ANA Group profitable start to FY2008

ANA Group reported consolidated revenue of £1.6 billion and operating profit of £7 million for the first quarter of fiscal year 2008, ended 30 June, a drop of 1.2 per cent increase and 10.5 per cent respectively. Net profit decreased 92.4 per cent year-on-year to £3 million, accounted for by an extraordinary gain on the sale of ANA’s hotel properties in June 2007, which boosted the net profit reported in the first quarter of the previous year far beyond normal levels.

Within the airline segment, a £700,000 year-on-year increase was reported overall, in spite of increasingly severe competition with other airlines and the bullet train in Japan, sky high oil prices and a domestic economy that has begun to show signs of stagnation in the wake of the US economic slowdown. Demand for business travel on North America and Europe routes remained healthy resulting in increased passenger numbers and revenue, and thanks to the a strengthened network, international cargo revenue and volumes showed increases of more than 18 per cent and 26 per cent respectively.

“While we are managing to weather the current conditions and seize opportunities to increase profitability where they arise, the high cost of oil makes the operating environment increasingly difficult,” said Tomohiro Hidema, ANA’s chief financial officer. “Thanks to our hedging policy we were able to contain oil related costs to a minimum this quarter, but expect to see them rise as the year progresses and so the outlook for our fuel bill is not optimistic.”

Cargo

Domestically, a new pricing structure was introduced in April, affording greater flexibility to customers and allowing ANA to better fit their needs, which led to an almost 10 per cent increase in revenue. While on the international front, although overall demand for exports from Japan remained flat, ANA concentrated its efforts on cargo flows between China and the rest of Asia and between North America and Europe, as a result of which, both volumes carried and revenue showed a marked increased.

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