Aer Arann has managed to strongly increase its pre-tax profits to more than €872,000, according to its first set of consolidated financial statements.
The airline, owned by entrepreneur Mr Padraig O'Ceidigh and his wife, reported a 63 per cent increase in turnover in accounts covering 2002. The accounts for Aer Arann Group Teoranta were approved a few weeks ago and have just been lodged with the Companies Office.
Turnover was up to €26.8 million from €16.4 million the previous year, while pre-tax profits rose to €872,815 from €108,577. The company managed to reverse a gross loss of almost €1 million in 2001 to turn in a gross profit for 2002 of €2.6 million.
Operating expenses rose from €9.4 million to €11.2 million and this, combined with higher administration costs, trimmed profitability.
After deducting tax of €146,648, the results indicate that €726,167 was retained by the company. Despite this healthy performance, the company still carried foward €1 million in accumulated losses on its profit and loss account into its balance sheet. While much of this was covered by reserves, the balance sheet still shows a deficit of over €330,00 in shareholders' funds, though this is well down on the figure of over €1 million the previous year. Short-term creditors were owed €12.6 million, up from €5.2 million in 2001.
The accounts note that, since the end of 2002, the airline has successfully tendered for two more public service obligation (PSO) routes, from Dublin to Donegal and Dublin to Sligo. A PSO route is a service that would be unprofitable without a Government subsidy. In April of 2003, the company launched five new routes between Ireland and the UK.
The profit and loss account breaks down the company's turnover by geographical segment. Over €21 million came from operations in the Republic, with €5.2 million coming via British routes. The vast majority of turnover resulted from ticket sales, with a small contribution from cargo and charter activities.
The accounts point out that 2002 was the first year the company was "required to prepare consolidated financial statements". The 2001 figures had to be restated to make them comparable with 2002.
The airline employed 223 staff during the period under review and staff costs were up to €6.9 million from €4.8 million previously. Director's fees for Mr O'Ceidigh and his wife, Ms Caitlin O'Ceidigh, rose from €62,261 to €109,145. Overall director's remuneration, including pension contribution, rose from €451,758 to €477,335.
The accounts disclose that, in the period, Government grants to Aer Arann amounted to €311,307, down from €351,472 in 2001. There were over €700,000 of directors' loans invested in the company at the end of 2002.
The airline's Galway airstrip had an open market value at the end of 2002 of almost €1 million.
