---
--- Debt - financial consequences :
---- Just a few Financial FACTS --
"...In particular,
the group's net debt has ballooned
from --- NOK4.4 billion at the end of 2013 --- to --- NOK18.7 billion ( EUR 2.0 billion ) at the end of 3Q 2016.
This has coincided with the addition of long haul aircraft to its business model, but also reflects expansion of its narrowbody fleet. "
"... Norwegian's profitability suffered after its long haul launch, falling into loss in 2014 and returning to profit in 2015
–-- mainly thanks to lower fuel prices.
It is likely to report another increase in profit for 2016, ... ---- but again mainly due to lower fuel prices:
at the 9M 2016 stage its ex fuel unit cost was up by 3%
--- and unit revenue was flat. "
"...Norwegian plans to accelerate its ASK growth from 18% in 2016 to 30% in 2017, driven by a 60% increase in widebody capacity and a 20% increase for narrowbody routes.
This is likely to place more acute downward pressure on unit revenue, while help from lower fuel prices may not be as strong as in 2016."
"...Moreover, Norwegian expects its capital expenditure to double
from --- USD 1.0 billion in 2016 --- to --- USD 2.1 billion in 2017 as aircraft deliveries step up significantly.
"This points to a further increase in net debt. " ..... " but debt must be repaid one day. "
----- FINANCE / DEBT :
Source : 4-traders - Thomson Reuters
Estimates in Million NOK -
2016 e - 22,016
2017 e - 33,695
2018 e - 43,416
2019 e - 57,611
-------------------
The stock price continues in Steady Persistent Decline.
MINUS - 30 % - From Last April 2016.
MINUS - 11% - From two weeks ago, January 2017
Last April 379 / January 302 / Now 268 again .
Norwegian faces MANY challenges,
Overcapacity - Overexpansion / Increased Volatility / Rising Debt / Rising Financing Interest Rates / Rising Intense Competition / Escalating Fare Wars / Rising Fuel Prices / Underpaid - Overworked Labor Force.
-------------------------------------------------------------------------------------------
The sensitivity-analysis showed us that our model is highly sensitive to the fuel cost and the currency combined due to high volatility and sensitivity towards the cost of debt.
The sensitivity towards the cost of debt is driven by NAS having a high debt to equity ratio."
A debt to equity ratio of 5 means that debt holders have a 5 times more claim on assets than equity holders.
A high debt to equity ratio usually means that a company has been aggressive in financing growth with debt,
and, often results in volatile earnings as a result of the additional interest expense and a driver of stock performance / risk.
S A S AB's Debt to Equity Ratio (Quarterly ) : 0.00 for July 2016.
Norwegian Air Shuttle Debt to Equity Ratio (Quarterly): 5.83 for Sept. 2016.
Norwegian Air Shuttle Debt to Equity Ratio ( Annual ) :
Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15
0.99 > 1.38 > 2.19 > 2.28 > 2.37 > 6.30 > 6.61
Norwegian Air Shuttle And Companies / Investment Rating = Baa3
Investment Grade: Aaa → Aa1 → Aa2 → Aa3 → A1 → A2 → A3 → Baa1 → Baa2 → Baa3
Long-term Corporate Obligation Ratings are the relative credit risk of fixed-income obligations with an original maturity of 1 year or more.
The ratings reflect both the likelihood of default and any financial loss suffered in the event of default.
------------------------------------------------------------------------------------------------------------------------------------------------