RJ posts JD22.9 million net profit in the 3rd quarter 2018

Pichler: Q3 positive results increased the net profit of the first nine months by 87%, bringing it to JD10.2 million

“Despite 32% increased fuel cost, we are on the road to profitability with a 6% improved seat load factor”

Amman, Oct. 31, 2018 -- The Royal Jordanian Board of Directors approved the financial results for the third quarter and the first nine months of this year during its session held on October 29, 2018. The meeting was chaired by Said Darwazeh, in the presence of RJ President/CEO Stefan Pichler.

The company's financial results have shown that in the third quarter of this year it achieved a net profit, after tax, of JD22.9 million, compared to JD31.8 million for the comparison period of 2017, a decline of 28% attributed to the significant increase in fuel prices. The fuel bill paid by the company between July and September of this year went up 43%, reaching JD47.3 million; during the same months last year the cost reached JD33 million.

The airline revenues in the third quarter increased by 2%, to JD198 million, against JD194 million for the comparison period of 2017, while operating costs increased by 9%, from JD140 million in the third quarter of last year to JD153 million for the same period this year. As a result, the gross profit recorded by the company in this period declined 16%, from JD53.8 million in the third quarter of 2017 to JD45 million in the same period of 2018.

Commenting on the financial and operating results of the company, President/CEO Stefan Pichler said: “The total number of passengers carried on board RJ increased by 7% in the third quarter of this year, bringing the seat load factor from 75% in the third quarter of 2017 to 77% in the same period of this year, a 2% increase."

He said that the increase in the number of passengers and the seat load factor in the third quarter of 2018 led to better operating and financial results for the first nine months of this year; the number of passengers grew by 4% and the seat load factor grew by 6%, increasing from 71% in the first nine months of 2017 to 74% in the corresponding period of 2018. Accordingly, the company recorded JD10.2 million net profit after tax, an 87% growth compared to the JD5.4 million in the first nine months of 2017.

Pichler added: “Royal Jordanian has dealt with the huge rise in fuel prices during the current year by increasing the number of passengers and the seat load factor on all its route network by offering continuous sales promos, which contributed to increased demand all year round from travelers who care to invest in the attractive fares and are now planning their journeys early.”

He said that the paid fuel bill in the first nine months of this year increased by 32% over 2017; it amounted to JD122 million in 2018, compared to JD92 million paid in 2017. Therefore, the operating costs of the company grew from JD406 million in the first nine months of 2017 to JD430 million this year, a 6% growth.

He said that the company's operating revenues increased from JD472 million in the first nine months of 2017 to JD510 million in the comparison period of 2018, an 8% growth rate; it recorded a 22% higher gross profit, which increased from JD65.7 million in the first nine months of 2017 to JD80 million in the same period this year.

In terms of air cargo, Pichler said the sector is also witnessing positive operating and financial results.

“The uplifted cargo carried by the company increased by 16% in the third quarter of this year and as a result, cargo revenues increased by 10%. In the first nine months of this year the uplifted cargo increased by 14% and the cargo revenue by 12% over to the same period of 2017.

Pichler stressed that the airline’s turnaround plan, launched in the last quarter of 2017, is being followed and has been successfully achieving the set goals. The plan is based on four main pillars, which aim at making RJ the No. 1 airline in the Levant, achieving sustainable profitability, being a customer champion by delivering a consistently superlative customer experience, and being the employer of choice by attracting and investing in talented workforce.