Weak pound takes effect on British Airways owner IAG's profits
- Author: Zachary Reyes Feb 24, 2017,
Feb 24, 2017, 13:41
Pre-tax profits were 2.4bn euros before exceptional items, up 32.7% to 31 December 2016.
The group reported an 8.6 per cent rise in annual operating profit in line with expectations on Friday and said it would increase cash returns to shareholders through a stock buyback.
Total revenue for previous year at the Irish carrier was €1,776m, which represented a rise of 2.8pc.
The airline group said it meant to carry out a share buyback of 500m euros during the course of 2017. IAG carried 100.7 million passengers in 2016, up from 88.3 million in 2015.
IAG Chief Executive Willie Walsh said IAG delivered a "good performance" in 2016 in a "challenging environment", while its overall performance for the year took a hit from the fall of the pound against the euro following the vote by the United Kingdom to leave the European Union in June.
Last month, IAG said it carried a record number of passengers in 2016, on the back of a strong performance in Europe and in North America.
Walsh said the group was committed to providing a sustainable dividend for shareholders, confirming that the board was proposing a final dividend of 12.5 euro cents per share.
While the pound's slide hurt the value of sterling sales, wiping 460 million euros from earnings, the company said demand improved in the second half and that profit will gain this year. "In particular, this was due to the weak pound following the UK's European Union referendum", he said. However, despite that, we've made good progress and continue to build on all we've achieved in our first five years.