OREANDA-NEWS. Aeroflot - Russian Airlines upped its IAS net profit of 1H 2007 by 18.8% versus similar period of 2006 to 160.8 mn USD, Veles Capital' information division reports with reference to the company's release. Company's income rose +28% to a total of 1.676 bn USD. Growth of operating costs made 22.8% to 1.4 bn USD. EBITDA margin rose + 66.4% to 340.6 mn USD. Passenger transfer income formed 1.236 bn USD (+26.5%). Income of cargo transfer dropped 6% and amounted to 119.8 mn USD. 2007 total net income is expected to come to 240 mn USD. Published results of Aeroflot comply with expectations and plans of company. The ratio of transferred passengers by Aeroflot and its subsidiaries - Aeroflot-Nord and Aeroflot-Don equals 83, 11 and 6, respectively. Income from passenger transfer forms a lion's share of company's sales - 74%, cargo transfer contributed 7% to the total value.

Rest is gained through royalty payments and use of hotels, other auxiliary facilities. Attention of experts was attracted by a decrease of fuel costs: growth of year's half made 9%. Such an impressive saving is related, according to the experts, to implementation of a cost reduction program, initiated by company. On top of that, serious role was played be renovation of fleet and replacement of outdated soviet planes for more fuel-effective foreign liners. Results demostrate an increase of Aeroflot's business effectiveness. Operating effectiveness formed 16%, 3.6 p.p. above same value of 1H 2006. Aeroflot's activities have seasonal character and traditional growth of 3Q will change with fall of 4Q. "This year we expect serious change results of last quarter, besides of that, negative role could be played by enforcement of visa rules by many countries. However, in order to fight season factor, Aeroflot uses some measures, including promotional programs. Considering new data and risks we shall renew our financial model of company. For now we point out positive influence of published report and expect similar results at H2 2007 and 2007 in general,"the experts conclude.