Aeroflot - Closing Our Trade Idea
We opened a long trade idea for Aeroflot on October 31 in anticipation of strong 3Q19 financials and possible positive comments during the earnings call, including about one-off fuel compensation from the government. However, intensified competition on international routes and currency headwinds kept revenues per passenger-kilometer virtually flat y-o-y during the quarter. Although fuel costs eased y-o-y, total CASK excluding fuel grew 7%. The management appears pessimistic that the company will receive fuel compensation this year due to bureaucratic delays. Given this, we close our trade idea, though we retain our long-term positive view on the stock. Since inception, the stock has fallen 3.3% (to R102.8 per share) while the RTS has posted a 0.45% total return.PJSC Aeroflot Russian Airlines is an international air transport company which is engaged in operations in Russia. The principal activity of Co. is the provision of passenger and cargo air transportation services both domestically and internationally and other aviation services from its base at Moscow Sheremetevo Airport. Co. and its subsidiaries also includes activities comprising airline catering, the operation of a hotel and insurance services. Associated undertakings mainly comprise hotel and duty-free retail businesses. The principal business segments are airline operations, airline catering, hotel operations and other.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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