• Joe Breitfeller

SAS Reports Strong Fourth Quarter Finish, Disappointing Full-Year Earnings

Updated: Jan 11, 2020

On Thursday, SAS reported a strong fourth quarter, but disappointing earnings for the full fiscal year. Weaker earnings are largely attributable to higher fuel costs, unfavorable currency moves and a strike.


Closeup of New SAS Livery Detail - Courtesy SAS

Today, SAS reported strong fourth quarter earnings (August-October), but a disappointing fiscal full-year result (November 2018 – October 2019). In Q4 revenue at the Scandinavian carrier grew 6% YoY to MSEK (Million Swedish krona) 13,463 and net income improved 38% from MSEK 623 during Q4 2018 to MSEK 861. Earnings per share (EPS) grew 40% in the fourth quarter to SEK (Swedish krona) 2.19. For the entire fiscal year, revenue was up around 4.5% to MSEK 46,736, while net income fell 39% to MSEK 621 versus the last fiscal year. Full-year EPS declined 42% to SEK 1.54. In today’s announcement, SAS’ CEO, Rickard Gustafson stated in part,


“SAS had an unsatisfactory full year result, significantly lower than last year, due to headwinds from higher jet-fuel costs, unfavorable currency movements and a strike. Despite these challenges, SAS’ attractive customer offering and operational efficiency improvements together with reduced market capacity, especially in the fourth quarter, led to a positive result for the full-year 2019.”


During the fourth quarter, SAS introduced a new livery and strengthened their equity position through a SEK 1.5 billion hybrid bond offering. The bond issue was done in part to strengthen the airline’s balance sheet ahead of the new IFRS 16 (International Financial Reporting Standard) which came into effect on the first of November this year. Some positive recent developments include the selection of SAS by the Norwegian Armed Forces as the carrier of choice over the next four years and SAS’ selection by the Swedish Paralympic Committee. SAS will now be the official Olympic and Paralympic partner for all of Scandinavia’s athletes during the 2020 Olympic Summer Games in Tokyo. SAS Scandinavia is also moving to a single type fleet, with Arlanda joining Copenhagen as an all-Airbus base. In terms of the outlook for the coming year, SAS’ CEO, Rickard Gustafson added,


“The uncertain economic outlook and emerging slowdown in key economies will negatively impact customer demand. The continued weakness of the Swedish and Norwegian krona against the US dollar and the Euro also remains a challenge. For the forthcoming year, we therefore foresee significantly lower growth, both from a demand and supply perspective. Given these market conditions together with higher costs for new aircraft, increased training volumes as well as the implementation of IFRS 16, we expect to deliver an EBIT margin of 3-5% for fiscal year 2020. For the same reasons we expect an increased loss for the first quarter of fiscal year 2020 compared to last year.”


SAS is the leading airline in Scandinavia operating more than 800 daily flights to 125 destinations in Europe, the US and Asia with a fleet of over 150 aircraft. The company has targeted a reduction in carbon emissions by 25% by 2030 compared to 2005 and also hopes to transition to 100% biofuel for domestic flights by 2030.



Source: SAS

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