Sweden's SAS seeks to reassure on financial future
STOCKHOLM (AP) — Scandinavian airline SAS AB sought to reassure investors that it's not in deep financial trouble after widespread speculation over its future prompted the temporary suspension of trading of the company's shares.
In an unscheduled statement, SAS said Tuesday it expected to make a pretax profit of 568 million kronor ($85 million) in the third quarter. It also said it was planning to save 3 billion kronor before tax, though the plan is still pending board approval. More details will be communicated once it has been approved. It also said it is planning to sell some of its non-core assets, and that those are hoped to garner a total of another 3 billion kronor.
Investors appeared relieved and the company's announcement helped its share price spike 21 percent to 7.05 kronor. Trading in the group's shares resumed shortly after the announcement, at 11.30 am local time (1030 GMT).
SAS's statement — the full earnings report is still scheduled for publication on Nov. 8 — came after trading in its shares was halted on most of the Nordic stock exchanges, including in Stockholm, Copenhagen and Oslo, after multiple media reports had speculated about the company's financial future.
A market notice from stock exchange operator Nasdaq OMX said the move was taken after recent news articles on the company's financial future, in order to "ensure a fair and orderly market."
In recent weeks, local media have speculated that the Stockholm-headquartered group was in trouble and struggling to get loans. Rumors have also swirled that the company was preparing a new cost-cutting program.
The company said its announcement Tuesday was "proof" that its previous cost-cutting measures have paid off. It also said the third-quarter results will show passenger revenue growth of about 9 percent and a unit cost reduction of some 6 percent.
The company's main owners consist of the Swedish, Danish and Norwegian governments.