Staða flugfélags þjóðarinnar

Hér á þessu bloggi er áhugaverð umræða um stöðu Icelandair – svona í framhaldi af því að einn stjórnarmaður taldi sér bolað burt til að hægt væri að koma „kommunum“ að. Sá virðist lifa í þeirri íslensku trú að menn eigi að sitja áfram þótt þeir setji allt á hausinn, bara ef þeir eru nógu vel tengdir eða í réttum flokki:

“… a brief analysis of Icelandairs accounts … My conclusion was that it was the funding of the company that was the big problem. The equity stakes seized are basically worthless.

Oh, gimme a break – when will Icelandic companies realise that people can read a balance sheet? This is just like the banks the moment before they went bust!

First of all, what does it mean that they beat expectations? Whose expectations? Their own! And their own said that they expected things to be terrible, so now that they are just plain bad then they can say that they beat expectations.

Go and look at the figures.

Forget Icelandairs P&L statement – it is a fiction. What is worse is that they keep quoting profit before interest payments. Why is that significant? Go to the balance sheet page. This is simply horrible.

This shows 98 billion in assets. Great you say! But 29 billion of that (about 30%) are “Intangible assets” – or to put it another way “Assets that dont exist in reality”. So WHAT they OWN is not as great as it seems.

Look at the other side of the coin – where did the money come from to buy what they own: this shows just 17 billion of shareholders equity and a massive 81 billion of loans! Thats awful. But it gets worse: 57 billion are CURRENT liabilities. That is to say they are due to be paid back within 12 months. Aaaagggghhhh!

(And imagine the interest payments needed to service such a huge debt – that is why the company happily quotes its profits BEFORE interest payments.)

Also compare 17 billion of equity with 29 billion of intangible assets: result – the shareholders own fresh air! Zilch! Nada!

The company admits it is trying to get rid of the Intangible Assets from its books but if it did that today it would wipe out the shareholders and the company would be bankrupt.

Equally, the company has a horrible repayments profile on its debts. They are desperately trying to reschedule these. (In plain language Icelandair is saying “Hello creditors. Yes we know we must pay back 50 billion this year. Would you mind if we put off repayment for another 5 years or so. Well continue paying the interest. And then youll get your 50 billion back. Honest!”)

The cash flow statement (which tells things as they really are) is simply bad. My guess it looks better than it does because they have managed to refinance a debt with a new issue of some sort. I would like to see a breakdown of those numbers. You would probably faint if you saw the details.

So end point: you can forget new routes, passenger numbers etc. Icelandair has excatly the same problem as the entire country: huge debts which need to be repaid. And just like the country the assets to hand to repay the debts fall short of what the company actually owns. The question is not one of profitability but insolvency. It is a question of refinancing in some shape or form.”