OREANDA-NEWS. Transaero Airlines has published the financial statements for 2014 under International Financial Reporting Standards (IFRS) and Russian Accounting Standards (RAS). The work to implement corrections of auditors as well as to incorporate recommendations of the banking community took longer time than usual. In the course of this correction, changes were made into the statements for the previous reporting period to report correctly the appropriate indicators. In addition to this, the company filed an amendment of accounting reserves for 18 billion rubles in total. Moreover, the company's fixed and intangible assets were reevaluated.

In 2014 Transaero achieved the revenue growth despite the economic headwinds of the second half of the year. The airline's revenue amounted to 113.76 billion rubles under IFRS, an 8% increase over 2013. The growth rate proved to be higher than the average market growth rate and outpaced the growth rate of the airline's passenger traffic, which increased by 5.6% for the reporting period.

The main negative factors, which affected the company's performance during the reporting period, included the following:
- the international sanctions, which resulted in changes of the credit policy in the Russian banking sector, the increase in interest rates, rolling back of lending, claims for early repayment of debt principal;
- a significant depreciation of the ruble currency, decline in customer demand for international trips and flights that required the adjustments of the airline's passenger capacities and prices for this segment;
- restrictions on flights over Ukraine, which caused a significant increase in operating expenses;
- the decline in the tour operators' bookings;
- restrictions on international travel for a number of categories of Russian civil servants;
- the start of the domestic air cargo slowdown.

The positive factors included:
- the introduction of nonrefundable tickets after necessary changes were introduced in the domestic legislation;
- the decrease in fuel prices in the international airports in November-December 2014.

However, these factors were clearly not enough to offset the impact of the whole range of the negative factors.

At the same time, thanks to a number of measures undertaken by the airline to enhance its business operations and the implementation of cost reduction programme, Transaero managed to improve its financial results of its core activities, i.e. operations:
* Operating profit under IFRS amounted to 4.5 billion rubles against a loss in the previous year.
* Airline's operating margin increased by 10.1 percentage points and reached 4%.
* EBITDA increased to 7.5 billion rubles, while EBITDA margin grew by 6.6%.
* EBITDAR reached 12 billion rubles, EBITDAR margin grew 10.5%.

Despite the extremely unfavorable changes in the macroeconomic situation and the impact of external negative factors, primarily the sharp depreciation of the ruble, the net accounting loss of the company only increased by 1.2 billion rubles compared to adjusted results for 2013 and was 14.46 billion rubles.

Fixed assets of the company increased to 107 billion rubles.

The company's capital has increased significantly, reaching 33.4 billion rubles.

However, due to exchange rate fluctuations and a significant increase in the cost of credit and leasing servicing, denominated mostly in foreign currency, the growth in financial expenses of the company was 44% (15 billion rubles).

Accounts payable increased by 69% to 36.2 billion rubles, including short-term loans under the influence of exchange rate fluctuations increased by 24% to 30.3 billion rubles.

Accounts receivable and prepayments decreased by 2% to 4.7 billion rubles. Short-term liabilities increased by 32% to 81.2 billion rubles. Long-term liabilities increased by 31% to 78.2 billion rubles. It is worth to notice that after having paid off almost 8 billion rubles of loans during the period from July to December 2014 and being unable to refinance its business due to the economic situation, Transaero Airlines asked for the government support to get a commercial loan in the amount of 9 billion rubles from VTB Bank. The government made a decision to support Transaero Airlines as the second largest airline in the country, which was included on the list of the strategic enterprises (backbone companies) of Russia and provided the necessary guarantees. That made possible to start the stabilization process in the company's financial activities.

The financial results for 2014 were achieved on the basis of the following operating results:
* The number of passengers carried was 13,198,591 people (a 5.6% increase over 2013).
* Transaero Airlines' passenger turnover reached 47,066,421,000 RPK (a 0.1% growth in comparison with 2013).
* The passenger load factor amounted to 83.5%. This is the highest result among the five largest Russian air carriers.
* Transaero Airlines became the industry leader in terms of cargo turnover on domestic routes.

The airline's total network exceeded 260 domestic and international routes.