IAG cuts forecasts for medium-term growth in operating profits

IAG cut its medium and long-term forecasts for several of its key financial metrics at its Capital Markets Day.

The airline carrier lowered its projections for growth in average seat kilometre per year, between 2016 and 2020, from a range of between three to four per cent to three per cent.

As a result, operating profits were now seen rising more slowly over that same time horizon.

Earnings before interest, taxes, depreciation, amortisation and restructuring costs were now projected to reach roughly €5.3bn a year, down from €5.6bn a year previously.

In parallel, plans for capital expenditures going forward were also scaled back, from less than €2.5bn a year to €1.7bn, the company said in a statement ahead of its Capital Markets Day.

However, other key metrics were to be reaffirmed, including those for earnings per share growth, return on invested capital, operating margins, equity free csah flow and gearing.

The forecast annual rate of growth in EPS and its target for RoIC in real terms were kept at 12% and 15%, respectively.

Operating profit margins were still seen at between 12% to 15% with equity free cash flow coming in at a range of between €1.5bn to €2.5bn.

In a separate statement the company announced that it carried 3.9% more passengers during the month of October to reach 8.84m.

That came alongside a 3.1% rise in total revenues per passenger kilometre to 21.4m and a 5.0% increase in available seat kilometre to 26.1m.