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Frodon
25.04.2019 kl 09:40 6307

Ny analyse fra Sparebank 1 markets

«Weak operational cash flow, goodbye JV and cost improvement on track

Conclusion
We expect the report to be interpreted as positive due to postponement of aircraft deliveries, the improvement programme being on track and a positive RASK guidance for Q2. Still, we would use the opportunity to sell shares as the operational cash flow from NAS was weak despite seasonally higher pre-payments from customers. Improved operational cash flow is in our mind the main game changer for NAS in order to financing interest payments and principal repayments of debt.

Firstly, the main news is the postponement of aircraft deliveries. This is positive, but not the game changer that NAS needs, in our mind. Our take is that NAS’ main challenge is to generate sufficient cash flow from operations in order to pay interest and principal repayment of debt. Historically NAS has managed to secure financing on its aircraft deliveries. Moreover, based on our first take of the report, the cash flow from operations was weak this quarter, as it was in Q1 last year when NAS’ payment terms with credit card companies worsened. We need to get more information to understand why change in receivables was weak this quarter as it is important that cash flow from operation is high in 1H compared to 2H due to higher pre-payments from customers in 1H. NAS delivered an underlying EBIT of NOK2,262m in Q1 compared to our estimate of NOK2,121m. The minor deviation was that we had included more cost-cutting than what was realised in the quarter. Still, the deviation is not material and our conclusion is that NAS is on track with its improvement programme»

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