|
KLM flies over forecasts
|
 |
October 30, 2000: 10:09 a.m. ET
Dutch airline's 2Q profit jumps 71%, high fuel costs force price rises
|
LONDON (CNNfn) - KLM Royal Dutch Airlines NV said Monday profit jumped 71 percent in the second quarter, beating expectations, as it carried a record number of passengers but warned high fuel costs would force price rises in the coming months.
Net income in the three months through September rose to  118 million ($99 million), or 2.52 a share, from 69 million, or 1.47 per share, a year ago. Analysts had expected that figure to come in between 65 million and 90 million, according to Reuters. The company was forced to release its second-quarter figures early after a draft press release was stolen from its auditor KPMG. KLM ended merger talks with Europe's biggest airline, British Airways PLC, last month.
The Dutch airline managed to fill 84.5 percent of seats on planes over the quarter and revenue earned per seat rose 12 percent. But the company said high oil prices meant its operating expenses jumped 9 percent to 141 million.
"Due to seasonal effects, the first half always turns out better than the second half with KLM. Worldwide, people just fly more in spring and summer," said Corne Zandbergen, analyst at Fortis Bank. "The figures are better than expected: costs turned out lower than expected and revenues higher." 
Europe's fourth-largest airline warned its second-half growth would slow from the levels posted in the first-half.
"In view of the healthy revenue development and our commitment to, and, success in containing manageable unit costs, we are confident that operating income will also show a year-on-year improvement in the second half of this fiscal year, albeit to a lesser degree than in the first half year," KLM said.
KLM will raise fares on internal flights by 4 percent and hike cargo rates from Nov. 1 due to high jet fuel costs. The airline said 60 percent of its fuel requirements for the remainder of the fiscal year have been hedged against rising crude oil prices. Rising oil prices have threatened to crimp profits at airlines across the globe.
KLM said despite the 114 million, or 77 percent, rise in fuel costs for the quarter, its operating margin rose to 10.6 percent from 7.8 percent in the same period the previous year. The operating margin, a measure of a company's underlying profitability, shows operating profit as a percentage of revenue.
KLM shares climbed 1.05, or more than 5.5 percent, to 20.05 in mid-afternoon trade in Amsterdam. Shares in British Airways (BAY) jumped 6.4 percent to 282 pence on the back of strong results from KLM and the prospect of falling crude prices after oil cartel OPEC agreed to pump more crude from Oct. 31.
The Dutch airline has seen its share price plunge more than 45 percent since July, as its chances deteriorated of finding a partner in a consolidating sector. In April, KLM pulled out of a two-year-old alliance with Italian partner Alitalia.
Chief Financial Officer Rob Abrahamsen refused to be drawn on its search for partners.
"We certainly can't give any comment on that," Abrahamsen said. "We will be concentrating on our own business. Whatever happens, we need a healthy and profitable operation." 
--from staff and wire reports
|
|
|
|
|
 |
|
