Aeroflot Russian Airlines : announces Q1 2021 RAS financial results

30 April 2021

Moscow, 30 April 2021 - PJSC Aeroflot ('the Company', Moscow Exchange ticker: AFLT) today announces its financial results for the first quarter (Q1) ending 31 March 2021 in accordance with Russian Accounting Standards (RAS). RAS results are presented on a non-consolidated basis.

Key results in accordance with RAS, RUB million

Q1 2020	Q1 2021	Change
Revenue	100,867	58,873	(41.6%)
Cost of sales	(123,264)	(82,343)	(33.2%)
(Gross loss)	(22,398)	(23,470)	4.8%
(Net loss)	(16,139)	(24,902)	54.3%

Comments on Q1 2021 RAS financial results

• In Q1 2021 Aeroflot continued its operations remaining under serious pressure from COVID-19 pandemic, which, starting from March 2020, led to a significant reduction in traffic volumes: the number of flights in Q1 2021 decreased by 59.0% year-on-year, passenger turnover was 60.1% lower than in Q1 2020.
• Revenue for Q1 2021 was RUB 58,873 million, a decrease of 41.6% year-on-year. Continued recovery of international flights program due to increased frequency and resumption of flights to a number of destinations as well as expansion of domestic flights positively impacted revenue of the quarter. Revenue from cargo transportation segment increased by 50.0% year-on-year. The improvement in yield dynamics during the quarter was reinforced by an increase in Aeroflot's passenger load factor by 7.1 p.p., which had a positive impact on RASK dynamics.
• Cost of sales in Q1 2021 amounted to RUB 82,343 million, a decrease of 33.2% year-on-year. Significant negative impact (more than RUB 4.0 billion) stemmed from foreign exchange rates dynamics: the average US dollar to RUB exchange rate in Q1 2021 increased by 12.1% year-on-year, the euro to RUB exchange rate grew by 22.6% year-on-year. Large-scale cost optimization measures taken by the Company's management in 2020 and maintaining of conservative approach to cost management as well as continued negotiations on lease payments with our partners helped to reduce both fixed and variable costs.
• Controlling costs as traffic recovers helped to reduce variable costs based on volume of operations, notably a 54.9% year-on-year decrease in ground handling costs and 58.0% decrease in in-flight catering expenses were recorded in Q1 2021. Aircraft leasing costs remained at the 2020 level due to the appreciation of the US dollar. Due to the increased focus on passenger safety and countering the spread of coronavirus infection, the Company continued to perform additional procedures for pre-flight preparation, disinfection of aircraft, and supplying passengers with personal protective equipment.
• As a result of optimization measures, the Company achieved a total reduction of 21.2% in Q1 2021 SG&A year-on-year (including remuneration of management, general business, consulting, marketing expenses, as well as the costs of booking systems).
• Loss from sales amounted to RUB 30.4 billion in Q1 2021, which is 2.6% lower year-on-year due to a reduction in selling and administrative expenses.
• Results of other activities were significantly influenced by the need to acquire funds to support operations, which led to an increase in interest payable and receivable, as well as a decrease in other income on the back of lower volume of air transportation.
• Thanks to optimization initiatives and gradual capacity restoration based on demand and operational and financial efficiency in Q1 2021 Aeroflot was able to partially contain the negative impact of the crisis on financial results and keep the net loss at the level of RUB 24.9 billion, despite the fact that first quarter is traditionally the most difficult period of the year in seasonality terms (for comparison, net loss in the Q4 2020 amounted to RUB 31.0 billion).