Revenues retained in Venezuela strongly impact TAP financial results in 2015

Without the Venezuela ‘extraordinary’ effect the company would have posted a loss of 7.6 M, 83.5% better than the 2014 results.

In 2015, TAP posted a negative result of 99 million EUR, which compares with the 46 million EUR reached in the previous year. The reason for such an aggravation derived from the need of consolidating the amount of 91.4 million EUR referring to sales in Venezuela which could not have been transferred yet, a situation meanwhile aggravated by several exchange devaluations.

Without the effect of this extraordinary factor, TAP would have posted a loss of only 7.6 million EUR – a net result quite above the 46 million obtained in previous year – that shows a clear recuperation versus 2014.

Revenue-wise, TAP reached in 2015 a total revenue of 2,398 million EUR, which compares with the 2,489 million revenue posted in 2014.

Although the worsening of the labour situation by the end of 2014 as well as during the second quarter of 2015 have affected the market’s confidence in TAP, the main reason for the negative results reported last year is the economic and political crisis in Brazil, which has caused not only a decrease in traffic volumes but also a significant decline in airfares. Though in a smaller scale, the slowdown of the economy in Angola also had a negative impact in air traffic thereby affecting the results of the company as well.

In the whole, the company’s operating costs had an improvement year on year and went down to 2,269 million EUR in 2015 against 2,341 million reported in 2014, thanks to the reinforcement of cost containment measures put in place along with the decrease seen in fuel prices, with TAP spending, last year, some 660 million EUR in fuel against the 798 million fuel costs posted in 2014.

The situation reported for Venezuela concerns TAP ticket sales in that market for the period between March 2013 and January 2015, whose revenues have been retained in the country due to its economic crisis, seriously hitting TAP and all the other international airlines operating to Venezuela likewise. However, TAP managed to limit its overall impact by suspending the company’s ticket sales in Venezuela in January 2015, thus preventing it from having an even larger extent.

Although TAP continues striving to recover the amount in debt and kept in Venezuela, this situation has proved to go on for a long period of time. Reason why the company felt the need of consolidating those values in its 2015 Report & Accounts as other international airlines also did.

Finally, a special highlight is to be made to the decrease of TAP debt, which went down from 1,062 million EUR in 2014 to 942 million in 2015, due to some reimbursements already done last year, benefiting from the start of the capitalisation process of TAP supported by the Atlantic Gateway Group, the new shareholder of the company.

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