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Finnair slumps into the red; Stockmann issues profit warning

Two well-known Finnish brands offered downbeat news on Thursday.

Stockmannin tavaratalon sisäänkäynti Pietarissa
Stockmann is in the process of selling off its last business in Russia, St Petersburg's Nevsky Centre. Image: Anatoly Maltsev / EPA

National air carrier Finnair's result for the first three months of the year dropped into the red, showing a loss of 16.2 million euros – outweighing its profit of 14.6 million euros in the same period of last year.

Turnover was up by around five percent at around 670 million euros. However profits were undercut by higher costs due to increased capacity and pricier fuel, the airline said in a statement on Wednesday.

On the other hand, Finnair said that its cargo business grew briskly, bucking the general trend in the industry.

Last week Finnair was rapped by the consumer claims firm AirHelp, which said the airline was nearly the worst in its class in terms of punctuality and reimbursement policies. It also recently fired a pilot found to have been drunk on the job.

Stockmann downplays expectations

Meanwhile the department store chain Stockmann issued a profit warning on Thursday. The retailer rescinded its earlier prediction of improved profits for this year, now saying that results will be poorer than expected this year.

The company expects core profits to be about the same as last year, just over 10 million euros, but that is not including the Nevsky Centre shopping mall in St Petersburg, which the company is in the process of selling off.

Last autumn, Stockmann signalled its departure from the Russian market. Its real estate division announced plans to sell Nevsky Centre to a Russian firm for 171 million euros. The nine-year-old shopping centre has some 90 retail and office space tenants.

The company still has four department stores in the Helsinki region, as well as one each in the southern cities of Tampere and Turku.

While the group says the outlook for Stockmann Retail has weakened, it expects the Lindex chain, which sells clothing for women and children to "continue its steady performance".

In recent years Stockmann has sold off its Herkku food shops and Akateeminen bookstores.

Stockmann will release its first-quarter results next Tuesday.

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