumption of employer's pension premium
payments with an effect of NLG 60 million; a 2% rise in average
salary and a 2% increase in the average work force (in FTE's).
Aircraft fuel costs increased 2% compared to the 1994/95 third
quarter, the result of 9% higher consumption caused by capacity
growth; an 8% lower average dollar-to-guilder exchange rate and a 1%
higher dollar price per US gallon.
Unit-costs decreased 2%. Unit-costs calculations are based on
airline net operating expenses. The latter increased during the
third quarter by 13% compared to last year, from NLG 1,713 million
to NLG 1,933 million.
Taxes
A charge of NLG 8 million for deferred income tax has been
included in the third quarter. Effectively KLM's results in the
first nine months of 1995/96 have been fully taxed, contrary to the
first nine months of 1994/95.
Major events during the 1995/96 third quarter
o KLM added frequencies to Johannesburg, Osaka, Tehran and Tel
Aviv.
o Smokeless flights were introduced on KLM's entire European
network, and flights to and from the United States, Canada and
Australia.
o KLM inaugurated twice-weekly cargo services to Penang,
Malaysia.
o KLM Cargo opened a new sub-hub operation and Cargo Service
Center at Zaragossa, Northern Spain in October, 1995.
o KLM acquired a 26% holding in Kenya Airways.
This report is unaudited Amstelveen, Jan. 30, 1996 The Board of Managing Directors CONTACT: KLM Royal Dutch Airlines Odette Fodor-Gernaert, 914/784-2480 |
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