FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED 31 MARCH 2010
The Airline Industry faced ongoing challenges in 2009 such as extreme volatility of fuel prices, substantial losses incurred on fuel hedging programmes, the global financial crisis and stagnating demand. As a result, the global aviation industry recorded losses amounting to USD 9.9 billion. Passenger traffic fell by 2.1% and cargo dropped by 9.8%. Average yields tumbled by 14% and the industry revenues fell by 15%.
The Group and the Company recorded a loss for the year ended 31 March 2010 of Eur 6.0 million and Eur 6.9 million respectively after accounting for total losses from fuel hedges amounting to Eur 38.5 million.
The fuel hedge losses comprised of Eur 4.8 million arising from the de-recognition (unwinding) of 5% of the hedge portfolio and total monthly hedge payouts of Eur 33.7 million.
For the last financial year, the Group and the Company had recorded losses of Eur 85.5 million and Eur 84.3 million respectively after accounting for total losses of Eur 100.5 million comprising of Eur 49.7 million of monthly hedge payout and Eur 50.8 million from the de-recognition (unwinding) of the hedge portfolio.
For the year, the Company implemented various measures to stimulate revenue, modulate capacity to demand, improve efficiencies and reduce costs. These measures have contributed in posting positive operating results despite of all the challenges facing the airline industry.
Before taking into account the total losses arising from fuel hedging of Eur 38.5 million (2008/09: losses of Eur 100.5 million), the Group and the Company posted encouraging results for the year 2009/10 of Eur 32.6 million and Eur 31.6 million respectively compared to Eur 15.3 million and Eur 16.2 million for last year.
The various marketing campaigns undertaken coupled with reduction in capacity led to a record load factor of 80.6%. Notwithstanding the improved load factor, the reduction in capacity and declining yield resulted in operating revenue reducing by Eur 73.7 million (16.6 %).
This was however, more than offset, by a reduction in operating costs of Eur 113 million (24.6%).
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Total Shareholder’s Funds for the Company increased from Eur 49.1 million as at 31 March 2009 to Eur 105.2 million as at 31 March 2010. This major improvement is as a result of the operating profit coupled with a reduction in the unrealized losses on the re-measurement of the remaining hedge positions. The resulting net assets per share as at 31 March 2010 is Eur 1.03 (Rs 42.56) as compared to Eur 0.48 (Rs 21.27) as at 31 March 2009. Outlook
For the year 2010, the International Air Transport Association (IATA) forecasts an improved picture with the global aviation industry expected to earn profits of USD 2.5 billion based on increases in passenger and cargo traffic as well as yield.
Although IATA forecasts an improvement in passenger and cargo revenues, Air Mauritius remains vulnerable both to the crisis within the Euro zone and the mismatch due to our costs being mostly USD denominated and our revenue mainly in Euro. Taking into account these factors, the company is strengthening its presence within the Regional, African and Asian markets by increasing its seat capacity by 15%. Moreover, steps are continuously being taken to improve passenger yields and contain costs. In the light of these circumstances, the Company remains cautiously optimistic for the coming year.
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