IAG operating profit flies lower in third quarter

The FTSE 100 firm said the net foreign exchange operating profit impact for the quarter was an adverse €162m, while passenger unit revenue was down 13.7% and at constant currency down 5.9%.

Diluted earnings per share were up 18.3% before exceptional items and 23.8% after exceptional items.

The British Airways operator said non-fuel unit costs before exceptional items for the quarter were down 6.9%, and at constant currency up 1.4%.

Fuel unit costs before exceptional items for the quarter were down 25.8%, and down 22.7% at constant currency.

Its operating profit before exceptional items for the nine months stood at €1.92bn, up from €1.81bn or 6.1%.

The net foreign exchange operating profit impact on that was an adverse €372m.

IAG had cash of €6.19bn at period end, up €334m on the 2015 year-end.

Adjusted net debt to EBITDAR improved by 0.1 to 1.8x.

“We're reporting a strong third quarter operating profit before exceptional items,” said chief executive officer Willie Walsh.

“While strong, these results were affected by a tough operating environment with a very significant negative currency impact of €162m, primarily due to sterling weakness, and continued disruption due to air traffic control strikes.”

Walsh said despite that, its unit revenue performance was better than in the second quarter and the company’s quarterly profit after tax was €970m before exceptional items, an improvement of 9.9% on last year.

“We're pleased to announce an interim dividend payment of 11 euro cents per share, a 10% increase on last year.

“As in 2015, we expect the interim dividend to be around half the full year dividend.”