Lower costs help a LOT

The company puts the growth in profit down to lower costs and increased income from financial operations.

LOT's profits for the first nine months of this year rose to zł.194.7 million from zł.78.8 million last year, despite a 6.5-percent fall in revenue from core business to zł.2.16 billion from zł.2.31 billion a year earlier.

In addition LOT posted a zł.70.1-million income from financial operations, mainly by hedging on fuel and the exchange rate.

LOT chief executive Marek Grabarek said that the company forecasts full-year profits of more than zł.100 million from its core business, juxtaposed with a zł.157 million profit for the first nine months of the year due to the seasonable nature of the industry.

The company's figures also benefited from a cost-cutting program that was implemented last year. By 2006 the airline aims to have cut costs  by zł.500 million.

Grabarek also reiterated LOT's intention to float itself on the Warsaw Stock Exchange in 2006.

Poland's Treasury currently owns a 67.96-percent stake in LOT. A 25.1-percent stake formerly owned by now bankrupt airline SwissAir is currently in the hands of a court-appointed receiver. The remaining shares are held by company employees.

The IPO would involve a capital increase and the sale of SwissAir's former stake. (Reuters)