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All Nippon Airways Lifts Annual Forecast On Demand, Lower Costs; Ups Dividend

Japan's largest air carrier All Nippon Airways Co Ltd (ALNPF.PK, ALNPY.PK), commonly called ANA Group, on Monday lifted its earnings and revenue forecast for fiscal 2011, citing strong demand in tourism as well as lower operating expenses. The company also doubled its dividend for the year.

For fiscal year ended March 31, ANA now projects consolidated net income of 28 billion yen or 11.15 yen per share, a 40 percent increase from previous estimate of 20 billion yen or 7.96 yen per share. Operating revenues are now anticipated to be 1.41 trillion yen, a 0.8 percent increase from previous outlook of 1.4 trillion yen.

Operating revenues have increased by approximately 11 billion yen due to strong demand in tourism and other factors, in spite of sluggish business demand for air transport on domestic routes, the company noted.

In the year ended March 31, 2011, net income was 23.3 billion yen or 9.29 yen per share and revenues were 1.36 trillion yen.

On a non-consolidated basis, net income for the year is now expected to be 26 billion yen or 10.35 yen per share, a growth of 44.4 percent from previous forecast, and higher than last year's 23 billion yen or 9.17 yen per share.

Meanwhile, non-consolidated operating revenues are now expected to be 1.233 trillion yen, a decline of 0.6 percent from the previous forecast, but higher than last year's 1.19 trillion yen.

The company also lifted its forecast for consolidated operating income by 7.8 percent and recurring profit by 21.4 percent to 97 billion yen and 68 billion yen, respectively. The revision in operating income forecast mainly reflects further progress on reduction of operating expenses in the air transport business, while that of recurring profit reflects gains on the disposition and sale of aircraft, among other factors.

Earlier in January, ANA had backed fiscal 2011 net profit and revenue forecast, while lifting operating income and recurring profit view, reflecting the strength of the yen, emergency program initiatives and cost structure reforms.

The company then had said, "The Group expects to stimulate demand through initiatives such as the introduction of the Boeing 787 on new routes. However, this is likely to be offset by external factors such as the impact of the Thai flood and a worsening economic outlook in Europe because of the bond crisis." ANA added then that Japan's economy continues to recover gradually from the earthquake.

In mid February, ANA announced its two-year strategy for the fiscal years 2012 and 2013, including further efficiency measures to reduce costs by 100 billion yen. ANA also targets a 22 percent increase in its international operations in two years.

As part of its strategy, the company aims an increase in operating income to 110 billion yen in 2012, with consolidated operating income margin of 7.3 percent. For 2013, operating income target is 130 billion yen, with an operating income margin of 8.3 percent.

Further, All Nippon Airways revised today its dividend forecast to 4 yen per share from previous forecast of 2 yen per share citing revision in net income forecast.

All Nippon shares closed Today's trading in Japan at 222 yen, down 3 yen or 1.33 percent.

by RTTNews Staff Writer

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