International Consolidated Airlines reported a near 19% rise in full-year operating profit on Friday, thanks to lower non-fuel costs, and increased capacity, while its strong cash position prompted the announcement of a share buyback.
Operating profit in 2017 rose by 18.9% to €3.02bn, as all the company's airlines reported their best-ever individual financial results.
The company, which operates four airlines - British Airways, Iberia, Aer Lingus and Vueling - reported a cash position of €6.67bn and announced it would return €500m to shareholders through a share buyback in addition to a 15% rise in its full-year dividend to 27 euro cents per share.
Full-year financial highlights
- Total revenue of €22.97bn up 1.8% on 2016
- Profit after tax rises 3.5% to €2.02bn
- Basic earnings per share up 3% to 95.8p
- Cash and interest-bearing deposits up 3.9% to €6.67bn
- Net debt down 4.9% to €7.76bn
- Seat factor up 1 basis point to 82.6%
At current fuel prices and exchange rates, IAG said it expected operating profit for 2018 to show an increase year-on-year. Both passenger unit revenue and non-fuel unit costs were expected to improve at constant currency.
Chief executive Willie Walsh (left) said: "All our airlines performed extremely well with their best-ever individual financial results, strong operational performances and commitment to customer service. The turnaround in Vueling, following the challenges of 2016, has been particularly outstanding.
"Our confidence in IAG’s future remains undaunted and today we’re announcing our intention to undertake a share buyback of €500m during 2018."
The buyback and dividend increase were not enough to tempt investors and by late-morning on the London Stock Exchange shares in the airline operator were down 4.75% to 593p.
Picture courtesy of IAG