Danske Bank: SAS – Q3 21

SAS (MW) reported a weak Q3 21 due to continued negative impact from the covid-19 pandemic although some improvement have been noted. Revenues increased by 8% y/y to SEK4.0bn whereas EBITDA was SEK0.4bn vs. SEK-0.3bn in Q3 20. SAS reported a net loss of SEK1.4bn vs. SEK-2.4bn in Q3 20. We note that FFO was positive by SEK7m and SAS received a further SEK538m cash inflow from working capital (mainly an increase in pre-paid travels) which brought operating cash flow to SEK545m. The total cash flow for Q3 was SEK4m – which is supportive for the overall credit story. Net debt was SEK-26.8bn end-Q3 21 including lease liabilities and the equity decreased to SEK7.0bn. Cash and cash equivalent was SEK4.4bn and on top of that SAS has an undrawn SEK3.0bn credit facility which can be utilized until the end of 2022. If the improvement in the travel market continues in the coming quarters SAS should be able to eliminate any fear of additional need for liquidity. That said the delta variant could derail the re-opening and hence increase the cash burn. Overall we see the Q3 21 result as credit neutral for SAS .