LONDON, Nov. 22, 2002 (PRIMEZONE) -- Virgin Express Holdings Plc (Euronext Brussels:VIRE) (OTCBB:VIRGY):
Highlights
-- Profit after tax 50% ahead of last year. -- Own sales doubled versus last year. -- Operating costs below 6 Euro cents/ASK and in line with easyJet. -- Voted 'Best Short Haul Airline -- 2002' by Belgian travel trade. -- Punctuality remains over 90% throughout year to date. -- On track to deliver full year profit.
Chairman's Statement
We are pleased to announce profits of EUR 4.5 million for the 3rd Quarter of 2002, 50% ahead of the EUR 3.0 million shown for the 3rd Quarter last year. This improvement means that in what has been a difficult trading year, Virgin Express is now profitable year to date and we remain on track to meet our forecast made at the beginning of the year for profit for the full year 2002.
Overall sales within the company grew by more than14%, with own sales more than doubling to replace the guaranteed Sabena revenue that existed a year ago.
Operating costs remained well controlled and for the quarter came in below 6 Euro cents/ASK. This figure is in line with easyJet's performance.
Since revealing our plans in July 2002 to enter the German market, both Lufthansa and TUI announced the start up of their own low cost carriers from Koln/Bonn Airport. Predicting a major price war, we in turn announced on September 19 that we were making the sensible decision to step back from our plans to start operations from Koln/Bonn. We will continue to evaluate other opportunities in Europe.
By mutual consent our current commercial agreement with SN Brussels Airlines will end at the end of March 2003. After the sale of the SN Brussels Airlines slots at London Heathrow (the legal possession of which is now under investigation by the Commercial Court of Brussels), we successfully withdrew our remaining services from London to Brussels at the end of October 2002. Aircraft capacity freed up as a result has been has been transferred to our other European destinations from Brussels.
Despite a seasonal trading reduction in the 4th Quarter, we expect continued progress during the remainder of 2002 to deliver full year profits. This position has been achieved in spite of yields being under significant pressure from traditional carriers heavily discounting prices to generate revenue. Our results have been greatly helped by our outstanding on-time performance throughout the year with more than 9 out of 10 flights departing on-time year to date. The Association of European Airlines published for its members an average figure of 77%.
Over the last six months Virgin Express carried more passengers than any other airline at Brussels Airport, thus making our home base the first main airport in Europe where the market leader is a low fare carrier.
Finally, we are delighted to have been voted 'Best Short Haul Airline -- 2002' by the Belgian travel trade, with Lufthansa coming in second place. We have worked hard over the past two years to deliver a high quality, reliable and value for money product for the European travelling public. This award is recognition of the great improvements that have taken place in our airline but we are not complacent. We remain determined to continue the improvement and offer even better value to our customers.
David Hoare
Executive Chairman
Results for 3rd Quarter
In the 3rd quarter of 2002, Virgin Express Holdings PLC reported net profit of EUR 4.5 million versus last year's net profit of EUR 3.0 million.
Net income per IDS and ADS for the quarter and nine months are shown in the table below.
Earnings per IDS and ADS
Basic 3Q 2001 3Q 2002 Nine Nine
Months Months
2001 2002
EUR per IDS EUR 0.61 EUR 0.92 EUR 0.27 EUR 0.13
USD per ADS(1) USD 0.18 USD 0.91 USD 0.08 USD 0.12
Average Shares 4,907,500 4,907,500 4,907,500 4,907,500
USD/EUR (Average)
Exchange Rate 0.890 0.984 0.896 0.926
USD/EUR (Ending)
Exchange Rate 0.913 0.986 0.913 0.986
(1) On May 28, 2002, Post-Effective Amendment No. 1 to Registration
Statement Form F-6 became effective, changing the American
Depository Receipt to Ordinary Share exchange ratio from
1 ADR = 1/3 Ordinary Share to 1 ADR = 1 Ordinary Share.
The above-represented figures for 2002 reflect this adjusted
ratio change.
Revenues
During the year 2002, the company has continuously demonstrated stable revenue growth and has more than replaced previous years' guaranteed Sabena revenue, which accounted for around 40% of the total turnover. In the 3rd quarter of 2002, the scheduled and ad hoc charter revenues grew by more than 22% and 39% respectively.
Virgin Express' unmatched annual punctuality record of over 90%, which in July reached an all- time high of 92.7%, keeps and attracts passengers. In addition, the company has simplified its fare structure. As of September 2002, passengers have been able to change any tickets they purchase. This increased flexibility takes the already transparent fare structure a step further, and Virgin Express now offers only two types of fares: "Virgin Value" and "Virgin Corporate."
Expenses
Despite the stagnant world economy, Virgin Express was able to deliver a third quarter profit up 50% on last year's quarterly result. This improvement was made by a combination of increased cost vigilance and strict cost control discipline. The system unit costs (cost per ASK) have been decreased by 25% versus last year from 7.90 to 5.94 Euro cents per ASK for the third quarter. For the nine-month period year to date, the system unit costs were 6.30 Euro cents per ASK (2001: 8.06 Euro cents per ASK).
Besides the items under direct control of the company such as the corporate hedging policy, the downward trend in operating cost has also been aided by the lower average fuel price and the strengthening of the Euro against the U.S. dollar.
Operating expenses were EUR 63.0 million, representing a 14% increase versus last year, mainly due to an increased number of flights (7%), with an average sector length longer by 36%.
Other costs beyond the company's control have been significantly increased by the respective suppliers in response to last year's 11th September dramatic events: en-route navigation charges, security charges, airport fees and passenger liability insurance costs.
With the exception of the historical factual information, the statements made in this press release constitute forward-looking statements under the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations and involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those included or contemplated by the statements. The company disclaims any obligation to update any forward-looking statements as a result of developments occurring after the issuance of the press release.
Virgin Express Holdings PLC
Unaudited Results for the Three Months Ended
September 30, 2001 and 2002
Three Months Ended Six Months Ended
30 September 30 September
(EUR Thousands) 2001 2002 2001 2002
Revenue
Scheduled 50,233 61,778 143,154 157,720
Charter 3,121 4,362 7,241 10,285
Other 5,585 1,359 18,392 6,428
Total Revenue 58,939 67,500 168,787 174,432
Operating Expenses
Flight Operations 3,654 4,681 12,557 13,706
Aircraft Fuel 6,972 7,392 20,202 18,774
Navigation Fees 3,289 5,284 9,597 13,303
Maintenance 5,714 8,478 17,635 21,116
Aircraft Ownership 15,115 11,403 45,414 35,834
Station Operations 10,147 10,114 29,515 28,660
Passenger Services 2,678 5,573 8,032 13,451
Sales & Marketing 3,886 5,538 10,816 15,300
Depreciation & Amort. 315 383 980 1,123
General &
Administrative 3,324 4,201 11,037 12,566
Total Operating
Expenses 55,094 63,047 165,785 173,832
Operating Profit 3,845 4,452 3,002 600
Non Operating
Income/(Loss) (882) 157 (1,797) 181
Profit before taxation
and minority
interests 2,963 4,609 1,205 781
Tax and minority
interests 44 (71) 120 (124)
Profit after taxation
and minority
interests 3,007 4,538 1,325 657
Operating Data
Scheduled Services
(Euro cents/km)
RPKs (000) 582,316 825,910 1,619,447 1,992,018
ASKs (000) 634,159 961,059 1,904,008 2,460,405
Load Factor 91.8% 85.9% 85.1% 81.0%
Revenue per RPK 8.63 7.48 8.84 7.92
Revenue per ASK 7.92 6.43 7.52 6.41
Flights Flown 5,077 5,469 15,476 15,385
Passengers Flown 674,795 694,265 1,915,011 1,798,139
Charter Services
(Euro cents/km)
RPKs (000) 44,506 72,061 100,047 151,723
ASKs (000) 62,875 89,718 151,985 206,061
Flights Flown 350 363 790 865
Passengers Flown 32,948 39,699 70,462 86,829
Block Hours Flown 747 939 1,746 2,157
Total
(Euro cents/km)
RPKs (000) 626,822 897,971 1,719,494 2,143,741
ASKs (000) 697,034 1,050,777 2,055,993 2,666,466
Revenue per RPK 9.40 7.52 9.82 8.14
Revenue per ASK 8.46 6.42 8.21 6.54
Flights Flown 5,427 5,832 16,266 16,250
Average Flight
Length 875 1,186 856 1,092
Passengers Flown 707,743 733,639 1,985,473 1,884,968
Block Hours Flown 9,813 12,312 29,133 32,321
Fuel Gallons (000) 6,761 9,365 19,858 24,013
Operating
Cost/ASK (1) 7.90 5.94 8.06 6.30
Average Fuel Price
(U.S. cents
per gallon) 87.75 78.06 88.75 73.58
(1) Excludes cost associated with Virgin Express Catering Services