Hitt og þetta 25. september 2006

Q3 results for Icelands Avion Group below expectations

Nordic Business Report-September 25, 2006-Q3 results for Iceland's Avion Group below expectations
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Iceland's Avion Group said on Monday (25 September) that its net loss amounted to USD69m in the first nine months of the financial year, compared to a USD32.4m profit in the first nine months of 2005.

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 USD1.40bn in the first nine months ended 31 July 2006 and total expenses amounted to USD1.42bn, the company said.

EBITDA amounted to USD34m and the EBITDA margin was 2.5%.

Financial expenses totalled USD59m for the nine months ended 31 July 2006, and taxes amounted to USD14m.

"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 a USD10m reduction in EBITDA from the figure initially forecast. The results for the fourth quarter and therefore the year in total are projected to fall short of the previous EBITDA forecast of USD165m.

One US dollar (USD) is worth approximately 0.52 British pounds (GBP).

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