Icelandair Group: Other information disclosed according to the rules of the Exchange
02-Feb-2017 Icelandair Group (the Company) will publish the results for the 4th quarter and the full year of 2016 at the end of business on February 7th. A draft of the financial statements has been prepared that shows that EBITDA will be close to the upper limit of the guidance that the Company has published, which is USD 210-220 million.
The inflow of bookings at Icelandair has changed for the worse recently. Bookings come in slower than was anticipated and average airfares on the market have decreased more than was forecasted. That development can be attributed to increased competition and it is also possible that changes in international politics affect demand. In addition currencies have developed in an unfavourable way compared to last year, fuel price has increased and a strike in the Icelandic seafood industry has had a negative impact on the Company's freight operations. On the other hand, the outlook in the Company's hotel operations is good.
Given the current assumptions we expect that the EBITDA for 2017 will be USD 140-150 million. We assume that jet fuel price (without hedging) will be 540 USD/ton, EUR/USD will be 1.07 and the ISK Exchange Rate Index will be 164 on average in 2017.
Various measures have already been taken in the Company's operations that are expected to lower costs and increase income. Continued organic growth is expected and the Company's management believes that long-term prospects are good.
The Company's balance sheet was strong at the end of 2016 as per the Company's policy. According to the draft account, the equity ratio is more than 40% and cash and cash equivalents is about USD 250 million. The Company is therefore well equipped to take on any external fluctuations.