Aeroflot's net profit for the year 2017 fell by 40%

The structure of demand for transportation was affected by competition.
Aeroflot significantly deteriorated its financial performance in 2017. According to IFRS, net profit fell by 40% to 23 billion rubles, while revenue grew insignificantly - by 7.5% to 533 billion rubles. The company explains the result obtained by changing the competitive situation in the market related to the return of foreign airlines to Russia and the opening of flights to Turkey.

The Aeroflot Group (includes Russia, Aurora and Pobeda) presented its financial results under IFRS for 2017. During the reporting period, the revenue of the carrier grew insignificantly - by 7.5% to 533 billion rubles, of which 427 billion rubles. brought regular flights.

But the group's profit fell by 40% to 23 billion rubles. The EBITDA decreased by 28.2% to 56 billion rubles.

Deputy Director for Commerce and Finance of the group Shamil Kurmashov explained that the financial results obtained in 2017 "reflect the normalization of the level of profitability." But the airline's work was influenced by a "number of market factors" that had already been reflected in the company's IFRS for 9 months. According to Mr. Kurmashov, the yield rates "were under the pressure of a changing competitive situation" - foreign airlines returned to the Russian market, the Turkish market opened. As a result, the structure of demand for transportation has changed.

Aeroflot also notes the growing cost of oil and the lagging dynamics of the exchange rate, which put pressure on fuel costs, which account for almost 25% of operating costs.

At the same time, Aeroflot noted a decrease in the total debt by 27.2% at the end of 2017 to 105 billion rubles. The reduction in Aeroflot's debt burden is related to the repayment of loans and loans, both planned and early, as well as revaluation of financial lease obligations due to the strengthening of the ruble against the US dollar at the end of 2017 compared to the end of 2016.