August traffic statistics

We consider the August traffic statistics slightly positive for Norwegian Air Shuttle, with an in-line yield and RPK, but a better load reflecting a lower ASK. We expect consensus 2017 adj. EBITDA to rise by 3–5% on this news, and believe a slightly positive share price reaction is warranted today.
Yield of NOK0.44, down 4% YOY (we forecast NOK0.44, down 4% YOY) and down 10% MOM. The negative yield trend is explained by marginally negative yield pressure in the market (1%-point), some negative mix effects (2%-points) from a higher long-haul share, and a negative FX effect (1%-point).
RPK in line, but with better load . RPK (m) was 6,302 (we forecast 6,325), +23% YOY and -5% MOM. The load factor was 91.1% versus our forecast of 90%, primarily due to a lower than expected ASK (m) of 6,915 (+24% YOY and -2% MOM, we forecast 7,035). Total passenger numbers were 3.28m (we forecast 3.19m), +14% YOY and -2% MOM.
Implied adj. EBITDA of NOK698m. We calculate implied August EBITDA of NOK698m, versus our forecast prior to the report of NOK644m. The hedging gain QTD is NOK470m (End July: 378m), of which NOK367m (End July: NOK305m) was unrealised.
Valuation less attractive than peers.