Accounting change brings volatility to Aeroflot’s reinstated financial results

Aeroflot’s reinstatement of financial disclosures earlier this month has given an insight into its performance in the year-and-a-half since the Ukrainian conflict began, although the picture has been complicated by changes to accounting methods and the effect of currency exchange. Application of the new federal accounting standard – which affects treatment of aircraft leasing, and involves revaluing balance-sheet liabilities based on exchange rates – increases the “volatility” of financial results, the company states. The company turned in a pre-tax loss of Rb102b ($1b) over the six months to 30 June, and a net loss of Rb81.6b, although revenues rose by 48%. But it says this net loss contains a “sizeable” effect from the accounting change, including an negative exchange-rate revaluation of Rb87b – with over Rb32b in June alone – contributing to an overall deterioration in ‘other activities’ expenditure of Rb244b. Aeroflot states that the large first-half net loss amounts to just Rb1.6b if the effect is discounted. The company’s comparable interim figure last year was a loss of Rb38b, and it says this demonstrates an improvement of its financial result despite lower state subsidies for 2023. Aeroflot halted disclosure of financial results in 2022 as the carrier adapted to the fundamental changes in its operations as international sanctions were imposed in the wake of the Ukrainian conflict. <br/>