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Financial Results Announcement (February 4, 2013)
Today, I have three points to announce and they are: 1. about the suspension of the Boeing 787 fleet, 2. The JAL Group's consolidated financial results for the first three quarters of fiscal year 2012, and lastly, about the change in our company's dividend policy.
Yoshiharu Ueki
President
Firstly, owing to the various issues of the Boeing 787 aircraft, we had to suspend the operations of our 787 fleet, causing many customers and related parties much inconvenience and concern, for which we sincerely regret and apologize.Right now, investigations are underway into the root cause, and related organizations from Japan and the US, the manufacturer, as well as suppliers etc. are working closely while providing maximum cooperation in the investigations.
Also, as we announced in the press release today, JAL will postpone the launch of the new Narita=Helsinki service originally scheduled for February 25, 2013 using the 787 aircraft.As it will be difficult to operate this service with an alternative aircraft type, I am sorry to customers and to all related parties who have been waiting in anticipation for this new flight which is expected to provide smooth connections to and from regions in Europe.
As soon as we can confirm the safety of its operations and customers can feel a sense of security, we would like to restore the 787 fleet back into service.
Next, let me explain about the financial results. Please refer to the press release "JAL Group Consolidated Financial Results for the First Three Quarters of Fiscal Year 2012".
JAL achieved a total operating revenue of 942 billion yen, while operating expenses were 783.8 billion yen following the deepening of management productivity. As a result, we are reporting operating profits, ordinary income and net profits of 158.1 billion yen, 154.2 billion yen and 140.6 billion yen respectively.
We were able to reach the target goals set out in the Mid-Term Management Plan of ensuring above 10% operating profit margin with 16.8% in this reporting period, as well as close in on the 50% or more in equity ratio with a 44.8% result.
As for the forecast of consolidated financial results of fiscal year 2012, while there are concerns of impact from the suspension of the Boeing 787 fleet since January 2013, business has been robust, especially on European, North American and Southeast Asian routes. With various measures including new products and services being steadily promoted, revenue is expected to be lifted to 1,228 billion yen.
Although the weakened yen is expected to push fuel costs, etc. upward, the effects of ongoing cost reduction efforts have been effective, and consolidated operating expenses are expected to decline by 8 billion yen from the previously announced forecast. Therefore, we now forecast the operating income to be 186 billion yen, with an ordinary income of 177 billion yen, leading to a net income of 163 billion yen for the fiscal year ending on March31, 2013.
Lastly, let me talk about the alteration of our company's dividend policy. Please check the last page of the press release "JAL Group Consolidated Financial Results for the First Three Quarters of Fiscal Year 2012". Providing returns to its shareholders of the key management goals of the JAL Group, and we consider that calculations of dividend payouts to the shareholders should be in relation with consolidated financial results of the fiscal year.
Dividend payments were expected to be equivalent to approximately 15% of the consolidated net income for the fiscal year ending March 31, 2013. However, since receiving requests from many shareholders for a more substantial shareholders' return after the relisting, as well as an indication that the management target set in the Mid-Term Management Plan spanning fiscal years 2012 to 2016 for an equity ratio of 50% and above may be achieved in the next fiscal year, the dividend policy from hence will be revised to 20% of the consolidated net income for the fiscal year. As such, the expected dividend payment per share for the year ending March 31, 2013, is 180 yen.
On the premise of steadfastly keeping the highest level of safe operations, we will aim to maximize income, minimize cost and maintain a solid management to achieve the forecast set for this term.
Thank you very much.
END
Also, as we announced in the press release today, JAL will postpone the launch of the new Narita=Helsinki service originally scheduled for February 25, 2013 using the 787 aircraft.As it will be difficult to operate this service with an alternative aircraft type, I am sorry to customers and to all related parties who have been waiting in anticipation for this new flight which is expected to provide smooth connections to and from regions in Europe.
As soon as we can confirm the safety of its operations and customers can feel a sense of security, we would like to restore the 787 fleet back into service.
Next, let me explain about the financial results. Please refer to the press release "JAL Group Consolidated Financial Results for the First Three Quarters of Fiscal Year 2012".
JAL achieved a total operating revenue of 942 billion yen, while operating expenses were 783.8 billion yen following the deepening of management productivity. As a result, we are reporting operating profits, ordinary income and net profits of 158.1 billion yen, 154.2 billion yen and 140.6 billion yen respectively.
We were able to reach the target goals set out in the Mid-Term Management Plan of ensuring above 10% operating profit margin with 16.8% in this reporting period, as well as close in on the 50% or more in equity ratio with a 44.8% result.
As for the forecast of consolidated financial results of fiscal year 2012, while there are concerns of impact from the suspension of the Boeing 787 fleet since January 2013, business has been robust, especially on European, North American and Southeast Asian routes. With various measures including new products and services being steadily promoted, revenue is expected to be lifted to 1,228 billion yen.
Although the weakened yen is expected to push fuel costs, etc. upward, the effects of ongoing cost reduction efforts have been effective, and consolidated operating expenses are expected to decline by 8 billion yen from the previously announced forecast. Therefore, we now forecast the operating income to be 186 billion yen, with an ordinary income of 177 billion yen, leading to a net income of 163 billion yen for the fiscal year ending on March31, 2013.
Lastly, let me talk about the alteration of our company's dividend policy. Please check the last page of the press release "JAL Group Consolidated Financial Results for the First Three Quarters of Fiscal Year 2012". Providing returns to its shareholders of the key management goals of the JAL Group, and we consider that calculations of dividend payouts to the shareholders should be in relation with consolidated financial results of the fiscal year.
Dividend payments were expected to be equivalent to approximately 15% of the consolidated net income for the fiscal year ending March 31, 2013. However, since receiving requests from many shareholders for a more substantial shareholders' return after the relisting, as well as an indication that the management target set in the Mid-Term Management Plan spanning fiscal years 2012 to 2016 for an equity ratio of 50% and above may be achieved in the next fiscal year, the dividend policy from hence will be revised to 20% of the consolidated net income for the fiscal year. As such, the expected dividend payment per share for the year ending March 31, 2013, is 180 yen.
On the premise of steadfastly keeping the highest level of safe operations, we will aim to maximize income, minimize cost and maintain a solid management to achieve the forecast set for this term.
Thank you very much.
END
