2010 2Q Results
2010. 8. 13
Korean Airlines
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Disclaimer
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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 forward-
looking 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
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Summarized Balance Sheet
(Unit : Billion KRW)
End of
2010 2Q
End of
2009
Changes
Amount Ratio
Asset
Current Asset 2,627.9 2,496.1 131.8 5.3%
Non-Current Asset 14,916.0 14,423.2 492.8 3.4%
Total Asset 17,543.9 16,919.3 624.6 3.7%
Liabilities
Current Liabilities 5,729.5 4,614.9 1,114.6 24.2%
Non-Current Liabilities 8,843.6 9,247.3 (403.7) -4.4%
Total Liabilities 14,573.1 13,862.2 710.9 5.1%
Total Shareholder’s Equity 2,970.8 3,057.1 (86.3) -2.8%
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Asset Composition
0
2,000
4,000
6,000
8,000
10,000
12,000
Quick
Asset
Inventories Investments Tangibles Non
Tangibles
Others
End of 2010 2Q
End of 2009
(Unit : Billion KRW)
Increased
163.2 billion KRW
Increased
449.7 billion KRW
Current Assets Non-Current Assets
Borrowings
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Currency
End of
2010 2Q
End of
2009Changes
Local Weight Local Weight Amount Ratio
USD $ 5.22 bil 53.7% $ 5.03 bil 50.1% 0.19 bil 3.8%
KRW ₩ 5,034.1 bil 42.8% ₩5,375.4 bil 45.9% -341.3 bil -6.4%
JPY ¥ 23.8 bil 2.8% ¥ 27.8 bil 3.0% -4.0 bil -14.4%
EUR € 0.06 bil 0.7% € 0.07 bil 1.0% -0.01 bil -14.3%
Total
(in USD)9.72 bil 100% 9.87 bil 100% -0.15 bil -1.5%
※ Applied USD/KRW FX rate : ₩1,210.30 (as end of 2010 2Q)
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Borrowings (Changes YOY)
0
1
2
3
4
5
6
USD KRW JPY EUR
5.22
4.16
0.27 0.07
5.03
4.44
0.310.08
End of 2010 2Q
End of 2009
(Unit : Billion USD)Decreased
341.3 billion KRW
■ Total borrowing amount decreased by 0.15 billon USD
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Summarized Income Statement
2010
2Q
2009
2QChanges
2010
1H
2009
1HChanges
Operating
Revenue2,836.4 2,074.5 36.7% 5,435.4 4,338.9 25.3%
Operating
Expense2,484.3 2,201.8 12.8% 4,863.1 4,459.6 9.0%
Operating
Profit352.1 (127.3)
Turn to
Profit572.3 (120.7)
Turn to
Profit
Non Operating
Income/Expense(650.4) 221.1 (637.4) (459.4)
Income
Before Tax(298.3) 93.8 (65.1) (580.1)
Net Income (233.1) 78.5 (61.5) (447.8)
(Unit : Billion KRW)
Aerospace78%
Catering13%
Hotel/Limousine
9%
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Revenue Breakdown
■ Posted an Operating revenue of 2,836.4 billion KRW in 2Q
■ Increased 36.7% compared to the same period last year (Historically the highest figure)
Dom Passenger
5%
Int’l Passenger
47%
Cargo36%
Flight Operation
Related8%
OtherBusinesses
4%
Total Revenue Flight Operation Related
Other Businesses
In-flight Duty free
24%
Mileage25%
OAL Maintenance
10%
Baggage3%
Agreement Operation
1%
Others37%
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Operating Profit
■ Passenger : Increased 25.8% (YOY)
■ Cargo : Increased 86.4% (YOY)
- Stable FX rate and resume of travel demand were the main drivers
- Traffic increased due to economy recovery
109
(4%) 100
(5%)
221
(8%)
245
(12%)
1,020
(36%)
547
(26%)
1,486
(52%) 1,181
(57%)
(Unit : Billion KRW)
2009 2Q : 2,075 bil KRW2010 2Q : 2,836 bil KRW
Passenger
Increased
305 billion
KRW(YOY)
Cargo
Increased
473 billion
KRW(YOY)
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Changes Changes
Supply(mil ASK) 1,105 1,126 -1.9% 18,104 18,274 -0.9%
APR 372 369 0.8% 5,868 5,999 -2.2%
MAY 386 389 -0.8% 6,226 6,214 0.2%
JUN 347 368 -5.7% 6,011 6,062 -0.8%
Traffic(mil RPK) 788 737 6.9% 13,858 12,123 14.3%
APR 273 261 4.6% 4,419 3,956 11.7%
MAY 284 262 8.4% 4,719 4,025 17.2%
JUN 231 214 7.9% 4,719 4,141 14.0%
L/F (%) 71.3% 65.5% 5.8%p 76.5% 66.3% 10.2%p
YIELD (Cent) 15.6 13.0 20.1% 8.1 6.2 30.6%
YIELD (KRW) 181.9 168.5 8.0% 94.3 80.7 16.9%
2010 2Q 2009 2Q
Domestic Passenger
2010 2Q 2009 2Q
International Passenger
Passenger Traffic
12,175
12,934
13,707
13,950
12,860
14,646
76.9
81.3
84.5
96.4
87.1
98.5
10,000
11,000
12,000
13,000
14,000
15,000
16,000
05 2Q 06 2Q 07 2Q 08 2Q 09 2Q 10 2Q
RPK(Mil)
Yield(KRW)
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Passenger Traffic & Yield Changes
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Historically the highest
traffic level in all 2nd quarters
■ Continuous traffic growth since 2009 2H
■ Recorded 14,646 million RPK in 2010 2Q, (Historically the highest among all 2Qs)
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Passenger Revenue by Route
■ Rapid traffic growth in short-haul routes due to recovery of leisure travel demand
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2010 2Q
2009 2Q
※Route revenue increased %(YOY) is marked below
15.4%
32.8%
50.0%
25.7%
32.1%
37.3%
Dom Japan China SEA Americas Europe
■ Visa waiver & base effect from previous year contributed in the traffic increase of long-haul routes
(Unit : Billion KRW)
600
500
400
300
200
100
0
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Passenger Revenue by Region Sales
Korea
47%
Japan
14%China
6%
SEA
8%
Americas
19%
Europe
6%
Korea
53%
Japan
12%
China
5%
SEA
7%
Americas
18%
Europe
5%
2009 2Q(1,181.4 billion KRW)
2010 2Q(1,486.0 billion KRW)
■ Passenger revenue in 2Q increased ₩ 304.6 billion (+25.8% YOY)
- Korea region sales increased ₩ 234.7 bil (+42%)
- Overseas sales increased ₩ 69.9 bil (+11%)
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Changes
Supply (mil AFTK) 3,215 2,616 22.9%
APR 1,037 860 20.6%
MAY 1,111 895 24.1%
JUN 1,067 861 23.9%
Traffic (mil FTK) 2,503 1,983 26.2%
APR 812 656 23.8%
MAY 872 673 29.6%
JUN 819 654 25.2%
L/F (%) 77.9% 75.8% 2.1%p
YIELD (Cent) 32.3 19.1 69.1%
YIELD (KRW) 376.3 247.0 52.3%
2010 2Q 2009 2Q
Cargo Traffic
1,996
2,121
2,441
2,348
1,983
2,503
251 249226
305
247
376
1,800
1,900
2,000
2,100
2,200
2,300
2,400
2,500
2,600
05 2Q 06 2Q 07 2Q 08 2Q 09 2Q 10 2Q
FTK(Mil)
Yield(KRW)
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Cargo Traffic & Yield Changes
■ Continuous traffic growth since 2009 2H
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Record high traffic level
■ Recorded 2,503 million FTK, (Historically the highest level among all quarters)
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2010 2Q
2009 2Q
500
400
300
200
100
0
71.1%
93.4%10.5%
69.7%
94.2%
112.3%
Cargo Revenue by Route
Dom Japan China SEA Americas Europe
※Route revenue increased %(YOY) is marked below
(Unit : Billion KRW)
Major Routes
■ Leaded by IT products, Air Cargo traffic continues its growth
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Cargo Revenue by Region Sales
Korea
38%
Japan
9%
China
25%
SEA
13%
Americas
8%
Europe
7%
Korea
31%
Japan
8%China
27%
SEA
13%
Americas
12%
Europe
9%
2009 2Q
(547.4 billion KRW)
2010 2Q
(1,020.2 billion KRW)
■ Cargo 2Q revenue increased ₩ 472.8 billion (+86.4% YOY)
- Korea region sales increased ₩ 224.9 billion (+134%)
- Overseas sales increased ₩ 247.9 bil (+65%)
2010 2Q 2009 2Q Changes
Jet Fuel 865.0 665.3 30.0%
Consumption Amt(Mil bbl) 7.72 7.17 7.7%
Average Unit Price (USD) 93.2 64.7 44.1%
Labor 361.3 336.4 7.4%
No. of Employees 19,314 19,160 0.8%
Rental 63.3 64.5 -1.9%
No. of Rented A/C (as end of 2Q) 27 25 8.0%
Depreciation 192.5 178.3 8.0%
No. of A/C (as end of 2Q) 107 103 3.9%
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Key Expenses(Unit : Billion KRW)
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Operating Margin Ratio
(Unit : Billion KRW)
1,514
754
2,814
1,286
196
-1,164
-251
226 66
-1,273
1,001
1,540
2,202
3,521 7.5%
3.6%
11.9%
5.6%
0.9%
-4.7%
-0.9%
0.8%0.3%
4%
6%
8.5%
12.4%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
-₩1,800
-₩800
₩200
₩1,200
₩2,200
₩3,200
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
-6.1%
Historically the highest
in all 2nd quarters
■ Operating Margin turned positive since 2009 3Q, and
recorded 12.4% this quarter, which is historically the
highest in all 2nd quarters
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Translation Gain/Loss & Interest Expense
■ Large Translation loss due to KRW depreciation
■ Interest Expense increased slightly (+0.7% YOY)
(Unit : Billion KRW)
2010 2Q 2009 2Q Description
Translation
Loss/Gain (For the period of 1H)
-209.5 -65.42009 Dec 31 : ₩1,167.60
2010 Jun 30 : ₩1,210.30
(₩42.7 difference per 1$)
Interest Expense(For the period of 2Q)
142.9 141.9
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