Korean Air Lines 2010 4Q Results & 2011 Business Plan 27 Feb 2011
Disclaimer This presentation is for informational purposes only, contains preliminary financial and other information about Korean Air Lines Co., Ltd. and is subject to updating, revision, amendment and completion. This presentation does not and is not intended to constitute or contain any offer of securities for sale or a solicitation of an offer to purchase any securities of Korean Air Lines Co., Ltd. or any other company and neither this presentation nor anything contained herein shall form the basis of any contract or commitment. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements or trend information that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in the forward-looking statements in this presentation. In addition to statements which are forwardlooking by reason of context, including without limitation, statements referring to risk limitations, operational profitability, financial strength, performance targets, profitable growth opportunities, and risk adequate pricing, the words "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar expressions are intended to identify forward-looking statements. Korean Air Lines Co., Ltd. assumes no obligation to update or revise any such statements or any other information contained herein to reflect events or circumstances that may arise after the date of this presentation c 2
Summarized Balance Sheet Assets As End of 2010 As End of 2009 (Unit : billion KRW) Changes Amount Ratio Current Assets 2,726.4 2,496.1 230.3 9.2% Non Current Assets 15,181.3 14,423.2 758.1 5.3% Total Assets 17,907.7 16,919.3 988.4 5.8% Liabilities Current Liabilities 6,115.1 4,614.9 1,500.2 32.5% Non Current Liabilities 8,282.1 9,247.3 (965.2) -10.4% Total Liabilities 14,397.2 13,862.2 535.0 3.9% Total Shareholder s Equity 3,510.5 3,057.1 453.4 14.8% 3
Borrowings Currency As End of 2010 As end of 2009 Changes Local Weight Local Weight Amount Ratio USD $ 5.26 bil 52.8% $ 5.02 억불 50.1% 0.24 bil 4.8% KRW 4, 424.8 bil 39.0% 5,375.4 bil 45.9% -950.6 bil -17.7% JPY 61.6 bil 7.6% 27.8 bil 3.0% 33.8 bil 121.6% EUR 0.04 bil 0.6% 0.07 bil 1.0% -0.03 bil -42.9% Total (in USD) 9.96 bil 100% 10.17 bil 100% -0.21 bil -2.1% Applied USD/KRW FX rate : 1,138.9 (as end of FY2010) 4
Summarized Income Statement Operating Revenue Operating Expense Operating Profit Non Operating Income/Expense Income Before Tax 2010 4Q 2009 4Q Changes 2010 Full Year 2009 Full Year Changes 2,897.6 2,578.3 12.4% 11,459.2 9,393.7 22.0% 2,708.8 2,424.3 11.7% 10,340.0 9,260.3 11.7% 188.8 154.0 22.6% 1,119.2 133.4 739.0% (103.8) (54.6) (490.9) (258.8) 85.0 99.4-14.5% 628.3 (125.4) Net Income 69.6 84.9-18.0% 468.4 (98.9) (Unit : billion KRW) Turn to Profit Turn to Profit 5
Revenue Breakdown Posted an Operating Revenue of 2,897.6 billion KRW in 4Q Increased 12.4% compared to the same period last year Cargo 33.1% Flight Operation Related 0.3% Others 7.4% Int'l Passenger 50.5% Aerospace 3.3% Catering 0.6% Dom Passenger 4.4% Hotel & Limousine 0.4% 6
#, 330 #, 230 #, 130 #, 3 0 #, 7 0 #, 170 Operating Profit / Margin Operating Profit increased 22.6% while Operating margin increased 0.5% compared to last year 4Q (Unit : billion KRW) 11.9% 3,521 358.1 8.5% 12.4% 11.5% 7.5% 3.6% 151.4 75.4 281.4 5.6% 128.6 0.9% 0.8% 0.3% 19.6 6.6-0.9% 22.6-116.4-25.9-127.2 4% 100.1 6% 154.0 220.2 188.8 6.5% -4.7% 6.1% 07 1Q 07 2Q 07 3Q 07 4Q 08 1Q 08 2Q 08 3Q 08 4Q 09 1Q 09 2Q 09 3Q 09 4Q 10 1Q 10 2Q 10 3Q 10 4Q 7
Passenger Traffic Domestic Passenger International Passenger 2010 4Q 2009 4Q Changes 2010 4Q 2009 4Q Changes Supply (Mil ASK) 1,069 1,098-4.5% 19,054 18,746 1.6% Oct 376 379-0.8% 6,387 6,214 2.8% Nov 349 352-6.1% 6,196 6,119 1.3% Dec 344 367-1.1% 6,471 6,413 0.9% Traffic (Mil RPK) 665 647 7.3% 14,318 13,444 6.5% Oct 264 235 12.3% 5,084 4,405 15.4% Nov 219 208 3.4% 4,590 4,247 8.1% Dec 182 204-10.8% 4,644 4,792-3.1% L/F (%) 62.2% 58.9% 3.3%p 75.1% 71.7% 3.4%p YIELD (Cent) 16.7 15.7 6.4% 8.8 7.4 18.9% YIELD (KRW) 188.4 183.1 2.9% 99.7 86.2 15.7% 8
Passenger Traffic & Yield Changes Total passenger number increased 13% from last year 4Q China increased 29%, SEA increased 17% and Japan increased 12% in terms of route RPK RPK Load RPK Factor Load Factor Yield 6,000 85.0% 11 5,500 80.0% 10 5,000 75.0% 9 4,500 70.0% 8 4,000 65.0% 7 3,500 60.0% 6 3,000 55.0% 5 2,500 (Million) 50.0% 9 2002-01 2002-04 2002-07 2002-10 2003-01 2003-04 2003-07 2003-10 2004-01 2004-04 2004-07 2004-10 2005-01 2005-04 2005-07 2005-10 2006-01 2006-04 2006-07 2006-10 2007-01 2007-04 2007-07 2007-10 2008-01 2008-04 2008-07 2008-10 2009-01 2009-04 2009-07 2009-10 2010-01 2010-04 2010-07 2010-10
Passenger Revenue Breakdown by Route Passenger Revenue increased 229.6 billion KRW (16.9%) by YOY China and SEA revenue portion expanded from increased demand of short-haul routes by Korea outbound passengers 2009 4Q 2010 4Q Domestic 9.2% Domestic 8.1% Europe 15.3% Japan 15.3% Europe 14.6% Japan 15.6% Americas 31.8% China 8.4% Americas 31.5% China 9.9% Oceania 6.6% SEA 13.4% Oceania 5.8% SEA 14.5% 10
Passenger Revenue by Regional Sales Korea outbound passenger number increased 24% by YOY Korea inbound + Transit passenger number increased 6% by YOY 2009 4Q 2010 4Q Europe 7.0% Europe 6.3% Americas 17.7% Korea 44.3% Americas 18.2% Korea 47.5% SEA 8.5% SEA 7.8% China 5.7% Japan 16.8% China 6.2% Japan 14.0% 11
Cargo Traffic 2010 4Q 2009 4Q Changes Supply (Mil AFTK) 3,235 3,179 1.8% Oct 1,126 1,067 5.5% Nov 1,086 1,103-1.5% Dec 1,023 1,009 1.4% Traffic (Mil FTK) 2,449 2,408 1.7% Oct 850 809 5.1% Nov 806 825-2.3% Dec 793 774 2.5% L/F (%) 75.7% 75.8% -0.1%p YIELD (Cent) 31.9 30.5 4.6% YIELD (KRW) 360.7 356.9 1.1% 12
Cargo Traffic & Yield Changes Korea outbound - Auto parts and Machineries increased - where as Display related products and Semiconductors decreased Transit traffic increased 5% by YOY - SEA outbound (+17%) and Europe outbound (+11%) 900 35 FTK Load Factor FTK Load Factor Yield 800 30 700 25 600 20 500 15 400 (Million) 85.0% 80.0% 75.0% 70.0% 65.0% 60.0% 13 2002 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010
Cargo Revenue Breakdown by Route Cargo Korea revenue increased 18.2 billion KRW (1.9%) by YOY 2009 4Q 2010 4Q Europe 30.5% Domestic 0.7% Americas 43.6% Japan 4.0% China 10.0% SEA 10.1% Oceania 1.1% Europe 30.8% Domestic 0.8% Americas 40.7% Japan 5.1% China 9.4% SEA 12.0% Oceania 1.2% 14
Cargo Revenue by Regional Sales Revenue amount changes : - Korea (-7%), Japan (+23%), China (-17%), Americas (+27%), Europe (+37%) and SEA (+31%) 2009 4Q 2010 4Q Americas 6.8% Europe 7.4% Amercias 9.1% Europe 9.6% SEA 10.6% China 27.9% Korea 38.5% Japan 8.9% SEA 13.4% China 24.2% Korea 33.2% Japan 10.5% 15
Expense Breakdown 2009 4Q 영업수익 x억원 (2,424.2 billion KRW) 2010 4Q (2,708,8 billion KRW) Sales Commission 7.2% Maintenance 6.3% Airpot Related 9.9% Others 23.1% Depreciation 8.2% Jet Fuel 32.4% Labor 9.6% Rental 3.3% Sales Commission 4.7% Maintenance 6.5% Airport Related 9.0% Others 20.7% Depreciation 8.5% Rental 2.9% Jet Fuel 33.7% Labor 14.0% 16
Key Expenses (Unit : billion KRW) 2010 4Q 2009 4Q Changes Jet Fuel 911.8 785.2 16.1% Consumption Amt (Mil bbl) 8.03 7.71 4.2% Average unit Price (U$) 98.9 84.8 16.7% Labor 380.0 342.2 11.0% Employee No. 19,487 19,178 1.6% A/C Rental 62.0 64.8-4.3% Rented A/C No. (as end of 4Q) 26 26 0% A/C Depreciation 201.2 181.8 10.7% A/C No. (as end of 4Q) 109 105 3.8% Maintenance 174.7 141.7 23.3% 17
Non Operating Expenses Interest expense increased slightly (+1.9%) compared to last year 4Q (Unit : billion KRW) 2010 4Q 2009 4Q Description Translation and Transaction Gain(Loss) (25.3) 156.2 End of 2010 3Q : \1,142.00 End of 2010 4Q : \1,138.90 (\3.10 changed per 1$) Interest Expense 131.1 128.6 18
2011Business Plan and Key Assumptions Description Unit 2010 Average 2011 Fuel WTI USD/bbl 80 A 85 ti FX rate KRW/USD KRW 1,156 1,150 Interest Rate 3M Libor % 0.34 0.5 Op Revenue : 12.47 trillion KRW Op Expense : 11.19 trillion KRW Trillion KRW 13 8.8% increase Trillion KRW 1.3 1.2 14.4% increase Op Profit : 1.28 trillion KRW 12 K-IFRS applied figures 1.1 11 1 2010 2011 2010 2011 19
2011 Supply and Traffic Plan Description 2011 Plan YOY Supply (Mil Km) 85,643 7.7% Passenger Traffic (Mil Km) 65,547 8.3% L/F 76.5% 0.4%p Supply (Mil Km) 13,192 4.2% Billion Km 70 65 60 55 50 2010 2011 8.3% increase Cargo Traffic (Mil Km) 10,032 3.8% L/F 76.0% -0.3%p Billion Km 10.5 10 3.8% increase 9.5 9 2010 2011 20
2011 CAPEX and Fleet Utilization Plan (Unit : billion KRW) Description 2010 (Asumptions) 2011 Changes A/C 1,638.2 2,112.5 29% Project 89.2 186.3 109% Others / IT 26.6 30.0 13% Total 1,754.0 2,328.8 33% Billon KRW 2500 2000 1500 1000 500 0 2010 2011 Description Operating A/C No. (as End of the Year) 2010 2011 Changes PAX 104 114 10 added CGO 24 25 1 added Total 128 139 11 added Monthly Average 374 379 1.3% Utilization Hour * Wet Lease fleet are excluded (5 in operation as end of 2010) Hrs 380 375 370 365 360 2010 2011 21
Fleet Status Fleet Type Current Status (as 2010 Year End) Delivery Plan for 2011 A380 0 5 A330 21 2 A300 8 - B747 18 - B777 28 3 B787 0 Unconfirmed B737 30 6 Passenger TTL 105 16 B747F 24 2 Cargo TTL 24 2 Total 129 18 Fleet rented out to Jin Air and Uzbekistan Airways are excluded from the chart 22
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