Korean Airlines 2010 2Q Results 2010. 8. 13 1
Disclaimer This presentation is for informational purposes only, contains preliminary financial and other information about Korean Air Lines Co., Ltd. and is subject to updating, revision, amendment and completion. This presentation does not and is not intended to constitute or contain any offer of securities for sale or a solicitation of an offer to purchase any securities of Korean Air Lines Co., Ltd. or any other company and neither this presentation nor anything contained herein shall form the basis of any contract or commitment. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements or trend information that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in the forward-looking statements in this presentation. In addition to statements which are forwardlooking by reason of context, including without limitation, statements referring to risk limitations, operational profitability, financial strength, performance targets, profitable growth opportunities, and risk adequate pricing, the words "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar expressions are intended to identify forward-looking statements. Korean Air Lines Co., Ltd. assumes no obligation to update or revise any such statements or any other information contained herein to reflect events or circumstances that may arise after the date of this presentation c 2
Summarized Balance Sheet End of 2010 2Q End of 2009 (Unit : Billion KRW) Changes Amount Ratio Asset Current Asset 2,627.9 2,496.1 131.8 5.3% Non-Current Asset 14,916.0 14,423.2 492.8 3.4% Total Asset 17,543.9 16,919.3 624.6 3.7% Liabilities Current Liabilities 5,729.5 4,614.9 1,114.6 24.2% Non-Current Liabilities 8,843.6 9,247.3 (403.7) -4.4% Total Liabilities 14,573.1 13,862.2 710.9 5.1% Total Shareholder s Equity 2,970.8 3,057.1 (86.3) -2.8% 3
Asset Composition (Unit : Billion KRW) 12,000 Increased 449.7 billion KRW 10,000 8,000 6,000 4,000 2,000 Increased 163.2 billion KRW End of 2010 2Q End of 2009 0 Quick Asset Inventories Investments Tangibles Non Tangibles Others Current Assets Non-Current Assets 4
Borrowings Currency End of 2010 2Q End of 2009 Changes Local Weight Local Weight Amount Ratio USD $ 5.22 bil 53.7% $ 5.03 bil 50.1% 0.19 bil 3.8% KRW 5,034.1 bil 42.8% 5,375.4 bil 45.9% -341.3 bil -6.4% JPY 23.8 bil 2.8% 27.8 bil 3.0% -4.0 bil -14.4% EUR 0.06 bil 0.7% 0.07 bil 1.0% -0.01 bil -14.3% Total (in USD) 9.72 bil 100% 9.87 bil 100% -0.15 bil -1.5% Applied USD/KRW FX rate : 1,210.30 (as end of 2010 2Q) 5
Borrowings (Changes YOY) Total borrowing amount decreased by 0.15 billon USD (Unit : Billion USD) 6 5.22 5 4 3 5.03 4.16 Decreased 341.3 billion KRW 4.44 End of 2010 2Q End of 2009 2 1 0 0.31 0.27 0.07 0.08 USD KRW JPY EUR 6
Summarized Income Statement (Unit : Billion KRW) 2010 2Q 2009 2Q Changes 2010 1H 2009 1H Changes Operating Revenue Operating Expense 2,836.4 2,074.5 36.7% 5,435.4 4,338.9 25.3% 2,484.3 2,201.8 12.8% 4,863.1 4,459.6 9.0% Operating Profit 352.1 (127.3) Turn to Profit 572.3 (120.7) Turn to Profit Non Operating Income/Expense Income Before Tax (650.4) 221.1 (637.4) (459.4) (298.3) 93.8 (65.1) (580.1) Net Income (233.1) 78.5 (61.5) (447.8) 7
Revenue Breakdown Posted an Operating revenue of 2,836.4 billion KRW in 2Q Increased 36.7% compared to the same period last year (Historically the highest figure) Total Revenue Cargo 36% Flight Operation Related 8% Other Businesses 4% Dom Passenger 5% Int l Passenger 47% Flight Operation Related In-flight Duty free 24% Mileage 25% Others 37% Other Businesses OAL Maintenance 10% Baggage 3% Agreement Operation 1% Catering 13% Aerospace 78% Hotel/ Limousine 9% 8
Operating Profit Passenger : Increased 25.8% (YOY) - Stable FX rate and resume of travel demand were the main drivers Cargo : Increased 86.4% (YOY) - Traffic increased due to economy recovery (Unit : Billion KRW) Passenger Increased 305 billion KRW(YOY) Cargo Increased 473 billion KRW(YOY) 109 (4%) 221 (8%) 1,020 (36%) 100 (5%) 1,486 (52%) 245 (12%) 547 (26%) 1,181 (57%) 2010 2Q : 2,836 bil KRW 2009 2Q : 2,075 bil KRW 9
Passenger Traffic Domestic Passenger International Passenger 2010 2Q 2009 2Q Changes 2010 2Q 2009 2Q Changes Supply(mil ASK) 1,105 1,126-1.9% 18,104 18,274-0.9% APR 372 369 0.8% 5,868 5,999-2.2% MAY 386 389-0.8% 6,226 6,214 0.2% JUN 347 368-5.7% 6,011 6,062-0.8% Traffic(mil RPK) 788 737 6.9% 13,858 12,123 14.3% APR 273 261 4.6% 4,419 3,956 11.7% MAY 284 262 8.4% 4,719 4,025 17.2% JUN 231 214 7.9% 4,719 4,141 14.0% L/F (%) 71.3% 65.5% 5.8%p 76.5% 66.3% 10.2%p YIELD (Cent) 15.6 13.0 20.1% 8.1 6.2 30.6% YIELD (KRW) 181.9 168.5 8.0% 94.3 80.7 16.9% 10
Passenger Traffic & Yield Changes Continuous traffic growth since 2009 2H Recorded 14,646 million RPK in 2010 2Q, (Historically the highest among all 2Qs) 16,000 15,000 Historically the highest traffic level in all 2 nd quarters 96.4 98.5 14,000 13,000 12,000 76.9 12,175 81.3 12,934 13,707 13,950 84.5 RPK(Mil) 87.1 12,860 14,646 11,000 Yield(KRW) 10,000 05 2Q 06 2Q 07 2Q 08 2Q 09 2Q 10 2Q 11
Passenger Revenue by Route Rapid traffic growth in short-haul routes due to recovery of leisure travel demand Visa waiver & base effect from previous year contributed in the traffic increase of long-haul routes (Unit : Billion KRW) 600 Route revenue increased %(YOY) is marked below 500 400 2010 2Q 2009 2Q 32.1% 300 200 15.4% 32.8% 50.0% 25.7% 37.3% 100 0 Dom Japan China SEA Americas Europe 12
Passenger Revenue by Region Sales Passenger revenue in 2Q increased 304.6 billion (+25.8% YOY) - Korea region sales increased 234.7 bil (+42%) - Overseas sales increased 69.9 bil (+11%) 2009 2Q (1,181.4 billion KRW) Europe 6% 2010 2Q (1,486.0 billion KRW) Europe 5% SEA 8% China 6% Americas 19% Japan 14% Korea 47% SEA 7% China 5% Americas 18% Japan 12% Korea 53% 13
Cargo Traffic 2010 2Q 2009 2Q Changes Supply (mil AFTK) 3,215 2,616 22.9% APR 1,037 860 20.6% MAY 1,111 895 24.1% JUN 1,067 861 23.9% Traffic (mil FTK) 2,503 1,983 26.2% APR 812 656 23.8% MAY 872 673 29.6% JUN 819 654 25.2% L/F (%) 77.9% 75.8% 2.1%p YIELD (Cent) 32.3 19.1 69.1% YIELD (KRW) 376.3 247.0 52.3% 14
Cargo Traffic & Yield Changes Continuous traffic growth since 2009 2H Recorded 2,503 million FTK, (Historically the highest level among all quarters) 2,600 Record high traffic level 376 2,500 2,400 2,300 2,200 2,100 2,000 1,900 1,800 251 249 2,121 1,996 2,441 305 2,503 247 226 2,348 FTK(Mil) 1,983 Yield(KRW) 05 2Q 06 2Q 07 2Q 08 2Q 09 2Q 10 2Q 15
Cargo Revenue by Route Leaded by IT products, Air Cargo traffic continues its growth 500 Route revenue increased %(YOY) is marked below (Unit : Billion KRW) 400 2010 2Q 2009 2Q Major Routes 94.2% 300 112.3% 200 100 0 71.1% 69.7% 93.4% 10.5% Dom Japan China SEA Americas Europe 16
Cargo Revenue by Region Sales Cargo 2Q revenue increased 472.8 billion (+86.4% YOY) - Korea region sales increased 224.9 billion (+134%) - Overseas sales increased 247.9 bil (+65%) 2009 2Q (547.4 billion KRW) Europe 9% Americas 12% SEA 13% China 27% Korea 31% Japan 8% 2010 2Q (1,020.2 billion KRW) Americas 8% SEA 13% China 25% Europe 7% Korea 38% Japan 9% 17
Key Expenses (Unit : Billion KRW) 2010 2Q 2009 2Q Changes Jet Fuel 865.0 665.3 30.0% Consumption Amt(Mil bbl) 7.72 7.17 7.7% Average Unit Price (USD) 93.2 64.7 44.1% Labor 361.3 336.4 7.4% No. of Employees 19,314 19,160 0.8% Rental 63.3 64.5-1.9% No. of Rented A/C (as end of 2Q) 27 25 8.0% Depreciation 192.5 178.3 8.0% No. of A/C (as end of 2Q) 107 103 3.9% 18
3,200 2,200 1,200 200-800 - 1,800 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% Operating Margin Ratio Operating Margin turned positive since 2009 3Q, and recorded 12.4% this quarter, which is historically the highest in all 2 nd quarters 7.5% 3.6% 1,514 754 11.9% 2,814 1,286 5.6% 0.9% 196-1,164-251 -4.7% -0.9% 0.8% 0.3% (Unit : Billion KRW) 07 1Q 07 2Q 07 3Q 07 4Q 08 1Q 08 2Q 08 3Q 08 4Q 09 1Q 09 2Q 09 3Q 09 4Q 10 1Q 10 2Q 19 226 Historically the highest in all 2 nd quarters 66-1,273 4% 1,001-6.1% 6% 1,540 8.5% 2,202 12.4% 3,521
Translation Gain/Loss & Interest Expense Large Translation loss due to KRW depreciation Interest Expense increased slightly (+0.7% YOY) (Unit : Billion KRW) 2010 2Q 2009 2Q Description Translation Loss/Gain (For the period of 1H) -209.5-65.4 2009 Dec 31 : 1,167.60 2010 Jun 30 : 1,210.30 ( 42.7 difference per 1$) Interest Expense (For the period of 2Q) 142.9 141.9 20
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