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Hitt og þetta 25. september 2006

(IFN) Iceland?s Avion Group 3Q results below expectations

Reykjavik (IFN) Iceland's Avion Group's net loss amounted to USD69 million in the first nine month of the financial year, compared to a USD 32.4 million profit in the first nine months of 2005, the company announced on Monday.

Avion Group changed its financial year end in 2005 so all comparisons for last year are for different reporting periods. Third quarter 2006 is therefore for the period 1 May to 31 July 2006 and third quarter 2005 is from 1 July 2005 to 30 September 2005.

Avion Group's third quarter results were below expectations. Total revenues amounted to USD1.400 billion in the first nine months ended 31 July 2006 and total expenses amounted to USD1.42 billion, the company said.

EBITDA amounted to USD34 million and the EBITDA margin was 2.5%.

Financial expenses amounted to USD59 million for the nine months ended 31 July 2006, and taxes amounted to USD14 million.

?I should emphasise that figures for the comparative period include Avion Group prior to the completion of the acquisition of Excel Airways Group and before significant acquisitions such as Eimskip, Travel City Direct and Star Airlines," Executive Chairman Magnus Thorsteinsson said.

Avion Group's revised budget for the current financial year forecasts lower EBITDA than had been expected. The fourth quarter will be difficult because of challenging market conditions in the UK due to terrorist threats, delays and an unusually hot summer, Avion said.

Additionally, currency changes will result in USD10 million reduction in EBITDA than forecasted initially. The results for the fourth quarter and therefore the year in total are projected to fall short of EBITDA forecast of USD165 million, as previously stated.

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Icelandic Financial News (IFN) is available on Factiva, a joint venture between Reuters and Dow Jones Newswires, FT.COM, LexisNexis, Comtex, Gale and Thomson via the Nordic Business Report.