SAS lost 6.5 billion last year – E24

SAS presented a quarterly report on Tuesday morning showing that the coronavirus pandemic continues to affect the airline.

The result was minus 744 million Swedish kronor in the fourth accounting quarter, compared to minus 2.57 billion at the same time last year.

After the last quarter, SAS lost 6.5 billion Swedish kronor last year. At the same time last year, the full-year result was -9.2 billion.

SAS has skewed fiscal years running from November 1 to October 31, and today is presenting results for the fourth quarter of 2020/21, which in their case is August-October.

Revenue rose to SEK 5.76 billion in the first quarter, up from SEK 3.04 billion at the same time last year.

The Swedish Krona is the same as the Norwegian Krone at the moment, so the amounts are roughly the same as the Norwegian Krone.

It is encouraging to note the continued positive trend from the summer, with increased demand and ticket sales. However, 2021 has been one of the most challenging years in aviation history, and the future is still difficult to predict, primarily due to challenges related to the ongoing pandemic, SAS CEO Anko van der Werf said in a statement.

Focus on the comments

SAS generated a profit before tax and non-recurring items of SEK 911 million in the fourth quarter for accounting purposes, compared to SEK 3.0 billion in the same period last year.

Analyst Jacob Pedersen at Sydbank expected SAS to report a loss before taxes and non-recurring clauses of SEK 684 million.

For the full year 2020/21, a pre-tax loss of SEK 6.4 billion is expected.

However, it’s not just the numbers that worry him.

“Anko van der Werff’s comments on how to get SAS on track will be at least as important as the size of another quarter’s deficit,” Pedersen wrote in an update ahead of today’s results.

SAS wrote in its quarterly report on Tuesday that it remains cautious due to the prevailing uncertainty, but sees sound underlying demand when restrictions are lifted, both for business and leisure travelers.

The short-term effects of the recent development need to be analyzed, but the company appears to remain optimistic about the upcoming peak seasons.

During the pandemic, SAS sees the demand for travel has changed and they expect more leisure travelers and even tougher competition ahead.

must change

The Sydbank analyst has long been skeptical about the pricing of the SAS stake, repeatedly pointing out that it is higher today than it was before the Corona pandemic.

He also predicted that SAS would eventually have to fill the vaults to stay on the flanks.

Pedersen summarizes in his analysis “Changes are necessary to ensure a competitive SAS”.

The analyst lowered his forecast for the year and next as a result of higher fuel prices and a slower traffic recovery.

Cost Alerts

SAS had interest bearing debt of around SEK 33 billion at the end of October.

SAS previously reported that the pandemic is costing the company between 500 and 700 million Swedish kronor per month. However, losses associated with the pandemic have been much lower so far in 2021.

The CEO of SAS notes in the quarterly report that cost reductions across all parts of SAS remain the focus of “improving competitiveness.”

We now have positive cash flow from operations for two consecutive quarters. Work continues to secure liquidity, and at the end of the quarter we had a cash balance of NOK 4.3 billion, which is equivalent to the cash balance of NOK 4.4 billion at the end of the third quarter, Van der Werf wrote.

Fuller planes, however

This fall, SAS continued the good passenger development from the summer months, and saw a significant increase in passenger numbers from September to October.

SAS Group carried 1.4 million passengers in October, an increase of 130 percent over the same month last year. Although more than six out of ten seats were full, there was a 23 percent improvement from October last year.

However, winter is a low season, and a time when airlines lose money. The SAS also, unlike the Norwegian, launched a relatively aggressive wintering programme.

Many x-factors

Combined with rising fuel prices and the emergence of the omikron virus in South Africa, it can hit SAS hard.

This is how the head of SAS put it regarding traffic numbers for October, earlier this month:

We continue to face challenges and an unpredictable future, which makes it extremely important to remain competitive. We must be playful and able to respond to changes in customer demand in the future, van der Werf said.

In parallel, SAS is reorganizing its operations. Earlier this year, SAS Link and SAS Connect were set up as new growth hubs along with the main business, SAS Scandinavian.

This has caused an uproar among former and current employees, who believe SAS is circumventing the Scandinavian SAS’s re-employment obligation.

During the Corona pandemic, SAS Group had to halve the number of employees to about 5,000 employees today.

SAS shares fell about 2.7 percent to 1.25 Norwegian kroner on the Oslo Stock Exchange a few minutes after the stock exchange opened on Tuesday.