Financial Position (Non-consolidated)

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Edmund Dixon
5 years ago
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1 KOREAN AIR 3Q 2018

2 Disclaimer 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. 2

3 Financial Position (Non-consolidated) Dec. 31, 2017 Sep. 30, 2018 Change (Unit: KRW billion) Rate of Change Current Assets 3,220 3, % Cash Equivalent (incl. short-term instruments) 987 1, % Non-Current Assets 20,203 20, % Aircraft Related Assets 14,308 14, % Total Assets 23,423 24, % Financial Liabilities 13,829 14, % Other Liabilities 5,922 6, % Total Liabilities 19,751 20, % Total Equity 3,672 3, % Debt to Equity Ratio 538% 579% +41%p Exchange Rate : +41.3Won ( 17 Year End: \1,071.4/$ End \1,112.7/$) 3

4 Income Statement (Non-consolidated) (Unit: KRW billion) 3Q17 Rate of Change 1~3Q17 1~ Rate of Change Sales 3,126 3, % 8,788 9, % Operating Expense 2,747 3, % 8,063 8, % Fuel Expense % 1,909 2, % Except Fuel Expense 2,090 2, % 6,154 6, % Operating Profit % -10.1% (OP Margin) (12.1%) (11.5%) (8.3%) (6.9%) Non-Operating Profit Foreign Currency Related Gain/Loss, Net Interest Expense, Net Income Before Tax Net Income Net Debt in Foreign Currency: $7.9B (end of ) 4

Revenue Changes (Non-consolidated) Revenue: KRW

) 3Q17 (Unit: KRW trillion) - 0.5 1.0 1.5 2.0 2.

0% Passenger Cargo +54 bil. (+7.7%) +205 bil. (+10.

5 Revenue Changes (Non-consolidated) Revenue: KRW 3,410 bil % YoY growth (KRW 284 bil.) 3Q17 (Unit: KRW trillion) Cargo 22.1% Others 10.5% Aerospace 5.0% Passenger Cargo +54 bil. (+7.7%) +205 bil. (+10.7%) Passenger 62.4% Aerospace -39 bil. (-18.8%) Others +64 bil. (+21.7%) 5

6 Passenger Traffic Passenger (International & Domestic) 3Q17 YoY Capacity (mil. ASK) 25,923 25, % Traffic (mil. RPK) 20,990 21, % L/F(%) 81.0% 81.7% 0.7%p Yield (KRW) % 1~3Q17 1~ YoY Capacity (mil. ASK) 73,265 75, % Traffic (mil. RPK) 58,750 60, % L/F(%) 80.2% 80.6% 0.4%p Yield (KRW) % 6

7 Passenger Revenue by Route Operations (Unit: KRW billion) 800 3Q % +12.2% +21.2% +10.3% -6.9% +5.3% +12.7% 0 Domestic Japan China SEA Oceania Americas Europe [Revenue by Routes] [Revenue by Region] Europe Americas 28.1% Europe 22.0% Americas 15.0% 6.1% Oceania 2.7% SEA 17.9% China 13.2% Domestic 5.9% Japan 10.2% SEA 7.0% China 9.2% Japan 7.5% Korea 55.2%

8 Passenger Business Overview Business Summary Traffic (RPK) Changes : China 13%, Europe 9%, SEA 1%, Japan 0%, Americas 4%, Oceania 12% No. of Passengers Carried : 1% (Korea Outbound 1%, Overseas 1% ) 4Q18 Business Outlook & Plan To strengthen the U.S. -Asia network through JV with DL and To attract high-end commercial demand To improve profitability by new routes development & frequency increase New Route: Busan Da Nang Frequency Expansion: Incheon Hong Kong / Nha Trang / Bangkok / Fukuoka TemporarySuspension: Incheon Nanning Busan Hong Kong / Guam 8

9 Cargo Traffic Cargo (international & Domestic) 3Q17 YoY Capacity (mil. AFTK) 2,793 2, % Traffic (mil. FTK) 2,180 2, % L/F(%) 78.0% 76.6% -1.4%p Yield (KRW) % 1~3Q17 1~ YoY Capacity (mil. AFTK) 8,090 7, % Traffic (mil. FTK) 6,313 6, % L/F(%) 78.0% 76.4% -1.6%p Yield (KRW) % 9

10 Cargo Revenue by Route Operations (Unit: KRW billion) Q % % +7.9% +17.4% +25.5% -9.1% -13.3% Domestic Japan China SEA Oceania Americas Europe [Revenue by Routes] [Revenue by Region] 구주 Americas 44.5% Oceania SEA 14.3% Europe 24.0% Japan 5.3% China 10.5% Domestic 0.6% 미주 14.2% 동남아 14.0% 10.6% 중국 25.2% 한국 23.7% 일본 12.3% 0.8%

11 Cargo Business Overview Business Summary Traffic (FTK) Changes : Japan 7%, China 1%, Americas 3%, SEA 3%, Europe 7%, Oceania 19% Total Tonnage Carried : 2% (Korea Outbound 10%, Overseas 0%) 4Q18 Business Outlook & Plan To increase air cargo volume in the pick season (Risk Factor: economic uncertainties regarding the U.S. and China trade) To secure high-margin products to improve profitability To maximize fuel-efficient airplanes under the high fuel price market 11

) 2 [KRW billion] - 0.5 1.0 1.5 Fuel 29.

1% Fuel Depreciation +11 (+2.6%) +222 (+33.

12 Operating Expense Changes (Non-consolidated) Operating Expense: KRW 3,017 bil % YoY increase (KRW 270 bil.) 2 [KRW billion] Fuel 29.2% Depreciation 14.1% Fuel Depreciation +11 (+2.6%) +222 (+33.7%) Rentals 2.8% Rentals -0.3 (-0.3%) Others Labor 16.2% Labor +19 (+4.1%) 27.4% Airport Related Airport Related +5 (+1.7%) 10.3% Others +13 (+1.6%) Others: In-flight Service, Maintenance, Commission, etc. 12

13 Fleet Status Type of Fleet As of Dec. 31, 2017 As of Sep. 30, 2018 Delivery in 2018 (month) A220 (CS300) A A B B747-8I B B B Passenger Total B747F 9 4 B747-8F 7 7 B777F Cargo Total Total

14 Financial Position (Consolidated) Dec. 31, 2017 Sep. 30, 2018 Change (Unit: KRW billion) Rate of Change Current Assets 3,582 4, % Cash Equivalent (incl. short-term money) 1,272 1, % Non-Current Assets 21,066 21, % Aircraft Related Assets 14,308 14, % Total Assets 24,649 25, % Financial Liabilities 14,853 15, % Other Liabilities 6,045 6, % Total Liabilities 20,898 21,899 1, % Total Equity 3,751 3, % Debt Ratio 557% 608% +51%p 14

15 Income Statement (Consolidated) (Unit: KRW billion) 3Q17 3Q17 Rate of Change 1~3Q17 1~ Rate of Change Sales 3,214 3, % 8,985 9, % Operating Expense 2,858 3, % 8,265 9, % Operating Profit % (OP Margin) (11.1%) (11.4%) (8.0%) (6.5%) -11.8% Non-Operating Profit Foreign Currency Related Gain/Loss, Net Interest Expense, Net Income Before Tax Net Income

16 Thank you 16

KOREAN AIR 2Q18 Financial Results

KOREAN AIR 2Q18 Financial Results Disclaimer This presentation is for informational purposes only, contains preliminary financial and other information about Korean Air Lines Co., Ltd. and is subject to