Croatia Airlines Loss Increased by Nearly 400 Million Kuna

Croatia Airlines ended the year 2012 with a loss of 475.1 million kuna, which is a multiple increase compared to 2011 when the loss amounted to 75.5 million kuna.

This was primarily influenced by one-time items related to the restructuring of the company, according to data from the preliminary financial report of Croatia Airlines published on the Zagreb Stock Exchange.

Total revenues of Croatia Airlines last year amounted to 1.76 billion kuna, an increase of 0.7 percent compared to 2011, while total expenses rose by 22.5 percent to 2.24 billion kuna.

The management notes in the report that compared to 2011, the net loss was actually reduced by 14 percent, amounting to 64.7 million kuna, and emphasizes that high one-time items related to restructuring had a significant impact on the overall business results.

This includes an expense for the impairment of fixed assets and expenses from interest for state guarantees and restructuring costs, totaling 410.3 million kuna.

The expense for the impairment of fixed assets relates to the adjustment of the value of Croatia Airlines’ aircraft. The company engaged independent appraisers who conducted a valuation as of November 30, 2012, and the result of the assessment was a decrease in the value of the fleet, which reflected in a net result of 298.9 million kuna.

Interest expenses amounting to 70.5 million kuna include interest from realized guarantees for paid annuities under the Bayerische Landesbank loan for fleet financing by the state, while restructuring costs amount to 40.9 million kuna, with the most significant part relating to provisions for employee severance payments.

According to the report, during the past year, the number of passengers of Croatia Airlines increased by four percent compared to 2011, with 1,951,501 passengers transported.

Sales increased by 10 percent, with sales in Croatia declining and increasing abroad. The largest sales increase was recorded in Australia with a growth of 65 percent, or 41.8 million kuna, and in France with a growth of 36 percent, or 20.6 million kuna.

Sales by other carriers on Croatia Airlines flights increased by 7 percent or 17 million kuna, and online and telephone sales significantly increased by 28 percent, the report states.

During the past year, the passenger cabin occupancy of Croatia Airlines’ aircraft was 69.1 percent, the highest in the company’s history, it adds.