Cyprus Airways: modeFinance Credit Report

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modeFinanceTM HeadquarterBuilding A - AREA Science ParkPadriciano 99 - 34149 Trieste - ItalyPh.: +39 040 375 5337Fax: +39 040 375 [email protected]

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CYPRUS AIRWAYS PUBLICLTD.Tuesday, 09 April 2013

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D C CC CCC B BB BBB A AA AAA

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D C CC CCC B BB BBB A AA AAAnot

available

non return extremlypathological

pathological highdanger

weak sufficient adequate good very

strongextremely

strong

Company name CYPRUS AIRWAYS PUBLIC LTD.

Identification number Not available

Country Cyprus

ZIP code and city 2404 - ENGOMI (NICOSIA)

Address P.O. BOX 21903

+357 22 661800

www.cyprusairways.com.cy

[email protected]

Legal form Not available

Account Consolidated

Incorporation date 1947

NACE 2 Sector 5110 - Passenger air transport

Listed

Status Active

MORE Credit limit Not eligible for credit on the base of the available informations

31/12/2011 31/12/2010 31/12/2009

Turnover (th e) 212,953 253,516 253,571

Rating C CCC CCC

Probability of default 56.00% 15.00% 15.00%

Confidence Level 100% 100% 100%

Solvency ratios

Leverage ratio -9.88 22.50 18.87

Total asset/Total liabilities 0.90 1.04 1.05

Liquidity ratios

Current Ratio 0.81 1.08 1.11

Quick Ratio 0.80 1.05 1.08

Profitability and economic equili-

brium ratios

Return on investement ROI (%) -15.79 -1.13 -0.83

Return on equity ROE (%) -149.48 2.98 -34.94

Asset turnover 1.50 1.39 1.36

Interest paid weight -0.05 -0.44 -1.07

Gross Profit/Operating revenue 0.04 0.18 0.05

Interest Coverage ratios

EBIT interest coverage ratio -38.80 -6.92 -3.41

Analysis and trend of financial

strength


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modeFinance TM srlVAT number [email protected]

Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741

Sector Analysis

Company Healthy Balanced Vulnerable Risky

Solvency ratios

Leverage ratio -9.88 0.62 2.43 5.36 -2.22

Total asset/Total liabilities 0.90 2.61 1.41 1.15 0.80

Liquidity ratios

Current Ratio 0.81 2.08 1.16 1.03 0.55

Quick Ratio 0.80 1.76 1.07 0.92 0.43

Profitability and economic equilibrium ratios

Return on investement ROI (%) -15.79 21.00 5.96 -0.16 -18.06

Return on equity ROE (%) -149.48 29.64 11.10 -8.50 -90.11

Asset turnover 1.50 1.94 1.45 1.29 1.63

Interest paid weight -0.05 0.00 0.14 0.00 -0.07

Gross Profit/Operating revenue 0.04 0.24 0.22 0.10 0.01

Interest Coverage ratios

EBIT interest coverage ratio -38.80 416.40 5.58 -0.29 -9.97

Cash Conversion Cycle (days)

Days Sales Of Inventory (DIO) 3 10 10 8 7

Days Sales Outstanding (DSO) 84 34 41 38 33

Days Payable Outstanding (DPO) 126 17 29 36 48

Cash Conversion Cycle (DIO + DSO - DPO) -39 25 17 15 -9

Numer of analyzed companies - 67 246 155 100

(Average) Rating C A BB B C

The sector has been chosen according to:

international companies in the sector NACE 2 5110 with financial data of year 2011.


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Sector Analysis - Graphs


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Balance Sheet

BALANCE SHEET (th e) 31/12/2011 31/12/2010 31/12/2009

Accounting practice IFRS IFRS IFRS

Exchange rate EUR - EUR 1 1 1

Number of months 12 12 12

Total assets 141,861 182,853 186,939

Fixed assets 52,651 87,205 84,214

Intangible fixed assets 1,333 1,311 863

Tangible fixed assets 34,370 59,917 65,598

Other fixed assets 16,948 25,977 17,753

Current assets 89,210 95,648 102,725

Stocks 1,523 2,425 2,961

Debtors 49,218 53,198 15,264

Other current assets 38,469 40,025 84,500

Cash & cash equivalent 28,997 29,871 71,907

Shareholders funds -15,979 7,782 9,408

Capital 35,204 35,204 35,204

Other shareholders funds -51,183 -27,422 -25,796

Total liabilities 157,840 175,071 177,531

Non current liabilities 48,228 86,327 85,285

Long term debt 31,958 51,929 63,892

Other non-current liabilities 16,270 34,398 21,393

Current liabilities 109,612 88,744 92,246

Loans 7,702 9,596 13,406

Creditors 73,610 53,409 16,270

Other current liabilities 28,300 25,739 62,570

Total shareh. funds & liab. 141,861 182,853 186,939

NET DEBT (th e) 31/12/2011 31/12/2010 31/12/2009

Short term debts 7,702 9,596 13,406

Long term debt 31,958 51,929 63,892

Cash & cash equivalent 28,997 29,871 71,907

Net debt 10,663 31,654 5,391

31/12/2011 31/12/2010 31/12/2009

Working capital -22,869 2,214 1,955

Net Current Assets -20,402 6,904 10,479

31/12/2011 31/12/2010 31/12/2009

Days Sales Of Inventory (DIO) 3 3 4

Days Sales Outstanding (DSO) 84 77 22

Days Payable Outstanding (DPO) 126 77 23

Cash Conversion Cycle (DIO + DSO - DPO) -39 3 3


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Income Statement

INCOME STATEMENT (th e) 31/12/2011 31/12/2010 31/12/2009

Accounting practice IFRS IFRS IFRS

Exchange rate EUR - EUR 1 1 1

Number of months 12 12 12

Sales 212,886 236,312 248,973

Revenues growth (%) -10 -5 -

Other revenues +/- variation in inventories and contract in progress + Fixed assets

own construction capitalized67 17,204 4,598

Operating revenue / turnover 212,953 253,516 253,571

Total operating costs 260,255 259,773 259,250

Costs growth (%) 0 0 -

Service costs - - -

Material costs - - -

Costs of employees 62,171 67,382 71,598

EBITDA -35,270 1,089 1,543

Depreciation 12,032 7,346 7,222

EBIT -47,302 -6,257 -5,679

Financial P/L 23,678 3,284 2,458

Financial revenue 1,274 1,979 3,209

Financial expenses -22,404 -1,305 751

Interest paid 1,219 904 1,665

P/L before tax -23,624 -2,973 -3,221

Extr. and other P/L 0 3,386 0

Extr. and other revenue - - -

Extr. and other expenses - - -

P/L before tax + Extr. and other P/L -23,624 413 -3,221

Taxation 261 181 66

P/L for period -23,885 232 -3,287

31/12/2011 31/12/2010 31/12/2009

Costs of Good Sold 204,760 207,717 240,353

Gross Profit 8,193 45,799 13,218

Other Operating Expenses 55,495 52,056 18,897

31/12/2011 31/12/2010 31/12/2009

Cash flow -11,853 7,578 3,935

Added value 51,798 76,045 77,264

31/12/2011 31/12/2010 31/12/2009

Number of employees 1,224 1,385 -


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Evolutions and trends


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Qualitative information

Full overview The company is a public airline firm engaged in providing passenger and cargo services. It was incorporated in

September of 1947, and has its registered office in Nicosia, Cyprus. The company pursues an alliance policy which

provides its passengers with significantly wider options and simpler travel arrangements. It has alliances and co -

operation agreements with major international airlines facilitating numerous possibilities for passengers to travel

all over the world. It operates code - share flights with the following partners to provide customers with an even

wider network and increased frequencies. Partners include Alitalia, KLM, Gulf Air, Saudi Arabian Airlines, Aeroflot

and Israel Airlines. Operating a fleet of more than 10 Airbus jets, consisting of A319s, A320s and A330s, the

government - owned carrier flies to more than 30 destinations in Europe, the Middle East and Near East, and

Persian Gulf areas. The company also operates a charter airline, Eurocypria Airlines, which flies to more than 50

destinations within mainland Europe. In addition, Cyprus Airways operates duty - free shops. Its subsidiary, Zenon

NDC Ltd, provides and distributes electronic information for the travel industry through Sabre Global Distribution

System.

History Not available.

Primary business line Engaged in providing passenger and cargo services.

Secondary business line Not available.

Main activity Services.

Secondary activity Not available.

Main products and services Passenger and cargo services.

Size estimate Not available.

Strategy, organization and policy Not available.

Strategic alliances Not available.

Membership of a network Not available.

Main brand names Not available.

Main domestic country Cyprus.

Main foreign countries or regions Not available.

Main production sites Not available.

Main distribution sites Not available.

Main sales representation sites Not available.

Main customers Not available.


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Auditor/Advisor/Bank

name type address

KPMG Auditor -

JP MORGAN CHASE & CO. Banker -

EUROBANK EFG CYPRUS LTD Banker -

NATIONAL BANK OF GREECE (CYPRUS)

LIMITED

Banker -

BANK OF CYPRUS LIMITED Banker -

HELLENIC BANK LTD. Banker -

MARFIN POPULAR BANK PUBLIC COMPA-

NY LTD

Banker -

CHRYSSAFINIS & POLIVIOU Law Firm -

BANK OF CYPRUS UK LIMITED Other -

Board

name date of birth nationality function

Mr. Kikis N. Lazarides 15/03/1935 - Chairman and Managing Director, Board of Directors

Mr. Stavros Stavridis - - Chairman

Mr. Charalampos Alexandrou 22/09/1958 Cyprus Non - Executive Director

Mr. Michalakis Antoniou 21/04/1941 Cyprus Non - Executive Director

Mr. Minos Charalampous 08/12/1956 - Director/Member of the Board

Mr. Marios Chatzigavriil 27/12/1971 Cyprus Director

Mr. Andreas Chrysafis 08/03/1960 Cyprus Director

Mr. Kypros Ellinas 09/03/1959 Cyprus Non - Executive Director

Mr. Alexandros - Andreas Filippou 09/03/1938 Cyprus Non - Executive Director

Mr. Georgios Georgiou 20/09/1956 Cyprus Non - Executive Director

Mr. Kyriacos Kakouris 12/04/1959 - Director/Member of the Board

Mr. George Kallis 03/07/1954 - Non - Executive Director

Mr. Giorgos Kallis 03/07/1954 Cyprus Director

Mr. Akis Lefkariti Kiki 14/03/1957 Cyprus Director

Mr. Kikis Lefkariti Kosta 19/05/1926 - Member

Mr. Constantinos Lefkaritis 14/03/1957 - Non - Executive Director

Mr. George Mavrocostas 18/12/1951 Cyprus Director

Mr. Christos Patsalides 08/09/1954 - Non - Executive Director

Mr. Adonis Pegasiou 01/10/1979 - Director/Member of the Board

Mr. Pavlos Photiades 15/11/1964 - Member; Non - Executive Director

Mr. Panikos Pouros 29/11/1948 - Director/Member of the Board

Mr. Charalambos Tapas - - Director/Member of the Board

Mr. Achilleas Tsangaris 18/02/1954 - Director/Member of the Board

Marios Xenophontos - - Non - Executive Director

Mr. Xenophon Xenophontos 10/06/1966 - Director/Member of the Board


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Sharehoders (the first twenty shareholders ordered by Direct %)

KYPRIAKI DIMOKRATIA Rating:

Country ISO code CY Operating Revenue (MIL $) -

NACE Rev. 2, Core code - Total Assets (MIL $) -

Direct % 69.57 Number of Employees -

Total % - Information date 2010/04

Address : Not available

TRAPEZA EFG EUROBANK ERGASIAS ANONYMI ETAIREIA Rating:



Direct % 5.21 Number of Employees 0



MR GEORGE KALLIS Rating:






PHOTIADES PAVLOS PH. Rating:






LEFKARITIS CONSTANTINOS (AKIS) Rating:

Country ISO code - Operating Revenue (MIL $) -





Subsidiaries (the first twenty subsidiaries ordered by Direct %)

CYPRAIR TOURS LIMITED Rating:




Total % 100.00 Information date 2009/12


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PREDSTAVITELSTVO SAIPRUS ERVEIZ PABLIK LIMITED (KIPR) V G.MOSKVE Rating:

Country ISO code RU Operating Revenue (MIL $) -




ZENON NDC LTD Rating:





CYPRUS AIRWAYS (DUTY - FREE SHOPS) LIMITED Rating:



Direct % WO Number of Employees -


SWISSPORT CYPRUS LIMITED Rating:






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ASKMORE rating guide

General vision A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of

an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk

factors.

The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial

companies by using data included in financial statements.

The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy

model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the

model are obtained by applying newly developed numerical methodologies, drawing together financial theory,

data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective

algorithm that produces a classification of each company, by taking into account any attributes (such as sector and

country) characterizing a firm.

The model gives the opportunity to assign a rating to a company even without considering a complete data analysis

and allows to process quality information. It induces a better understanding of a company’s strength and weakness

thanks to sophisticated data mining tools and taking into account the analyst knowledge.

The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the

rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium

between the different aspects, better will be the final rating.

This is done studying, evaluating and aggregating the most important sections of the financial and economic

behavior of a company such as: profitability, liquidity, solvency, interest coverage and efficiency.


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Rating scale

Rating class Rating macro class Assessment

AAA

Healthy

The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent

economic and financial flow and fund equilibrium.

AAThe company has very strong creditworthiness. It also has a good capital structure and economic and financial

equilibrium. Difference from AAA is slight.

AThe company has a high solvency. The company is however more susceptible to the adverse effects of changes in

circumstances and economic conditions than companies in higher rated categories.

BBB

Balanced

Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial

commitments could be affected by serious unfavourable events.

BBA company rated BB is more vulnerable than companies rated BBB. Furthermore the company faces major ongoing

uncertainties or exposure to adverse business, financial, or economic conditions.

B

Vulnerable

The company presents vulnerable signals with regards to its fundamentals. Adverse business, financial, or economic

conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments.

CCC

A company rated CCC has a dangerous disequilibrium on the capital structure and on its economic and financial

fundamentals. Adverse market events and an inadequate management could affect with high probability the

company’s solvency.

CC

Risky

The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the

company’s strong disequilibrium could increase.

CThe company shows considerable pathological situations. The company’s capacity to meet its financial

commitments is very low.

D The company has not any longer the capacity to meet its financial commitments.


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Fundamental Credit Rating Ratios

Analysis area Ratio Assessment

Solvency ratios

Leverage ratioThis measures the level of total liabilities of the company in comparison

with equity.

Assets to debtThis indicates company’s solvency. The company shows a level of deficit

when the value of this ratio is under one unit.

Financial ratios Fixed Assets coverage ratioThis is calculated only for holdings. It measures the capital structure i.e.

whether a company covers the fixed assets with long term capital.

Liquidity ratios

Current ratioThis measures whether a company has sufficient short-term assets to cover

its short-term liabilities.

Quick ratioThis compares current liabilities only to those assets that can be readily

turned into cash.

Profitability and economic ratios

Return on Investement(ROI)This measures the profitability of company investments without regard to

the way the investment is financed.

Return on Equity(ROE) This measures the profitability of the equity.

Asset turnover

This indicates the investments turnover with regards to sales. The level

assumed from the ratio depends on the sector in which the company

operates.

Profit margin This indicates the profitability of sales.

Interest coverage ratio Interest Paid coverage

This indicate the ability of the company to cover interest expenses through

the economic margins (Gross profit and EBIT) and through the cash flow

from operating activities.


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MORE Credit Limit, Probability of default and Confidence Level

MORE Credit Limit MORE Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial

relationship with the analyzed company with an outlook of one year.

modeFinance used the following values associated with the company analyzed while computing the credit limit:

• Size;

• Years in Business;

• Average number of suppliers;

• Liquidity of the company and the comparison with its sector;

• The funds dedicated to be paid to suppliers;

• The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).

The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual

public data. This value should be reviewed by paying attention to the Confidence Level value and by using other

information such as other business information, news... etc; and private information such as the relationship with

client, history of payments, guarantees and the knowledge of the sector.

Probability of default e Confidence

Level

In addition to the MORE Rating, modeFinance also estimates the probability of default and provides a level of

confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go

into default.

As the probability of default is strongly affected by the economic climate that the company is operating in,

companies in the same MORE class will not necessarily have the same probability of default.

The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:

Confidence =

∑Available Information∑

Total Information

The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in

availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the

MORE rating is able to take into account for each company.

For companies with fully populated records a confidence level of 100% would be applied: companies where no

financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.


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Notes and disclaimer

NOTES modeFinance has based the present analysis on the company available financial statements, coming from one or

more of the following sources: local providers, Commercial Register (Companies House), websites, modeFinance’s

database etc.

DISCLAIMER All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of

the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot

be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will

be based on information gathered in good faith from both primary and secondary sources, whose accuracy we

are not always in a position to guarantee. As such modeFinance can accept no liability whatever for actions taken

based on any information that may subsequently prove to be incorrect.

Contacts

Company modeFinance

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Phone +39 040 3755337

Documents

Cyprus Airways: modeFinance Credit Report