THAI Announces Operating Results 2015

29-Feb-2016

Thai Airways International Public Company Limited (THAI) and its subsidiaries announced an operating loss for 2015 from airline business, at the amount of THB 1,304 million, which is better than last year's loss of THB 23,019 million. THAI has one-time cost occurred from the Transformation Plan and impairment of aircraft and assets, the total amount of THB 16,324 million and gain on foreign currency exchange, the amount of THB 3,512 million, respectively. Consequently, the total net loss for 2015 was THB 13,047 million. The Transformation Plan has partially helped to outstandingly push THB 570 million of operating profit from airline business, much improved when compared to loss of THB 22,439 million last year.

Mr. Charamporn Jotikasthira, President of Thai Airways International Public Company Limited, said since the first quarter of 2015 THAI implemented the Transformation Plan approved by the State Enterprise Policy Committee on January 26, 2015. The Transformation Plan in the first phase aimed to stop the bleeding by reducing flight frequency and/or discontinuing the non-profitable routes, cut unnecessary cost items, and generated revenue by adjusting sales strategies, increasing ancillary revenues and enhancing product and services competitiveness. Moreover, THAI launched the Mutual Separation Plan (MSP) for general employees and Golden Handshake scheme for flight attendants to manage manpower affected by the reduction of flights and routes in order to improve the personnel and cost structure and reduce overall costs for the long-term. A total of 1,401 staff joined the program, with 1,277 staff effective in 2015.

THAI received eight new aircraft while decommissioned 15 aircraft following the fleet rationalization strategy resulting in 95 aircraft outstanding as of December 31, 2015 which was a decrease from 102 aircraft in 2014. Nevertheless, the network rationalization strategy resulting in adjusting flight frequency and change of aircraft to match the passenger demand caused more effectiveness on aircraft utilization causing (a) increasing in passenger production by 0.6%, (b) increasing in passenger traffic by 6.5%, (c) increasing in cabin factor to 72.9% comparing with 68.9% that of last year and (d) increasing in numbers of passengers carried to 21.25 million passengers or an increase of 11.3% from that last year.

Strictly following the strategic and transformation plans which were closely monitored by the Management and Board of Directors, THAI and its subsidiaries reported a 2015 operating loss from airlines business of THB 1,304 million, compared with THB 21,715 million from the same period last year due mainly to 11% total expense reduction on the back of fuel expense and non-fuel expense resulting from cost management initiatives. Total revenue declined by THB 2,239 million (1.2%) from last year mainly from 1.5% reduction in passenger revenue and 21.0% reduction in freight revenue. Main reasons for revenue decline were due mainly to high competition, drop in fuel surcharge and strengthen in THB comparing to major currencies which made lower revenue when translated to the Baht term.

In 2015, THAI had THB 3,512 million gain on foreign currency exchange, THB 4,167 million one-time cost occurred from the Transformation Plan and THB 12,157 million in aircraft and asset impairments. Including all these items, the total net loss for 2015 was THB 13,047 million. Loss attributable to owners of the parent amounted to THB 13,068 million. Loss per share was THB 5.99 which was less loss by THB 1.16 (16.2%).

As of December 31, 2015, total assets were THB 302,471 million, a decrease of THB 4,796 million (1.6%) from December 31, 2014, mainly due to impairment loss of aircraft. Total liabilities as of December 31, 2015 totaled THB 269,545 million, which was an increase of THB 3,574 million (1.3%) as of December 31, 2014. Total shareholders' equity amounted to THB 32,926 million, which was a decrease of THB 8,370 million (20.3%) as compared to December 31, 2014.

Refer to full documentation in attachments box, located at the top left, below the headline.