If you are a Dutch or French citizen you as a member of the public own Air France-KLM shares through state (government) ownership.
As of the latest available information, the shareholding structure of Air France-KLM includes:
French State: 28.6%
Dutch State: 9.3%
China Eastern Airlines: 9.6%
Delta Air Lines: 5.8%
Employees: 2.5%
Treasury stock: 0.2%
Free float: 44.0%
Cash flows in when the company sells shares to keep the planes flying. That is the opposite of share buybacks, thus the negative number here:
SECTOR: [PASS] AF is neither a technology nor financial Company, and therefore this methodology is applicable.
SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. AF's sales of €34 000 million, based on 2023 sales, pass this test.
CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. AF's current ratio of €10 000m/€16 000m of 0.6 fails the test.
LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for AF is €18 000 million, while the net current assets are €-5 741 million. AF fails this test.
LONG-TERM EPS GROWTH: [FAIL] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. EPS for AF were negative in many of the past years and therefore the company fails this criterion.
E/P RATIO: [FAIL] [PASS] The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. (E/P > 7%) Stocks with moderate P/Es are more defensive by nature. AF's Earnings Yield is 0% as an average for the past three years. Earnings per share of EUR 0,4 last year and the current stock price EUR 7,3 result in an Earnings Yield of 5,6%.
SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. AF's sales of €34 000 million, based on 2023 sales, pass this test.
CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. AF's current ratio of €10 000m/€16 000m of 0.6 fails the test.
LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for AF is €18 000 million, while the net current assets are €-5 741 million. AF fails this test.
LONG-TERM EPS GROWTH: [FAIL] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. EPS for AF were negative in many of the past years and therefore the company fails this criterion.
E/P RATIO: [FAIL] [PASS] The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. (E/P > 7%) Stocks with moderate P/Es are more defensive by nature. AF's Earnings Yield is 0% as an average for the past three years. Earnings per share of EUR 0,4 last year and the current stock price EUR 7,3 result in an Earnings Yield of 5,6%.
GRAHAM NUMBER VALUE: [FAIL] The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price and is at 0 because the book value is negative whilst the price is 7,3 Euros. (I don't understand the Minority Interest of EUR 2 614 million.
NO DIVIDEND
Conclusion: The stock price is low compared to last year's earnings, but the question for the long term is whether any cash can or will be returned to shareholders...The last dividend payment was in 2008.
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