ANA HOLDINGS Financial Results for the Three Months Ended June 30, 2023

In the first quarter, both operating revenue and operating income increased significantly compared to the same period the prior year, resulting in the first operating profit in four years for the Q1 period.

With the expansion in the scale of operations mainly on international routes, operating revenue increased to 461.0 billion yen (approximately 1.3 times of the same period of the previous year). In contrast, operating expenses were limited to 417.2 billion yen (approximately 1.2 times of the same period last year).

International passenger revenue was approximately 2.7 times of the same period in the previous year, domestic passenger revenue was approximately 1.4 times of the same period in the previous year, and international cargo revenue decreased approximately 60% from the previous year.

While the recovery of business travel demand in the domestic market remains at about 60% of pre-COVID levels and international cargo demand stagnates, ANA Group will work to achieve our previously announced full-year forecasts.

TOKYO, Jul. 28, 2023 – ANA HOLDINGS INC. (hereinafter “ANA HD”) today reports its financial results for the three months ended June 30, 2023.

Overview
In the first quarter of fiscal year 2023 (April 1, 2023 – June 30, 2023; hereinafter the “three months ended June 30, 2023”), led by strong demand for both domestic and international travel due to the further relaxation of travel restrictions, the airline business continued to recover. As a result, ANA HD recorded an operating income of 43.7 billion yen, ordinary income of 43.2 billion yen, and net income attributable to owners of the parent of 30.6 billion yen, marking the first time in four years for ANA HD to post a net profit in the first quarter.

“ANA’s performance this quarter reflects our strategy to be positioned for sustainable growth in domestic and international travel after the restrictions were relaxed” said Kimihiro Nakahori, Executive Vice President and Group Chief Financial Officer. “Being able to achieve a profitable first quarter for the first time in four years is a testament to the relentless efforts of ANA Group employees.”

Air Transportation
Operating revenue exceeded the amount recorded during the same period of the previous year, backed by a significant increase in passenger demand on both domestic and international flights. While variable costs increased due to an expansion in the scale of operations, profitability improved significantly as a result of extensive cost management initiatives.

1. International Passenger Service (ANA)

・Led by strong growth in the number of passengers visiting Japan and efforts to capture business demand for outbound travel from Japan as well as connecting demand between North America and China, the scale of operations expanded across the entire network. The number of passengers and revenue increased approximately 2.4 times and 2.7 times, respectively, marking a significant improvement from the previous year.

2. Domestic Passenger Service (ANA)

・While business demand has yet to return to pre-pandemic levels, leisure demand has recovered to pre-pandemic levels as COVID-19 was reclassified as a’common infectious disease’ with eased control measures. The demand was also stimulated by sales promotions such as the 70th anniversary sale. As a result, passenger volume increased approximately 1.5 times and revenue exceeded those of the previous year by approximately 1.4 times.

3. Cargo Service (ANA)

・For international cargo, despite efforts to capture demand between North America and Asia/China, cargo volume was approximately 80% and revenue was approximately 40% compared to the same period last year, due to a decline in demand among major industries including semiconductors, electronics, and automotive-related industries. Despite the downward trend, unit price was about 1.8 times higher and revenue was 1.5 times higher compared to FY2019 levels.

4. LCC (Peach Aviation)

・On domestic routes, leisure demand during the Golden Week holiday was strong and as a result of strong demand of inbound visitors to Japan on international routes, year-on-year passenger volume and revenue increased approximately 1.3 times and 1.8 times, respectively.

5. Others

・Other revenue from the Air Transportation business was 35.5 billion yen (up 12.2% year-on-year from 31.6 billion yen). This includes revenue from the mileage program, in-flight sales revenue, revenue from maintenance contracts and other sources.

Airline Related, Travel Services, Trade and Retail

1. Airline Related

・Revenue increased from the same period of the previous year due to an increase in airport ground support services, such as passenger boarding and baggage loading for overseas airlines, as well as an increase of in-flight meal-related operations in line with the recovery in passenger demand.

2. Travel Services

・For domestic travel, demand recovered steadily during the Golden Week holiday season, and the Japanese government’s travel support campaign helped boost demand as well. Overseas travel significantly outperformed the same period of the previous year, led by strong demand for Hawaii and a recovery in travel to Asia and mainland U.S. As a result, revenue significantly exceeded those of the same period of the previous year, fueling a return to profitability.

3. Trade and Retail

・In line with the recovery of passenger demand, revenue increased at the ANA FESTA and ANA DUTY FREE SHOP airport stores, as well as from the FUJISEY souvenir wholesale stores. In addition, the handling volume in the electronics business increased due to strong demand for semiconductors and as a result, operating revenue increased from the previous year.

*1: For shareholder’s equity, assets of non-controlling interests are deducted from net assets

*2: Debt/equity ratio: Interest-bearing debt / Total shareholders’ equity

*1: The scope of funds in cash flows has been changed from the current fiscal year (previous year’s results also reflect the change).

*2: Excluding negotiable certificates of deposit with maturities that exceed 3 months, etc.

Outlook for FY2023 (April 2023 – March 2024)
ANA HD maintains its consolidated financial forecast for FY2023, presented on April 27, 2023.