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Norwegian achieves highest operating profit in its history

Norwegian has closed 2023 with an operating profit (EBIT) of 2,232 million Norwegian crowns (€196.46 M), the highest operating result in the company’s history. During the last quarter of the year, the Norwegian low cost significantly improved its liquidity position, reaching 9.5 billion crowns (€836.19 million) by the end of the year. The company also highlights that it remained among the best airlines in Europe in terms of punctuality and regularity.

With this very positive operating result, the airline achieved an operating margin for the entire year 2023 of 9%, also a record for the company.

For the fourth quarter of 2023, Norwegian reported an operating profit (EBIT) of 328 million Norwegian crowns (€28.87 million). Profit before taxes (EBT) for the full year amounted to 1,804 million Norwegian crowns (€158.79 M),k while in the last quarter it reached 208 million Norwegian crowns (€18.31 M).

Norwegian operated a fleet during the period of 87 aircraft, of which 20 are state-of-the-art 737 MAX 8 aircraft.

Geir Karlsen, CEO of Norwegian, said: “Norwegian achieved record profits in 2023. Our loyal customer base continued to grow and we are grateful for the trust they place in us. Colleagues from across the company have worked hard to ensure operational excellence, from the planning of our network and services to their daily execution.”

Higher occupancy

Norwegian transported 4.7 million passengers in the fourth quarter, compared to 4.6 million in the same quarter of 2022. Scheduled capacity, measured in seat kilometers offered (AKO), was 7.1 billion, while traffic of passengers, measured in passengers/kilometer transported (PKT) was 6,000 million.

Compared to the third quarter of 2023, capacity decreased by 32% as the company reduced its production to meet lower seasonal demand during the winter season. The average quarterly occupancy was 84.4%, three percentage points more than in the same period of the previous year.

Punctuality was 81.5%, compared to 82.3% in the same period last year, although it fell in December due to winter weather conditions that affected operational performance at key airports. Cirium, the global aviation consultancy, recognized Norwegian Air Shuttle as Europe’s most punctual airline in October and the fifth most punctual airline by 2023. It also ranked the airline as Europe’s best performer for regularity (i.e. , proportion of flights actually operated out of all those scheduled).

Acquisition of Widerøe

In January, Norwegian completed the acquisition of Widerøe, a Norwegian regional airline with a fleet of 48 aircraft, predominantly turboprops. The acquisition of Widerøe will link complementary route networks, create significant operational synergies and provide Norwegian with additional diversification through Widerøe’s significant public service obligation (PSO) operations.

Dividends and outlook 2024

The Board of Directors intends to propose, at the 2024 General Shareholders’ Meeting, a dividend of 0.60 crowns (0.053 euros) per share charged to the 2023 financial year. The distribution of said dividend is subject to the approval of the holders of the company’s debt instruments. If such approval is not obtained, the Board proposes to deposit the dividend amount in a fund for subsequent distribution.

Current booking trends are encouraging and the duration of the booking curve has improved compared to the previous two years, providing greater visibility. For the full year 2024, Norwegian forecasts total production (measured in ASK) of around 36 billion seat kilometers, corresponding to growth of approximately 12 percent compared to 2023. The company anticipates that profits for 2024 improve and currently expects an operating profit (EBIT) that will be in the range of 2,500 to 3,200 million crowns (220 to 282 million euros), if certain assumptions are met.

Norwegian customers highly value the airline’s high punctuality and attractive and growing route network. The acquisition of Widerøe will further ensure that Norwegian remains a preferred travel option in the Nordic countries.

For the remainder of the winter season, Norwegian will maintain a reduced capacity level tailored to lower seasonal demand. Starting in March, the company will increase its capacity during the peak travel season. The company is increasing its fleet to approximately 90 aircraft by the peak summer season of 2024 and forecasts production growth of approximately 12 percent for the full year.

Source: Hosteltur

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