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Business ReviewFinancial ReviewInformation for shareholders

Board of Directors Report
Financial Statement Principles
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Finnair Oyj Income Statement
Finnair Oyj Balance Sheet
Finnair Oyj Cash Flow Statement
Notes
Shares and Shareholders
Proposal Concerning Disposal of the Profit
Statement of the Supervisory Board
Auditors Report
Key Figures 1998/99-2002
Formula for ratios

Financial Result

The Group's result after financial items and excluding capital gains improved to 18.9 million euros from the previous year's 12.6 million euro loss. The result before depreciation, aircraft leasing payments and capital gains (EBITDAR) improved 8.1 per cent and was 211.5 million euros (195.6 million), representing 12.9 per cent of turnover. Turnover rose by 0.5 per cent to 1,639.9 million euros. Unit revenues for passenger traffic remained at the previous year's level but, taking cargo revenue into account, unit revenues overall fell a further 1.9 per cent.

Operating costs fell during the year under review by 1.5 per cent and unit costs of flight operations by 4.1 per cent. Most of the objectives of the 115 million euro cost-cutting programme begun at the end of 2001 were achieved. There were significant falls in fuel costs, ground handling and catering costs, marketing costs and depreciations. The cost of outsourced operations contributed to the rise in other operating costs.

Despite lower personnel numbers and cost-cutting measures, personnel costs rose by 1.9 per cent. The proportion of the Group's total operating costs accounted for by personnel costs rose to 30.0 per cent, compared to 28.9 per cent in 2001. In the financial year, contributions paid to Finnair's pension fund amounted to 86.8 million euros, which was 14.7 million euros more than the previous year. This was mainly due to a weaker performance than last year of the pension fund's investment activity following a fall in stock market prices as well as to implemented early retirement arrangements. The assets of Finnair's pension fund fully cover its pension liabilities.

Net Capital gains arising from a sale and lease-back arrangement for one MD-11 and from Group restructuring totalled 35.5 million euros. The gains from the restructuring of IT operations amounted to 22.6 million euros, of which 13.3 million euros has been entered in the 2002 result and the rest periodized over 2003-2004. In the previous year, capital gains totalled 21.5 million euros, consisting mainly of the sale of four MD-80 aircraft.

Return on capital employed was 7.6 per cent (2,9 %) and return on equity 5.9 per cent (1,2 %). Earnings per share came to 0.43 euros, whereas the year before the figure was 0.08 euros. Equity per share at the end of the financial year amounted to 7.58 euros, compared with 7.22 euros the year before.