Aeroflot announces Q4 and 12M 2021 RAS financial results

02 February 2022

Moscow, 2 February 2022 – PJSC Aeroflot (the “Company”, Moscow Exchange ticker: AFLT) today announces its financial results for the fourth quarter (Q4) and twelve months (12M) of 2021 in accordance with Russian Accounting Standards (RAS). RAS results are presented on a non-consolidated basis.

Key results in accordance with RAS, RUB million

Indicator Q4 2020 Q4 2021 Change 12M 2020 12M 2021 Change
Revenue 52,816 102,641 94.3% 229,766 378,657 64.8%
Cost of sales 78,510 119,094 51.7% 331,734 414,313 24.9%
Gross income/(loss) (25,694) (16,453) (36.0)% (101,968) (35,656) (65.0)%
Net income/(loss) (30,972) (22,199) (28.3)% (96,527) (45,639) (52.7)%

Andrey Chikhanchin, PJSC Aeroflot’s Deputy CEO for Commerce and Finance, said:

"Despite the challenges related to the pandemic, Aeroflot was able to deliver improved results in 2021, with revenue rebounding and a significant reduction in the loss for the year. The Company has steadily improved its results year-on-year since the second quarter of 2021, leading to a reduction by more than half in the net loss for the full year.

"A significant driver of the improved financial result for 2021 was demand and the growth that it drove in domestic flight volumes, which the company focused on starting from the high season. For the full year 2021, Aeroflot Group passenger numbers on the domestic market were 15.3% higher than in 2019.[1] The gradual relaxation of restrictions in the international segment also had a positive impact on results, with capacity on these routes rising from 16% of pre-pandemic levels in January to 49% in December."

Comments on Q4 and 12M 2021 RAS financial results

  • Revenue in 12M 2021 totalled RUB 378,657 million, an increase of 64.8% year-on-year. Revenue for Q4 2021 totalled RUB 102,641 million, which is 94.3% higher than in Q4 2020 and represents about 79% of revenue for Q4 of 2019. Revenue was positively impacted by active growth of operational volumes on domestic routes, as well as the continued recovery of aviation in the international segment. Passenger revenue in the 12M 2021 increased by 76.3% compared to the 12M 2020. The improvement in RPK dynamics was supported by a 7.3 p.p. year-on-year increase in passenger load factor for 12M 2021, which had a positive effect on RASK.
  • Cost of sales for 12M 2021 amounted to RUB 414,313 million, increasing at a significantly slower pace than revenue of only 24.9% year-on-year. Large-scale cost optimisation measures launched in 2020, a conservative approach to costs and ongoing negotiations with counterparties on further restructuring of lease payments made it possible to constrain increases in cost of sales, even despite higher operational volumes in Q4 and continuing pressure on cost of sales due to the cost of jet fuel and exchange rate fluctuations.
  • Fuel costs in 12M 2021 increased by RUB 27.9 billion (58.9%) year-on-year, which was mainly (RUB 14.5 billion) due to an increase in the price of jet fuel (average price was up 38.9%, for Q4 2021 and 68.6% year-on-year). Aircraft leasing costs remained almost at the same level as 2020 due to strict discipline around fleet expansion, which is in line with expected demand dynamics. Labour costs in the 12M 2021 decreased by 5.1% year-on-year.
  • Gross loss for 12M 2021 declined nearly threefold year-on-year to RUB 35.7 billion thanks to strong revenue growth and cost controls.
  • As a result of optimisation measures in 12M 2021, the Company kept administrative costs flat year-on-year. Commercial expenses increased by 32.3% mainly due to an increase in booking systems costs amid a considerable rise in reservations caused by increased demand, and an active expansion of domestic flights and partial recovery of international flights. At the same time, the Company continues to constrain increases of other commercial expenses.
  • The Company is continuing to pay close attention to solvency. Aeroflot maintained a stable liquidity position throughout 2021, which remained high at the end of December (RUB 70.7 billion). Aeroflot's total debt as at 31 December 2021 was RUB 122.7, 85% of which is long-term loans and borrowings.
  • The financial results for 12M and Q4 2021 showed a significant improvement year-on-year. In Q4 2021, despite seasonal weakness in demand and unprecedented pressure from jet fuel costs, the Company was able to reduce its net loss by 28.3% on the back of strong domestic market activity and the continued recovery in the international sector. Including the net profit earned in Q3, the overall financial result for 2021 improved year-on-year by 2.1x.

[1] The change in operating results in 2021 compared with 2019 was calculated on the basis of the comparable structure of the Aeroflot Group - i.e. excluding Aurora Airlines’ performance in 2019.