Wednesday, 14 November 2018

October results for Chorus Aviation announced


Chorus Aviation today announced third quarter financial results for the period ended September 30th, 2018. "Our business delivered solid performance in the third quarter of this year," said Joe Randell, President and Chief Executive Officer, Chorus.  "Our financial performance in the third quarter generated over $87.0 million in adjusted EBITDA, a $3.4 million or 4.0% increase over third quarter 2017 due primarily to growth in aircraft leasing.  Net income per basic share was $0.31."

Key month highlights
    Net income of $43.7 million, or $0.31 per basic share, inclusive of an unrealized foreign exchange gain of $14.0 million.
    Adjusted net income1 of $30.8 million, or $0.22 per basic share, a decrease of $18.0 million, of which $12.6 million was driven by changes in tax rates in 2017.
    Adjusted EBITDA1 of $87.1 million, an increase of $3.4 million or 4.0% primarily due to increased earnings from aircraft leasing.
    Continued execution on aircraft leasing strategy with the addition of three new customers and growth in third-party fleet to 33 aircraft, of which five will be delivered over the course of 2019.
    Expanded maintenance, repair and overhaul ('MRO') certifications to include Embraer 135 and 145 aircraft.
    Added airBaltic as a third-party airframe maintenance customer.
    Diversified parts provisioning offerings with the addition of Q400 inventory.
    Completed the eighth Extended Service Program ('ESP') on a Dash 8-300 aircraft.


"The Chorus team executed on our diversification strategy securing leasing and maintenance, repair and overhaul contracts with new international customers," continued Mr. Randell. "The addition of Philippine Airlines, Lion Air and JamboJet extends our aircraft leasing customer base into 13 countries and marks our first transactions in Southeast Asia, a market we believe has good potential for additional aircraft placements."

"Once these recently announced transactions are completed, we will have acquired aircraft valued at approximately $730.0 million USD to date, excluding the CPA aircraft, and secured additional, long-term lease revenue streams," remarked Mr Randell.

"We also gained traction on the MRO front," commented Mr Randell. "We were very pleased to welcome airBaltic to our portfolio of third-party maintenance customers to conduct airframe maintenance on 12 Q400s.  Further, we obtained Transport Canada certification to perform MRO work on Embraer 135 and 145 aircraft diversifying our capabilities beyond Bombardier products.  This, in addition to expanding our parts provisioning inventory to now include highly marketable Q400 parts, supports our mission to provide a complete suite of support services to regional operators worldwide."

"I'm confident in our pipeline for future growth opportunities, and I extend my gratitude to our team of exceptional professionals for embracing our vision," concluded Mr Randell.


Third Quarter Summary


(unaudited)(expressed in thousands of Canadian dollars)
Three months ended September 30,
2018
$
2017
$
Change
$
Change
%





Operating revenue
366,696
343,685
23,011
6.7
Operating expenses
310,669
287,673
22,996
8.0
Operating income
56,027
56,012
15
Non-operating (expenses) income
(2,797)
20,208
(23,005)
(113.8)
Income before income taxes
53,230
76,220
(22,990)
(30.2)
Income tax (expense) recovery
(9,508)
3,085
(12,593)
(408.2)
Net income
43,722
79,305
(35,583)
(44.9)
Add (Deduct) items to get to Adjusted net income(1)




Unrealized foreign exchange gain
(13,982)
(31,088)
17,106
(55.0)
Employee separation program
1,098
583
515
88.3

(12,884)
(30,505)
17,621
(57.8)
Adjusted net income(2)
30,838
48,800
(17,962)
(36.8)
Add (Deduct) items to get to Adjusted EBITDA(1)




Net interest expense
13,987
11,632
2,355
20.2
Income tax expense (recovery)
9,508
(3,085)
12,593
(408.2)
Depreciation and amortization
29,950
27,149
2,801
10.3
Foreign exchange loss (gain)
2,598
(749)
3,347
(446.9)
Loss (gain) on disposal of property and equipment
194
(3)
197
(6566.7)

56,237
34,944
21,293
60.9
Adjusted EBITDA(2)
87,075
83,744
3,331
4.0





(1)
These items are excluded because they affect the comparability of our financial results, period-over-period,
and could potentially distort the analysis of trends in business performance.
(2)
This is a non-GAAP measure. 

Year-to-Date Summary


(unaudited)(expressed in thousands of Canadian dollars)
Nine months ended September 30,
2018
$
2017
$
Change
$
Change
%





Operating revenue
1,092,531
996,167
96,364
9.7
Operating expenses
937,540
873,282
64,258
7.4
Operating income
154,991
122,885
32,106
26.1
Non-operating (expenses) income
(63,859)
32,177
(96,036)
(298.5)
Income before income taxes
91,132
155,062
(63,930)
(41.2)
Income tax expense
(26,163)
(7,742)
(18,421)
237.9
Net income
64,969
147,320
(82,351)
(55.9)
Add (Deduct) items to get to Adjusted net income(1)




Unrealized foreign exchange loss (gain)
16,613
(63,226)
79,839
(126.3)
Foreign exchange gain on cash held for deposit
(1,646)
1,646
100.0
Employee separation program
5,147
9,365
(4,218)
(45.0)

21,760
(55,507)
77,267
(139.2)
Adjusted net income(2)
86,729
91,813
(5,084)
(5.5)
Add (Deduct) items to get to Adjusted EBITDA(1)




Net interest expense
41,449
30,170
11,279
37.4
Income tax expense
26,163
7,742
18,421
237.9
Depreciation and amortization
89,557
71,747
17,810
24.8
Foreign exchange loss
6,111
3,028
3,083
101.8
(Gain) loss on disposal of property and equipment
186
184
2
1.1
Other
(500)
(687)
187
(27.2)

162,966
112,184
50,782
45.3
Adjusted EBITDA(2)
249,695
203,997
45,698
22.4






(1)
These items are excluded because they affect the comparability of our financial results, period-over-period,
and could potentially distort the analysis of trends in business performance.
(2)
This is a non-GAAP measure. 

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