Wednesday, 9 May 2018

WestJet reports first quarter net earnings of $37.2 million

Earlier this week WestJet released its first-quarter results for 2018, with net earnings of $37.2 million, or $0.32 per fully diluted share. While remaining profitable in a challenging quarter, this result compares with net earnings of $46.7 million, or $0.40 per fully diluted share reported in the first quarter of 2017. WestJet achieved its 52nd consecutive quarter of profitability and flew an all-time quarterly record of 6.1 million guests. Based on the trailing twelve months, the airline achieved a return on invested capital of 9.5 percent,  to 10.1 per cent in the first quarter of 2017.

"Even though winter 2018 brought many operational challenges, we successfully achieved record load factors and increased revenue by 6.9 per cent on a capacity increase of 4.3 per cent," Ed Sims, WestJet President and CEO. "I want to thank every individual WestJetter for rising to the challenge through a very difficult operating quarter. Nonetheless, the quarter saw net earnings and margin decline as we continue to invest in the strategy laid out at Investor Day, in a higher fuel environment. We remain laser-focused on strategic execution to ensure we drive shareholder returns."
Operating highlights (stated in Canadian dollars)

Q1 2018
Q1 2017
Change
Net earnings (millions)
$37.2
$46.7
(20.4%)
Diluted earnings per share
$0.32
$0.40
(20.0%)
Total revenue (millions)
$1,191.7
$1,114.7
6.9%
Operating margin
4.7%
7.1%
(2.4 pts.)
ASMs (available seat miles) (billions)
8.029
7.699
4.3%
RPMs (revenue passenger miles) (billions)
6.810
6.393
6.5%
Load factor
84.8%
83.0%
1.8 pts.
Segment guests
6,088,954
5,687,659
7.1%
Yield (revenue per revenue passenger mile) (cents)
17.50
17.44
0.3%
RASM (revenue per available seat mile) (cents)
14.84
14.48
2.5%
CASM (cost per available seat mile) (cents)
14.15
13.45
5.2%
Fuel costs per litre (cents)
73
64
14.1%
CASM, excluding fuel and employee profit share (cents)*
10.57
10.30
2.6%
*Refer to reconciliations in the accompanying tables for further information regarding calculations.
On May 7, 2018, WestJet's Board of Directors declared a cash dividend of $0.14 per common voting share and variable voting share for the second quarter of 2018, to be paid on June 29, 2018, to shareholders of record on June 13, 2018. All dividends paid by WestJet are, pursuant to subsection 89(14) of the Income Tax Act, designated as eligible dividends unless indicated otherwise. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit.

The Canadian airline also released its April figures showing the carrier managed a load factor of 86.0 percent, an increase of 1.2 percentage points year over year. Revenue passenger miles (RPMs), or traffic, increased 2.8 percent year over year, while capacity, measured in available seat miles (ASMs), grew 1.4 percent over the same period. WestJet welcomed an additional 100,000 guests in April, a year-over-year increase of 5.1%.

"We flew a new record of 2.1 million guests in April," said WestJet President and CEO Ed Sims. "My sincere thanks go out to each individual WestJetter for their continued dedication to delivering our award-winning brand of friendly caring service."
April 2018 traffic results

April 2018
April 2017
Change
Load factor
86.0%
84.8%
1.2 pts
ASMs (billions)
2.606
2.569
1.4%
RPMs (billions)
2.240
2.178
2.8%

Year to Date 2018
Year to Date 2017
Change
Load factor
85.1%
83.5%
1.6 pts
ASMs (billions)
10.634
10.268
3.6%
RPMs (billions)
9.050
8.571
5.6%
In April, WestJet announced two non-stop routes offering Canadian travellers even greater choices for connectivity and convenience this summer. Starting June 29, WestJet will begin service between London, Ontario and Vancouver and between Quebec City and Calgary. WestJet's limited-edition flights will be offered only during the peak summer travel season.
WestJet also officially launched service between Halifax and London Gatwick on April 30th marking the start of daily, non-stop service between the two cities. This is the first time the airline has used its newest aircraft, the Boeing 787-8 MAX for transatlantic travel.
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