Bmi reports 48% decline in full-year profits for 2007
26 May 2008
Bmi, UK's second largest full service airline, has reported pre-tax profit of £15.5 million ($30.6 million) for 2007. This marks a 47.8% decline from the £29.7 million earned in the previous year. Revenue increased 12.9% to £1.02 billion, however, including £112.9 million attributable to the operations of BMED (British Mediterranean airways).
BMED was bought by bmi in January 2007 and integrated fully in November.
"Our underlying trading performance continues to be resilient against a background of difficult trading conditions throughout the aviation industry. The prospects for any significant immediate improvement remain unlikely, but we continue to invest for future growth and are well equipped to achieve it," chairman Michael Bishop commented.
Bmi, which includes the mainline, bmibaby and bmi regional, increased traffic year-on-year by 10.8% to 10.84 billion RPKs on a 17.9% hike in capacity to 16.08 billion ASKs. Overall load factor was down 4 points to 67.4%.
CEO Nigel Turner said the group's strategy remains unchanged, "which is to develop each of our three group airlines. Bmi mainline is now developing as a fully fledged network carrier and is beginning to realize the potential of its substantial slot holding at London Heathrow."
Bmi also decided to include the value of its LHR slot holdings on its balance sheet for the first time. "Following the Open Skies agreement between the US and the EU during 2007 there has been a significant increase in the number of slot trade transactions. This increase in slot trading has led the directors to conclude that the conditions now exist to include a value of £770 million on the balance sheet in respect of the London Heathrow slots operated by bmi," CFO Robert Palmer said.
As a result, net assets at year end were £800 million compared to £12 million a year earlier. Palmer said this is "a much better reflection on the net asset value of bmi."
Chairman Bishop holds a 50%-plus-one share in bmi, SAS 20% and Lufthansa 30%-minus-one share.
