Russia’s Transaero Airlines has reported a 2014 net loss of RUB14.5 billion ($255 million). The company restated its 2013 financial results, reversed from a net profit of RUB788 million to a net loss of RUB13.3 billion currently (a $406 million difference, according to the exchange rates as of Dec. 31, 2013). The company did not explain the reason for the change.
Full-year revenue for 2014 grew 7.8% to RUB113.7 billion. Operating expenses were down 2.4% year-over-year to RUB109.2 billion.
The carrier’s net cash position fell 66% to RUB461.5 million. The spending on MRO fell 50% to RUB5 billion. Creditor liabilities (mainly to suppliers) increased 70.4% to RUB36 billion. At the same time, Transaero’s fleet grew from 100 to 104 aircraft in 2014.
While the results were published according to International Financial Reporting Standards (IFRS), the airline’s auditors—the Russian group RSM Rus—heavily qualified their audit opinion with reference to several points where Transaero’s accounting policies differ from IFRS.
The auditor voices concern in the following areas: Transaero has not accepted the airline’s brand valuation of RUB61.2 billion; the company has increased in value nearly 30 times year-over-year from RUB2.1 billion; the name of the valuer is not disclosed.
RSM Rus also said the airline does not make sufficient provisions for aircraft under financial leases. Transaero does not recognize in its accounts either the positive or the negative value effects of any sale and leaseback operations, according to the RSM Rus report. The auditor pointed out the net effect of the company’s selected deviations from IFRS rules was not disclosed.
Transaero is Russia’s second-largest carrier. In 2014, it carried 13.2 million passengers, up 5.6% from 2013.
Last week, the carrier took delivery of a new Boeing 737-800, which is part of the Sberbank Leasing deal signed in 2013. The aircraft is painted in a new livery reflecting a change in corporate identity.
In January, the carrier received a three-year RUB9 billion loan from VTB Bank, backed by the Russian government.Transaero asked for government support as the airline faced difficulties because of “drastically changing macroeconomic conditions.”