Icelandair opens books to public to boost confidence

icelandair-logo-back-wingIcelandair Group has released an unscheduled, unaudited summary of its financial position. The move is intended to reassure investors ahead of the reopening of Iceland’s stock exchange later this week.

The company’s summary of the first eight months of the year shows what many would consider to be a surprisingly positive state of affairs.

The total turnover of the Icelandair Group is ISK 72 billion, an increase of 68 percent from the same time last year. Earnings before tax are up 43 percent on last year as well. The company’s cash position is ISK 6.7 billion.

“The operations of the companies within Icelandair Group have been solid this year. Revenue has increased substantially and profits improved despite tough external conditions. This shows the strength and flexibility of the company,” Bjorgolfur Johannsson, the CEO of Icelandair Group said.

The statement also draws attention to the fact that acquisitions of Icelandair Group’s foreign companies have not been financed with foreign loans.

Icelandair Group is an international Group of 12 companies with worldwide operations. Revenue is generated from different geographic areas and service sectors, and 25 percent of the Group’s revenue is in Icelandic kronur. The Group does business in many currencies, but the bulk of the turnover is in euro, Dollars and Czech koruna. “The weak exchange rate of the Icelandic krona has, overall, a positive effect on the exchange rates of Icelandair Group,” the statement said. “In addition, falling world fuel prices in the past weeks have a favourable effect on the operations of the Groups’ companies.”

The statement also points to a strengthening of Icelandair (Iceland’s biggest airline and the biggest company in Icelandair Group) due to a reduction in service earlier this year in response to spiralling fuel costs – which have subsequently fallen back considerably. The company’s large advertising campaign to encourage tourists to Iceland to take advantage of the cheap Icelandic krona is also expected to benefit the Group.

The second biggest company in the group is Travel Services in the Czech Republic. The statement says that Travel Services has done considerably better than expected in the first eight months of 2008.

Icelandair Group will publish Q3 Results on 18 November, 2008.

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