Aeroflot in the first half of the year reduced its net loss in annual terms by 24 times

Aeroflot in the first half of the year reduced its net loss in annual terms by 24 times, to 1.6 billion rubles, follows from the company’s message. Revenue increased by 48% to RUB 205 billion due to increased traffic. The company also disclosed its result for 2022 for the first time — Aeroflot ended it with a loss of 40.5 billion rubles, but thanks to state support, the result was even better than in post-pandemic 2021.

Aeroflot posted a net loss of RUB 1.6 billion in the first six months of 2023. compared to a net loss of 38.3 billion rubles. six months of 2022. The company’s revenue increased by 48.1% to RUB 205.4 billion. For the first time in a year and a half, the company disclosed non-consolidated financial statements under RAS, the last time such financial statements were published at the end of 2021. This reporting does not include the performance of subsidiaries Pobeda and Rossiya.

The financial result of the company is highly dependent on the application of the new lease accounting standard – FSBU 25/2018 “Lease Accounting”, which began to be used only in 2022. According to it, liabilities under lease agreements are taken into account on the balance sheet, and their revaluation is reflected in the income statement – “non-cash” profit or loss.

“In connection with the devaluation of the ruble under the new standard in 2023, it was necessary to reassess the lease obligations at a higher rate and recognize the exchange loss,” Andrey Chikhanchin, First Deputy General Director for Commerce and Finance, said in an explanation.

Excluding the transition to the new standard, Aeroflot received a loss of RUB 81.6 billion in the first half of 2023, while in the first half of 2022 the company would have made a profit of RUB 80.7 billion. The presence of profit is caused by a positive revaluation of foreign exchange lease liabilities due to the strengthening of the ruble in that period.

Aeroflot also disclosed its RAS figures for 2022 for the first time. The company received 40.5 billion rubles. net loss against 45.6 billion rubles. for 2021, excluding adjustment for the new lease accounting standard. Thus, the financial performance of Aeroflot in 2022, despite sanctions and a sharp restriction on flights abroad, turned out to be even better than in 2021. Taking into account adjustments, the company’s loss in 2022 amounted to 14.3 billion rubles. against 53.7 billion rubles. loss in 2021.

At the same time, sales revenue in 2022 decreased by 12%, from 378 billion to 332 billion rubles.

“The pressure on revenue was associated with a decrease in specific revenue per passenger-kilometer, including due to changes in the structure of transportation, as well as investments in prices,” the release states.

In 2022, the company “had a significant number of sales and promotions, offering ticket discounts of up to 50%, and significantly reduced ticket prices during the summer season.” In 2022, the carrier received 39.3 billion rubles. state support “in the form of industry and other subsidies.” Taking into account government support measures, the adjusted gross loss amounted to 10.6 billion rubles, “which is twice as good as in 2021.”

The cost of sales for 2022 amounted to RUB 382.6 billion, which is 4.6% lower than the same period in 2021. “Despite large-scale optimization measures and a conservative approach to budgeting, there was a significant increase in a number of items, primarily jet fuel costs,” the report says.

Fuel costs in 2022 increased by 23.2 billion rubles, by 31.4%, compared to the same period in 2021. This is due to the increase in the price of jet fuel by 44.2% per year, to 65.6 thousand rubles. per ton.

Thus, only the price factor led to an increase in fuel costs by 31.3 billion rubles, “which was partially offset by a decrease in fuel purchases due to a decrease in the number of flights.”

The negative impact of the growth in the cost of fuel and lubricants on the financial position of the airline was partially mitigated due to the presence of a damper.

Selling and administrative expenses in 2022 amounted to RUB 12.1 billion. and 10.6 billion rubles. “and decreased by 41.9% and 17.4%, respectively, primarily due to reductions in marketing and reservations costs.”

Aigul Abdullina