MIRA
INFORM REPORT
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Report Date : |
13.01.2007 |
IDENTIFICATION
DETAILS
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Name : |
JAPAN AIRLINES INTERNATIONAL CO LTD |
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Registered Office : |
2-4-11 Higashi-Shinagawa Shinagawaku Tokyo 140-8605 |
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Country : |
Japan |
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Financials (as on) : |
31/03/2006 |
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Date of Incorporation : |
Dec 1952 |
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Legal Form : |
Limited Company |
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Line of Business : |
Airline operator (domestic & international) |
RATING & COMMENTS
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MIRA’s Rating : |
B |
RATING
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STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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Maximum Credit Limit : |
YEN 10,500.2 MILLION |
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Status : |
Moderate |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
NAME
JAPAN AIRLINES INTERNATIONAL CO LTD
REGD NAME
KK Nippon Koku (Koku means airways)
International
MAIN OFFICE
2-4-11 Higashi-Shinagawa Shinagawaku Tokyo
140-8605 JAPAN
Tel: 03-5769-6098
Fax: 03-5460-5915
URL: http://www.jal.com/
E-Mail address: info@jal.com
ACTIVITIES
Airline operator (domestic &
international)
BRANCHES
Domestic (45), overseas (61)
(Tot 106 as of Mar/06)
CHIEF EXEC
TOSHIYUKI SHINMACHI, PRES &
CEO
Yen Amount
In million Yen, unless otherwise
stated
SUMMARY
FINANCES R/WEAK A/SALES Yen
2,199,385 M
PAYMENTS REGULAR CAPITAL Yen
100,000 M
TREND SLOW WORTH Yen 148,066 M
STARTED 2002 EMPLOYES 54,384
COMMENT
AIRLINE OPERATOR. FINANCIAL SITUATION CONSIDERED RATHER WEAK
BUT SHOULD BE GOOD FOR MODERATE BUSINESS ENGAGEMENTS.
MAX CREDIT LIMIT: YEN 10,500.2
MILLION, ON NORMAL 30 DAYS TERMS.
Forecast
(or estimated) for the 31/03/2007 fiscal term.
HIGHLIGHTS
The subject company was
established originally in Oct 1952 as a private company and was reorganized in
Oct 1953 as a government-owned company according to the Japan Airlines
Law. In Nov 1987, the government stake
(then 34%) was entirely sold off and the firm returned to the private
sector. In Oct 2002, when the firm
(JAL) integrated with Japan Air System (JAS, domestic flights operator), the
group formed a holding company, Japan Airline Corporation. The subject changed the corporate name as
captioned in Apr 2004. This is the
nation’s largest airline company, vying with All Nippon Airways (ANA). The amalgamation with JAS yielded strife in management
over the safety operations and series of safety troubles reported and
resulted. This led to the decrease in
domestic passenger who fled to ANA. The
internal strife is reported now subdued with new board members appointed.
The sales volume for Mar/2006
fiscal term amounted to Yen 2,199,385 million, a 3.3% up from Yen 2,119,876 million
in the previous term. Although the
international flights grew by 2.8% to Yen 690,200 million, while the domestic flights
were down by 2.2% to Yen 659,900 million, due primarily to the lost confidence
of passengers for the safety measures of the firm. International freight transport grew by 5.4% to Yen 180,500
million. The firm plunged into the red
to register Yen 41,608 million recurring loss and Yen 47,243 million net loss,
respectively, compared with Yen 69,805 million recurring profit and Yen 30,096
net profit, respectively, a year ago.
Skyrocketing fuel oil prices squeezed profits. Also posted special losses on asset impairment. Losses from foreign currency losses were
posted at Yen 6,000 million. The firm
skipped dividend payments.
For the current term ending Mar
2006 the recurring profit is projected at Yen 500 million and the net profit at
Yen 3,000 million, respectively, on a 4.6% rise in turnover, to Yen 2,301,000
million. The firm suspended 4
unprofitable international routes and curtained flights on 3 routes. Trying to shift higher fuel oil prices onto
fare. Internal management strife is
reportedly in pause.
The financial situation is
considered RATHER WEAK but should be good for ORDINARY business
engagements. We have downgraded the
rating to RATHER WEAK due to: firstly, business environment surrounding the firm
will continue to be severe; secondly, the firm is still on the road to recovery
of consumers’ confidence in its safety; and thirdly, the firm failed to improve
the earnings and financial structure as much as assumed in the previous
rating. Max credit limit is estimated
at Yen 10,500.2 million, on normal 30 days terms.
REGISTRATION
Date Registered: Dec 1952
Legal Status: Limited
Company (Kabushiki Kaisha)
Authorized: 6,000
million shares
Issued: 1,982,383,250
shares
Sum: Yen
100,000 million
Major shareholders (%): Japan
Airlines Corp (100), which shareholders consist of:
Tokyu Corp (4.0), Eitaro Itoyama
(4.0), Tokio Marine & Nichido Fire Ins (3.8), Nissay Dowa General Ins
(2.2), Japan Trustee Services Bank T (2.2), Master Trustee Bank of Japan T
(2.0), Fukoku Life Ins (2.0), Employees’ S/Holding Assn (1.8), Mizuho Corporate
Bank (1.7)
No. of shareholders: 248,789 (as
of Sept/05)
Listed on the S/Exchanges of:
Tokyo, Osaka, Nagoya, London, by the name of Japan Airlines Corp, the group
holding company.
Managements: Toshiyuki
Shinmachi, pres & CEO; Haruka Nishimatsu, s/mgn dir; Kiyoshi Kishida, s/mgn
dir; Katsuyuki Arai, mgn dir; Katsuhiko Kawano, mgn dir; Fumio Tsuchiya, mgn
dir; Hisaichi Endoh, dir; Yutaka Yoshino, dir; Osamu Sasahara, dir; Kimio Hiroike,
dir (--as of Apr/2006).
Nothing detrimental is known as
to the commercial morality of executives.
Related (Group) companies: Japan
Airlines International Co Ltd, Japan Airlines Domestic Co Ltd, other (Tot 154
as of Sept/05)
OPERATION
Activities: Airline operator,
providing scheduled & non scheduled air transport services, air cargo
transport services, aircraft maintenance services, and the related services
(100%).
of number of flights as of
Mar/06: domestic flights 20,521; international flights 4,396 (passengers 3,946
& freight 450).
(Overseas sales ratio 47.2%:
Asia/Oceania 20.1%; N America 17.7%; Europe 9.4%).
Clients: Passengers, business
firms, other
No. of accounts: Unavailable
Domestic areas of activities:
Nationwide
Payment record: Regular
Location: Business area in
Tokyo. Office premises at the caption
address are owned (JAL Bldg) and maintained satisfactorily.
Bank References
Mizuho Corporate Bank (H/O)
Bank of Tokyo-Mitsubishi (H/O)
Relations: Satisfactory
FINANCES
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(Consolidated in million yen) |
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Terms Ending: |
31/03/2006 |
31/03/2005 |
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INCOME
STATEMENT |
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Annual Sales |
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2,199,385 |
2,129,876 |
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Cost of Sales |
1,839,190 |
1,685,675 |
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GROSS PROFIT |
360,195 |
444,201 |
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Selling & Adm Costs |
387,029 |
388,051 |
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OPERATING PROFIT |
-26,834 |
56,149 |
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Non-Operating P/L |
-14,774 |
13,656 |
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RECURRING PROFIT |
-41,608 |
69,805 |
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NET PROFIT |
-47,243 |
30,096 |
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BALANCE
SHEET |
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Cash |
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173,948 |
252,573 |
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Receivables |
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237,479 |
222,934 |
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Inventory |
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83,717 |
76,335 |
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Securities, Marketable |
5,936 |
666 |
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Other Current Assets |
186,239 |
130,666 |
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TOTAL CURRENT ASSETS |
687,319 |
683,174 |
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Property & Equipment |
1,152,762 |
1,191,744 |
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Intangibles |
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72,075 |
69,854 |
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Investments, Other Fixed Assets |
249,084 |
217,882 |
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TOTAL ASSETS |
2,161,240 |
2,162,654 |
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Payables |
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237,803 |
213,783 |
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Short-Term Bank Loans |
149,607 |
137,247 |
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Other Current Liabs |
257,434 |
218,110 |
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TOTAL CURRENT LIABS |
644,844 |
569,140 |
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Debentures |
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280,000 |
310,000 |
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Long-Term Bank Loans |
800,001 |
862,223 |
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Reserve for Retirement Allw |
139,753 |
149,665 |
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Other Debts |
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121,126 |
51,105 |
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TOTAL LIABILITIES |
1,985,724 |
1,942,133 |
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MINORITY INTERESTS |
27,449 |
25,774 |
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Common
stock |
100,000 |
100,000 |
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Additional
paid-in capital |
136,145 |
136,141 |
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Retained
earnings |
(90,186) |
(34,978) |
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Evaluation
p/l on investments/securities |
8,777 |
3,765 |
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Others |
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(5,778) |
(9,407) |
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Treasury
stock, at cost |
(892) |
(775) |
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TOTAL S/HOLDERS` EQUITY |
148,066 |
194,746 |
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TOTAL EQUITIES |
2,161,240 |
2,162,254 |
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CONSOLIDATED CASH FLOWS |
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Terms ending: |
31/03/2006 |
31/03/2005 |
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Cash
Flows from Operating Activities |
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100,984 |
145,275 |
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Cash
Flows from Investment Activities |
-99,283 |
-21,456 |
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Cash
Flows from Financing Activities |
-91,384 |
-6,290 |
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Cash,
Bank Deposits at the Term End |
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172,132 |
260,933 |
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ANALYTICAL RATIOS Terms ending: |
31/03/2006 |
31/03/2005 |
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Net
Worth (S/Holders' Equity) |
148,066 |
194,746 |
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Current
Ratio (%) |
106.59 |
120.04 |
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Net
Worth Ratio (%) |
6.85 |
9.01 |
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Recurring
Profit Ratio (%) |
-1.89 |
3.28 |
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Net
Profit Ratio (%) |
-2.15 |
1.41 |
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Return
On Equity (%) |
-31.91 |
15.45 |
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RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
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<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |