Finnair Annual Report 1997/1998
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ANNUAL REPORT 1997/1998 ANNUAL REPORT 1997/1998 74th financial year CONTENTS INFORMATION TO SHAREHOLDERS Information to shareholders 2 Annual General Meeting Highlights 3 The Annual General Meeting of Finnair Oyj Information on Finnair Oyj shares will convene on August 20, 1998 at 3.00 p.m. and shareholders 4 in the Hotel Inter-Continental Helsinki, Shares and share capital 4 Mannerheimintie 46-48, Helsinki. Share quotations 4 Shareholders desiring to attend must be Payment of dividend 4 registered with the Finnish Central Securities Government ownership 4 Depository Ltd. by August 14, 1998. Convertible bonds 4 Shareholders whose shares have not been Share ownership by management 5 transferred to the book-entry securities system Share prices and trading 5 may also attend the AGM on condition that such Stock analysis 5 shareholders were registered in the Company´s Administrative bodies 6 shareholder register before 11 June, 1993. Review by the Chief Executive Officer 7 In such a case, shareholders must at the AGM FINANCIAL STATEMENTS present their share certificates or other evidence April 1,1997 to March 31,1998 that their shareholding rights have not been Report on operations transferred to the book-entry system. by the Board of Directors 8 Shareholders wishing to attend the AGM The market situation 8 must notify the Company by 17 August, 1998. Financial results 8 Dividend proposal Capital expenditure 9 The Board of Directors of Finnair Oyj proposes Financing 10 to the Annual General Meeting that shareholders Share capital and shares 10 be paid a dividend for the 1997/98 financial year Changes in the administration 10 of FIM 1.75 per share. Personnel and salaries 10 The Board of Directors proposes that Environment 10 the dividend be paid on August 28, 1998 Outlook for the 1998/99 financial year 11 to those shareholders who were registered Financial statement principles 12 on the record, August 25, 1998. Items denominated in foreign exchange 12 Financial Information Derivative agreements 12 The Annual Report is published in August Turnover 12 and is available in Finnish and English. Fixed assets and depreciation 12 During the financial year 1998/99, Finnair Oyj Inventories 13 will publish one interim report for the period Current assets 13 April 1- September 30, 1998, and it will be Leasing 13 released on November 27, 1998. Expenditure on research These reports can be ordered from Finnair Oyj, and development 13 telephone +358 (9) 818 4951, Taxes and the change fax +358 (9) 818 4092, in imputed tax liability 13 e-mail: investor.relations.finnair.fi Pension schemes 13 Finnair’s annual reports and interim reports, Consolidated profit and loss statement 14 as well as other financial information Consolidated balance sheet 15 and press releases can be accessed through Consolidated cash flow statement 16 Internet: www.finnair.fi Finnair Oyj profit and loss statement 17 Addresses Finnair Oyj balance sheet 18 For further information about Finnair Group, Finnair Oyj cash flow statement 19 please contact: Notes to the financial statements 20 Finnair Head Office Proposal by the Board of Directors Tietotie 11 A, FIN-01053 Finnair concerning disposal of the profit 28 telephone + 358 (9) 818 81 Auditors´ Report 29 Mail address Statement of the Supervisory Board 30 Finnair REVIEW OF FINNAIR GROUP SECTORS 31 P.O.Box 15, FIN-01053, Finnair, Finland Flight operations 31 Corporate Communications Fleet 32 Usko Määttä, Director Travel agencies 32 telephone +358 (9) 818 4970 Tour operations 35 fax +358 (9) 818 4098 Other sectors 37 Investor Relations Key figures 40 Subsidiaries 42 Petri Pentti, Vice President Finnair Group air transport 43 telephone +358 (9) 818 4950 Finnair’s 75th Anniversary November 1,1998 44 fax +358(9) 818 4092 IRONME V NT Addresses 47 N A E L IC L D A B R E Recyclable product O L N with lower emission during production. 441 002 Printed by Oy Edita Ab Printed matter August 1998, Helsinki , Finland 2 HIGHLIGHTS Turnover FIM mill. 8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 93/94 94/95 95/9696/97 97/98 Turnover by sector Flight operations 80 % Other FINNAIR GROUP 1997/1998 1996/1997 Change % sectors 2 % Passengers 1 000 7 067 6 280 12.5 Travel agencies and Tour operations 18 % Cargo and mail 1 000 kg 76 730 66 668 15.1 Revenue tonne km mill. 1 428 1 254 13.9 Operating profit FIM mill. Turnover FIM mill. 8 057.6 7 403.2 8.8 Operating profit % of turnover % 700 14 Turnover by sector Flight operations FIM mill. 7 030.3 6 491.2 8.3 600 12 Travel agencies FIM mill. 349.9 292.0 19.8 500 10 Tour operations FIM mill. 1 203.6 1 050.8 14.5 400 8 Other sectors FIM mill. 194.7 314.8 - 38.2 - Less internal adjustments FIM mill. - 720.9 - 745.6 - 3.3 300 6 200 4 Operating margin FIM mill. 1 107.5 783.6 41.3 100 2 Operating margin of turnover % 13.7 10.6 0 0 Operating profit FIM mill. 605.0 326.1 85.5 93/94 94/95 95/9696/97 97/98 Operating profit of turnover % 7.5 4.4 Profit before extraordinary items and taxes FIM mill. 626.7 310.4 101.9 Profit before Profit for the financial year FIM mill. 509.7 322.8 57.9 extraordinary items and taxes FIM mill. 700 Earnings/share FIM 6.11 2.48 Equity/share FIM 39.31 34.43 600 Share price on March 31 FIM 54.00 36.90 500 400 Gross capital expenditure FIM mill. 878.6 1 055.1 Interest bearing liabilities FIM mill. 1 297.0 1 602.0 300 Equity FIM 3 254.6 2 825.2 200 Equity ratio % 46.5 42.9 100 Net debt-to-equity (Gearing) % - 5.4 9.9 0 93/94 94/95 95/9696/97 97/98 Personnel on average persons 10 706 10 533 1.6 (USD 1 = FIM 5.6) 3 INFORMATION ON FINNAIR OYJ SHARES AND SHAREHOLDERS SHARES AND SHARE CAPITAL Finnair Oyj On March 31, 1998, the Company’s paid up share shareholders as capital, entered in the trade register, was FIM at March 31, 1998 413,982,415 and comprised 82,796,483 shares. Shareholder Number of shares % of shares Each share has one vote at the Annual General Goverment of Finland 49 510 682 59.80 Meeting and its nominal value is FIM 5. Sampo Group 2 799 697 3.38 The minimum and maximum values of Finnair Pension Insurance Oyj’s share capital are FIM 300 million and FIM Company Ilmarinen Ltd 2 235 000 2.70 1,200 million, within the limits of which the share Pohjola Group 1 723 000 2.08 capital can be raised or lowered without amen- Neste Group 1 097 620 1.33 ding the Articles of Association. The Company’s shares were converted to the book entry securities The Local Government Pensions Institute 1 005 900 1,21 system in June 1993. Tapiola Incurance Company Ltd 549 400 0.66 SHARE QUOTATIONS Pension-Varma 531 700 0.64 Finnair Oyj’s shares are quoted on the Helsinki Stock Merita Fennia Mutual Fund 261 800 0.32 Exchange. Since January 1995, they have also been Finnish National Fund for traded in the SEAQ (Stock Exchange Automatic Research and Development 225 000 0.27 Quotation) system on the London Stock Exchange. Registered in the name PAYMENT OF DIVIDEND of a nominee total 17 814 124 21.52 The Board of Directors of Finnair Oyj proposes to Other, total 5 042 560 6.10 the Annual General Meeting that a dividend of FIM Total 82 796 483 100.00 1.75 per share, or a total of FIM 144,893,845.25 be paid for the 1997/98 financial year. Division of Finnair Oyj GOVERNMENT OWNERSHIP share ownership as Return on investment % At the end of the financial year on March 31, 1998, the at March 31, 1998 16 Finnish Government owned 59.8 % of the Company’s Shares Shareholders Number % of 14 shares and votes. On June 20, 1994, Parliament held of shares shares decided to maintain the Government’s majority hol- 12 1-100 3 858 180 740 0.22 ding and gave its consent to reduce that holding to 101-1 000 2 296 730 499 0.88 10 less than two-thirds. Should all the convertible bonds 1 001-10 000 342 897 558 1.08 8 in circulation be exchanged for Finnair Oyj shares, the Government’s holding would be 57.5%. 10 001-100 000 72 2 489 991 3.01 6 100 001-1 000 000 19 5 688 496 6.87 4 CONVERTIBLE BONDS 1 000 001- 5 54 949 202 66.37 Finnair Oyj has issued two convertible bonds. In 2 Registered in the name February 1992 the Company Board of Directors of a nominee 7 17 814 124 21.52 0 issued a convertible bond for FIM 150 million on the 93/94 94/95 95/9696/97 97/98 Book entries, not converted 45 873 0.06 basis of the authorization it had received at the Total 6 599 82 796 483 100.00 Annual General Meeting in August 1991. The bond Return on equity in question will mature in 1999. They can be con- % 25 verted to Company shares as follows: a bond with a Finnair Oyj nominal value of FIM 1,000 entitles the holder to 54.4 shareholders by type as 20 Finnair Oyj shares with a nominal value of FIM 5 at March 31, 1998 each.