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LAN Airlines Reports Net Income of US$335.7 Million for Full Year 2008 and US$117.1 Million for the Fourth Quarter of 2008
Posted by: gurufocus (IP Logged)
Date: January 27, 2009 06:05PM

SANTIAGO, Chile--(BUSINESS WIRE)--LAN Airlines S.A. (NYSE: LFL), one of Latin America’s leading passenger and cargo airlines, announced today its consolidated financial results for the fourth quarter ended Press Release: LAN Airlines Reports Net Income of US$335.7 Million for Full Year 2008 and US$117.1 Million for the Fourth Quarter of 2008

SANTIAGO, Chile--(BUSINESS WIRE)--LAN Airlines S.A. (NYSE: LFL), one of Latin America’s leading passenger and cargo airlines, announced today its consolidated financial results for the fourth quarter ended December 31, 2008. “LAN” or “the Company” makes reference to the consolidated entity, which includes passenger and cargo airlines in Latin America. All figures were prepared in accordance with generally accepted accounting principles in Chile and are expressed in U.S. Dollars

HIGHLIGHTS

  • LAN reported net income of US$117.1 million for the fourth quarter 2008. This represents a 16.1% increase compared to net income of US$100.8 million in the fourth quarter 2007. For full year 2008, LAN reported net income of US$335.7 million, an 8.9% increase compared to full year 2007.
  • LAN reported significant growth in operating income in the fourth quarter 2008, reaching US$232.3 million, a 76.2% increase compared to operating income of US$131.9 million recorded in the fourth quarter 2007. Operating margin improved by 7.1 points reaching 19.7%, historical levels for the Company. Solid results this quarter were driven by strong operating performance, especially in the passenger business, as well as a significant decline in fuel prices during the quarter.
  • The Company reported operating income of US$536.2 million for full year 2008, a 29.7% increase as compared to operating income of US$413.4 million in 2007. Operating margin for 2008 reached 11.8%, an increase of 0.1 point as compared to the 11.7% operating margin achieved in 2007.
  • Total revenues for the fourth quarter 2008 reached US$1,179.3 million compared to US$1,046.1 million in the fourth quarter 2007, due to a 21.5% increase in passenger revenues and a 4.1% increase in cargo revenues. Passenger and cargo revenues accounted for 66% and 31% of total revenues, respectively during the fourth quarter 2008.
  • On January 21, 2009 LAN CARGO announced that it reached a plea agreement with the Department of Justice of the United States (“DOJ”) in relation to the DOJ’s ongoing investigation regarding price fixing of fuel surcharges and other fees for cargo shipments. This investigation reportedly involves more than 30 international airlines operating in the air freight business. As previously informed, under the plea agreement, LAN CARGO agreed to pay a fine of US$88 million. In addition, the air freight company Aerolinhas Brasileiras S.A. (ABSA), in which LAN CARGO has an ownership stake, also reached a plea agreement with the DOJ for a fine of US$ 21 million. The Company has decided to maintain a US$25 million reserve as a precautionary estimate as per accounting policies for future losses in connection with the ongoing European Commission investigation.
  • Continuing with the expansion and renewal of its fleet, during the fourth quarter 2008 LAN received six new passenger aircraft: two new Boeing 767-300 passenger aircraft, two new Airbus A318 passenger aircraft and two new Airbus A319 passenger aircraft. In addition, in November 2008 LAN placed an order for four new Boeing 767-300ER passenger aircraft to be delivered during the first half of 2012.
  • On December 22, 2008, LAN Ecuador received authorization to operate domestic routes within Ecuador. LAN Ecuador expects to initiate flights in the domestic market at the end of March 2009, operating modern A320 family aircraft. In this way, LAN Ecuador reaffirms its commitment to the country, contributing to tourism and the economic and social development of Ecuador, improving connectivity and broadening the Company’s network of destinations within the region.
  • During the quarter, LAN continued to receive international recognition. In December 2008, LAN’s business class was awarded recognition as the best business class in South America by Business Traveler magazine. This is the third year that LAN receives such award from this leading global publication.

About LAN

LAN Airlines is one of the leading passenger airlines in Latin America. The company and its affiliates serve more than 60 destinations around the world through an extensive network that offers full connectivity within Latin America, while also linking the region with North America, Europe and the South Pacific, as well as 58 additional international destinations through its various alliances. LAN Airlines and its affiliates have a leading position in their respective domestic markets of Chile and Peru as well as an important presence in the Argentinean domestic market.

Currently, LAN Airlines and its affiliates operate one of the most modern fleets in the world, with 81 passenger aircraft, and its cargo subsidiary, LAN CARGO and its respective cargo affiliates, operate 9 dedicated freighters. The company recently completed its short haul fleet renovation process by acquiring new aircraft from the Airbus A320 family, enabling LAN to improve its efficiency and to reduce significantly its CO2 emissions. The fleet renovation is part of the company’s commitment to the protection of the environment.

LAN is one of the few Investment Grade airlines in the world (BBB). The company’s world class quality standards enabled its membership in oneworld™, the global alliance that encompasses the best airlines in the world. For more information please visit www.lan.com or www.oneworldalliance.com.

Note on Forward-Looking Statements

This report contains forward-looking statements. Such statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” or other similar expressions. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. These factors and uncertainties include in particular those described in the documents we have filed with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them, whether in light of new information, future events or otherwise.

Source: BusinessWire


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