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armchairceonr1
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Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 5:51 am

Norwegian Q3 report is due in ten minutes. Consensus estimates can be found here: https://finansavisen.no/nyheter/bors/20 ... -norwegian. My estimates are:

Total operating revenue: 14234mNOK
Operating profit excl lease, depr and amort. (EBITDAR): 3587mNOK
Operating profit (EBIT): 1987mNOK
Net profit (loss): 990 mNOK

*excluding other losses/(gains)-net
 
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AirPacific747
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 6:16 am

 
Mortyman
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 6:46 am

Also:

In another boost for Norwegian, it announced earlier on Thursday, it had signed a deal with China’s CCB Leasing to take joint ownership of a large fleet of aircraft, thus reducing its debt and increasing its equity.
 
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AirPacific747
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 6:50 am

It’s a testament to Norwegian’s business strategy that they can deliver the kind of result despite of its entire 737MAX fleet grounded and ongoing Rolls Royce engine problems.
 
Someone83
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 7:04 am

AirPacific747 wrote:
https://www.reuters.com/article/us-norwegian-air-results/norwegian-air-third-quarter-profit-beats-forecast-idUSKBN1X30EH

Great news :D FOCUS2019 paid off


They are not yet there, but are getting there. Although 2019 as a total will be a loss

But contrary to the "experts", they will still be flying next year ;)
 
armchairceonr1
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 7:26 am

Q3 numbers looks quite good, revenue was 14404mNOK, 170mNOK more than I estimated. Biggest surprise was maintenance costs, which were 300mNOK below Q3/18. Other gains were 250mNOK.
Someone83 wrote:
AirPacific747 wrote:
https://www.reuters.com/article/us-norwegian-air-results/norwegian-air-third-quarter-profit-beats-forecast-idUSKBN1X30EH

Great news :D FOCUS2019 paid off


They are not yet there, but are getting there. Although 2019 as a total will be a loss

But contrary to the "experts", they will still be flying next year ;)

Actually their guiding for Q4 is very soft. They are guiding 70-470mNOK EBITDAR for Q4, which means that their Q4 losses before tax is going to be 1930-2330mNOK. Q1/20 is not going to be better at all, so you can estimate that their losses would exceed 4 billion in next two quartals. There is still great possibility for new emission before next summer.
 
factsonly
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 7:37 am

The devil is in the details.

The Year to Date (YTD) financial figures are not that great and Q4 will have to be fantastic if annual performance over 2019 is to improve over 2018.

1. A lot of new shares have been issued: 136,308,377 outstanding now in Q3 2019, versus 45,437,059 last year in Q3 2018 an increase of 300%.
2. As a result Earnings per Share (NOK) = 2.1 (YTD 2019) versus 21.2 (YTD 2018) = down 90%
3. Net profit (loss) in NOK million = 263.7 (YTD 2019) versus 1,557.8 (YTD 2018) = down 592%
4. Interest expense in NOK Million = 2,296.3 (YTD 2019) versus 805.2 (YTD 2018) = up 285%
5. Net financial items in NOK Millions = -1,869.5 (YTD 2019) versus +1,620.7 (YTD 2018) = down 217%

Finance remains weak, positive operating performance in one peak summer Quarter is only part of the equation.
 
P1aneMad
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 7:56 am

AirPacific747 wrote:
It’s a testament to Norwegian’s business strategy that they can deliver the kind of result despite of its entire 737MAX fleet grounded and ongoing Rolls Royce engine problems.

I think it is testament to the fact that they have overordered and that route cuts necessitated by the MAX and certain 787s groundings is what saved them. At least for now.
 
YIMBY
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 8:01 am

Very positive news, congratulations to Norwegian, even though the debt is still above worrying.

An interesting detail: the fuel costs are 3600 compared with 3680 in the last year while the fuel consumption has increased 4 %.
Other airlines show diminishing profits and claim that it is due to increased fuel prices (e.g. AY paid for fuel unit 8 % more than last year). Have they had different luck with hedging? Next quarter may show harder times?
 
P1aneMad
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 8:11 am

Fuel prices are going nowhere but down so that will help. Unless they have hedged at higher prices.
Now if only the MAX is grounded until next summer season that would do wonders for Norwegian's bottom line. 8-)
 
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readytotaxi
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 8:23 am

MOL will not be happy.
you don't get a second chance to make a first impression!
Growing older, but not up.
 
armchairceonr1
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 8:35 am

YIMBY wrote:
Very positive news, congratulations to Norwegian, even though the debt is still above worrying.

An interesting detail: the fuel costs are 3600 compared with 3680 in the last year while the fuel consumption has increased 4 %.
Other airlines show diminishing profits and claim that it is due to increased fuel prices (e.g. AY paid for fuel unit 8 % more than last year). Have they had different luck with hedging? Next quarter may show harder times?

AY and NAS reports fuel costs and hedge losses/gains differently. AY's fuel cost include hedges of used fuel when NAS fuel cost include just fuel. Hedge losses/gains is reported at other losses and gains.
 
juliuswong
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 9:27 am

In before naysayers.. Next to collapse Norwegian!!! Norwegian!!

Let me be instigator.

On more serious note, it is good that they are showing a bit of improvement. Did the recent aircraft sale lifted the result a bit?
- Life is a journey, travel it well -
 
YIMBY
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 9:53 am

armchairceonr1 wrote:
YIMBY wrote:
Very positive news, congratulations to Norwegian, even though the debt is still above worrying.

An interesting detail: the fuel costs are 3600 compared with 3680 in the last year while the fuel consumption has increased 4 %.
Other airlines show diminishing profits and claim that it is due to increased fuel prices (e.g. AY paid for fuel unit 8 % more than last year). Have they had different luck with hedging? Next quarter may show harder times?

AY and NAS reports fuel costs and hedge losses/gains differently. AY's fuel cost include hedges of used fuel when NAS fuel cost include just fuel. Hedge losses/gains is reported at other losses and gains.


Thanks for clarification. Hedges seem to show profit, anyway. They report "gains from jet fuel hedges of NOK 23 million"

So NAS bet the right horse, AY the wrong one?
 
rouelan
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 9:59 am

armchairceonr1 wrote:

AY and NAS reports fuel costs and hedge losses/gains differently. AY's fuel cost include hedges of used fuel when NAS fuel cost include just fuel. Hedge losses/gains is reported at other losses and gains.


I am really not sure on that point. It seems that "other losses and gains" refer to the re-evaluation of the hedging portfolio at the time of reporting, something that other airlines usually post in net result.

What do you think ?
 
MIflyer12
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 10:02 am

factsonly wrote:
3. Net profit (loss) in NOK million = 263.7 (YTD 2019) versus 1,557.8 (YTD 2018) = down 592%


You to recalculate that year-over-year % change. If it were down 100%, the total would be zero. I didn't bother with the rest.
 
armchairceonr1
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 12:09 pm

rouelan wrote:
armchairceonr1 wrote:

AY and NAS reports fuel costs and hedge losses/gains differently. AY's fuel cost include hedges of used fuel when NAS fuel cost include just fuel. Hedge losses/gains is reported at other losses and gains.


I am really not sure on that point. It seems that "other losses and gains" refer to the re-evaluation of the hedging portfolio at the time of reporting, something that other airlines usually post in net result.

What do you think ?

Other losses and gains includes unrealized and realised losses and gains during the reported quartal.
"Other losses/(gains)
Gains and losses from foreign currency contracts, forward
fuel contracts, adjustment of market value for total return
swaps, translation of working capital in foreign currency and
net gain or loss from sale of fixed assets"
 
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DL747400
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 12:19 pm

juliuswong wrote:
........it is good that they are showing a bit of improvement.


Improvement? Are you kidding me?

Almost anyone can show reasonably good results in peak season. As others have said, 2019 will still be a loss. Norwegian has still not even come close to demonstrating that they are able to make a profit (or to reach breakeven and cover their costs) on a full year or year-round basis.
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sxf24
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 12:24 pm

DL747400 wrote:
juliuswong wrote:
........it is good that they are showing a bit of improvement.


Improvement? Are you kidding me?

Almost anyone can show reasonably good results in peak season. As others have said, 2019 will still be a loss. Norwegian has still not even come close to demonstrating that they are able to make a profit (or to reach breakeven and cover their costs) on a full year or year-round basis.


There are lots of airlines and other companies that report losses yet survive. The focus needs to be on cash flow. Norwegian owns a lot more of its fleet than a typical LCC and has non-cash depreciation expense.
 
WaywardMemphian
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 12:31 pm

P1aneMad wrote:
Fuel prices are going nowhere but down so that will help. Unless they have hedged at higher prices.
Now if only the MAX is grounded until next summer season that would do wonders for Norwegian's bottom line. 8-)


Middle East in great turmoil, Venezuela in crisis and...get this...oil prices are rather stable.

Thanks American Shale and Canadan Oil Sands.
 
armchairceonr1
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 12:32 pm

I think that their biggest challenge in the near term is cash flow. Like Willie Walsh said couple weeks ago: "Willie Walsh, chief executive of British Airways' owner IAG, said: "In an environment where you are seeing softening economic conditions, where you are seeing fuel prices still in the $60 (£50) range [...] weaker airlines will struggle".

He added Norwegian Air was among those "in a very challenging position" as the airline had "had to sell off the silver [...] for liquidity"."

Norwegian guides EBITDAR between 6100-6500mNOK this year, but they need around 10500-11000 to pay leasing costs, interests and principal repayments of loans.
 
WaywardMemphian
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Re: Norwegian reports Q3, analysts estimates 1429mNOK Net profit

Thu Oct 24, 2019 12:35 pm

My niece and her husband that live in Denver flew to Paris and returned from Rome on Norwegian. They reported a fine trip. But they are Millennials and they don't mind cheap. They loved their 787 over and said the Wamos bird on the way back was ok but the staff fantastic on both. They mentioned older passengers seemed more grumpy over what isn't included in the fare.

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