1Q= First quarter...ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto...
Transcript of 1Q= First quarter...ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto...
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
FIRST QUARTER RESULTS 2017
KEY RESULTS
In the 1Q17 Interjet total revenues added $4,421.5 million pesos that
represented an increase of 14.8% over the income generated in the 1Q16.
In the 1Q17, operating income loss of $ 477.7 million pesos, with a negative
margin of 10.8%.
In 1Q17, EBITDAR decreased $ 573.3 million pesos compared to the same
period of 2016, reaching $ 530.6 million pesos with a margin of 12.0%, in
relation to total revenue.
INTERJET recorded a net loss of $ 596.6 million pesos in 1Q17, compared to a net income of $ 203.9 million pesos in the same period of 2016.
1Q= First quarter
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
Below is a summary of the selected consolidated and operating information, which is derived from the comparison of Interjet´s audited consolidated financial information for the first quarter of 2017 vs. 2016.
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
Market environment INTERJET operated during the 1Q17 in an environment defined by the following factors:
Depreciation of the average exchange rate. The closing exchange rate
for the quarter recorded a depreciation of the peso against the US dollar of
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
8.4% compared to the same period of 2016, going from $ 17.2509 pesos
per US dollar at 1Q16 to $ 18.7079 pesos per US dollar at 1Q17.
Increase in fuel prices in pesos. During the period January-March 2017
the average price of fuel per liter paid by INTERJET increased by 56.3%
compared to the same period in 2016, reaching an average price per liter of
$ 9.48 compared to $ 6.06 average per liter in 1Q16.
Slight economic growth. During the 2017 the Mexican economy showed a
slight recovery in the pace of economic growth. The General Indicator of
Economic Activity (IGAE) in 2017 grew 0.1% compared to the same period
of 2016.
Growth of passenger traffic in the domestic industry. According to
figures published by the DGAC, the passenger market for Mexican airlines
increased by 13.0% in the 1Q17 over the previous year. The volume of
passengers in the domestic market increased 11.6%, while the international
market grew 17.5%.
Revenue
In the 1Q17 INTERJET total revenue increased 14.8% from $ 3,850.8 million
pesos in the 1Q16 to $4,421.5 million pesos in the 1Q17. This increase was mainly
due to an increase in passenger revenue.
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
Passenger revenue increased 13.1% from $ 3,563.5 million pesos in the 1Q16 to
$4,030.2 million pesos in 1Q17, mainly due to a higher volume of passengers
transported, given the airline's international expansion; although the Holly and
Easter weeks in 2016 were in 1Q16, and this year, seasonality will be reflected in
the second quarter. In addition, this increase was partially offset by the negative
impact on the sales caused by the safety precautionary measure requested in the
guidance issued by the Russian Aeronautical Authority December 2016, in relation
to the line of aircraft SSJET100 worldwide.
The seats supply (ASK's) increased by 29.5% in the 1Q17 compared to the same
period of 2016, mainly due to the opening of new routes and an increase of
operations by the planned expansion of the Company through incorporating new
fleet.
Other income increased 36.2%, from $ 287.4 million pesos in the 1Q16 to $ 391.3
million pesos in the 1Q17, mainly due to higher income as a result of the recent
launch of the strategy of charging for ancillaries not included in the basic rate.
Operating expenses
Operating expenses increased 36.9%, from $3,580.0 million pesos in the 1Q16 to
$4,899.3 million pesos in the 1Q17. This increase was mainly due to a 56.3%
increase in fuel prices due to an increment in operations because of the
incorporation of aircrafts that caused higher expenses of: maintenance, airport
operating and landing fees, aircraft rent and expenses Inherent to the expansion of
operations, as well as the impact of the devaluation of the peso against the dollar.
At the end of 1Q17 the company operated 22 SSJ100, 45 A320's and 3 A321's.
The unit cost per ASK in pesos (CASK) increased 5.7% in relation to 1Q16, as a
result of higher expenses for additional operations, increase in fuel prices, a larger
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
fleet and international expansion, partially offset by the income generated through
the new routes. On the other hand, the CASK excluding fuel decreased 6.8% over
the same period of the previous year, as a result of the implementation of the
control of expenses program, and a greater supply of ASK's.
Fuel expenses on the 1Q17 increased by 99.5% from $735.1 million pesos in
1Q16 to $1,466.4 million pesos in the same period of 2017, mainly due to the
increase of 56.3% in the price per liter of fuel paid by the Company reaching an
average price per liter of $9.48 in the 1Q17 compared to $6.06 of 1Q16, mainly
due to the impact of the devaluation of the peso against the dollar and the increase
of operation specially in the international routes.
Maintenance expenses increased 12.4% from $415.5 million in 1Q16 to $467.0
million in 1Q17 as a result of higher services to our fleet, the increase of operations
for new routes, the increase in our fleet and the impact of the devaluation of the
peso against the dollar. The increase was partially offset by the reversal of excess
maintenance provisions.
The costs for Airport operating and landing fees increased 29.8% from $577.4
million pesos in the 1Q16 to $749.4 million pesos in the 1Q17 as a result of an
increase in the number of operations during the 1Q17 mainly in the international
market compared to the same period of 2016. Likewise, this item was negatively
impacted by the effect of the event of the directive issued by the Russian
Aeronautical Authority last December, as well as by the impact of the devaluation
of the peso against the dollar.
Expenses for wages, salaries and crew benefits increased 30.0%, from $317.2
million pesos in 1Q16 to $412.4 million in 1Q17, mainly due to the increase of
28.2% in number of crew employees, going from 1,359 in 1Q16 to 1,742 in the
same period of 2017, that included an increase in training and travel expenses, as
a result of the additional aircraft that were added in this period.
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
Selling and advertising expenses increased 6.3% from $332.7 million pesos in the
1Q16 to $353.5 million pesos in the 1Q17 as a result of an increase in advertising
to promote new routes and of higher bank fees due to the increase in sales.
The technology and administrative expenses increased 6.4% to $323.3 million
pesos in the 1Q16 to $344.1 million pesos in the 1Q17 as a result of the impact of
the devaluation of the peso against the dollar.
Aircraft and engine rents increased 32.3% from $515.8 million pesos in the 1Q16
to $682.1 million pesos in the 1Q17 reflecting the effect of the depreciation of the
peso against the dollar, considering that the aggregate of our rents is in dollars,
and the increase in the leased fleet.
Depreciation expenses increased 2.8% from $317.2 million pesos in the 1Q16 to
$326.2 million pesos in the 1Q17 as a result of an addition of 2 aircrafts to our
fleet.
EBITDAR
EBITDAR decreased 51.9% from $1,103.8 million pesos in the 1Q16 to $530.6
million pesos in the 1Q17. The EBITDAR margin reached 12.0% in the 1Q17
compared to the 28.7% regarding the same period of 2016.
Operating Income
In 1Q17, operating income went from a profit of $270.9 million pesos in 1Q16 to a
loss of $477.7 million pesos in 1Q17. This was mainly due to the increase in the
Company's revenues, which was exceeded due to the increase in operating
expenses, mainly due to the increase in the cost of fuel mentioned above.
Comprehensive financing cost
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
Comprehensive financing cost increased 73.7%, from a cost of $66.0 million pesos
in 1Q16 to a cost of $114.7 million in 1Q17, as a result of higher interest paid due
to the increase of dollar bank debts for the acquisition of flight equipment, partially
offset by favorable foreign exchange effects due to the depreciation of the peso
against the US dollar.
Net Income
INTERJET reflected a net loss of $596.6 million pesos in 1Q17, compared to a net
profit of $203.9 million pesos regarding the same period of 2016.
Comments to the statement of financial position and liquidity
As of March 31 2017, the Company had $1,368.1 million pesos in cash and cash
equivalents.
The net cash generated by operating activities in 1Q17 amounted $1,024.9 million
pesos.
Net cash used in investing activities mainly reflects payments for maintenance and
aircraft investments in accordance with the Company's business plan.
The net cash used in financing activities reflects higher bank loans for the
acquisition of aircraft and for working capital.
Relevant Event
As of January 6, 2017, the Shareholders' Meeting approved a capital increase in
the amount of $4,000.00 million pesos, which will be subscribed during the first
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
semester of 2017. Giving effect to this subscription in stockholders' equity as of
March 31 of 2017, the amount of stockholders' equity after the aforementioned
subscription will be $8,084.6 million pesos. The sources of this subscription will be
mainly applied to the reduction of financial borrowings. Below is a Proforma
summarized balance sheet, giving effect to this capital contribution:
1Q17 CAPITALIZATION1Q17
PROFORMA
4,529,950 4,529,950
29,289,116 29,289,116
33,819,066 33,819,066
14,702,253 -4,000,000 10,702,253
15,032,167 15,032,167
29,734,420 25,734,420
4,084,646 4,000,000 8,084,646
33,819,066 33,819,066
LONG-TERM LIABILITIES
TOTAL LIABILITIES
STOCKHOLDER'S EQUITY
Unaudited Summarized Condensed Consolidated Interim Statements of Financial Position as of
March 31 2017, giving effect to the increase in capital described above would be as follows:
CURRENT ASSETS
LONG TERM ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Investor Relations Contact: Raul Lopez/CFO/+52 (55) 91785512
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
March 31, 2017 December 31, 2016
(Audited)
Assets
Current assets:
Cash and cash equivalents $ 1,368,133 $ 1,390,741
Accounts receivable 2,023,534 1,057,816
Recoverable taxes, mainly income tax and value-added tax 418,983 267,954
Inventories 165,476 159,248
Prepaid expenses 553,824 511,231
Total current assets 4,529,950 3,386,990
Advance payments to purchase flight equipment 1,559,762 1,636,087
Flight equipment, leasehold improvements, and furniture and equipment -
Net 19,957,996 21,545,951
Prepaid maintenance 6,373,092 6,967,318
Deferred tax assets 38,110 57,930
Other assets - Net 185,925 180,425
Concession 43,797 43,797
Deposits on aircraft leases 1,130,434 1,220,649
Total $33,819,066 $35,039,147
Liabilities and stockholders’ equity
Current liabilities:
Notes payable to financial institutions $ 7,142,788 $ 6,912,395
Provision of maintenance and retirement conditions 774,895 857,747
Accounts payable 2,934,005 3,339,696
Other accounts payable and accrued expenses 1,656,618 907,420
Payable taxes other than income taxes 504,037 239,703
Air traffic liability 1,689,910 1,277,572
Total current liabilities 14,702,253 13,534,533
Notes payable to financial institutions 10,709,566 12,083,702
Long-term debt 1,716,965 1,896,501
Employee benefits and other deferred liabilities 11,423 11,423
Provision of maintenance and retirement conditions 2,594,213 2,871,588
Total liabilities 29,734,420 30,397,747
Stockholders’ equity:
Capital stock 900,000 900,000
Contributions for future capital increases 5 5
Translation effects of foreign operation 944,876 904,984
Retained earnings 2,197,261 2,796,975
Controlling interest 4,042,142 4,601,965
Noncontrolling interest 42,504 39,435
Total stockholders’ equity 4,084,646 4,641,400
Total $33,819,066 $35,039,147
ABC Aerolíneas, S.A. de C.V. and Subsidiaries
Unaudited Consolidated Statements of Financial Position
As of March 31, 2017 and December 31, 2016
(In thousands of Mexican pesos)
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
2017 2016
Operating revenues:
Passengers 4,030,222 3,563,462
Other 391,295 287,374
4,421,517 3,850,836
Operating expenses:
Aircraft fuel 1,466,366 735,113
Maintenance and return conditions 466,982 415,530
Airport operating and landing fees 749,435 577,361
Wages, salaries and benefits 412,429 317,172
Insurance and passenger service 98,085 45,781
Selling 353,548 332,741
Administrative and other 344,101 323,316
Flight equipment rentals 682,123 515,773
Depreciation and amortization 326,185 317,167
4,899,254 3,579,954
Gross Profit (477,737) 270,882
Comprehensive f inancing cost:
Interest income 10,817 8,220
Interest expense (268,576) (195,554)
Exchange gain-net 143,081 121,305
(114,678) (66,029)
Profit before income taxes (592,415) 204,853
Income taxes expense 4,231 946
Consolidated net profit (596,646) 203,907
ABC Aerolineas, S.A. de C.V. and Subsidiaries
Unaudited Consolidated Statements of Profit or Loss
For the three months ended March 31, 2017 and 2016
(In thousands of Mexican pesos)
Three months ended March 31
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
Capital
Stock
Contributions
for future
capital
increases
Cumulative
translation
adjustments
Retained
earnings
Non controlling
interestsTotal
Balances as of December 31, 2014 $900,000 $5 $101,012 $2,127,472 $20,021 $3,148,510
Comprehensive Income:
Cumulative translation adjustments of foreign
operations - - 174,207 - - 174,207
Consolidated Net income for the year - - - 400,976 10,917 411,893
- - $174,207 $400,976 $10,917 $586,100
Balances as of December 31, 2015 $900,000 $5 $275,219 $2,528,448 $30,938 $3,734,610
Comprehensive Income:
Cumulative translation adjustments of foreign
operations - - $629,765 - - $629,765
Consolidated Net income for the year - - - 268,528 8,497 277,025
- - 629,765 268,528 8,497 906,790
Balances as of December 31, 2016 $900,000 $5 $904,984 $2,796,976 $39,435 $4,641,400
Comprehensive Income:
Cumulative translation adjustments of foreign
operations - - 39,892 - - 39,892
Consolidated Net income for the year - - - (599,715) 3,069 (596,646)
- - 39,892 (599,715) 3,069 (556,754)
Balances as of March 31, 2017 $900,000 $5 $944,876 $2,197,261 $42,504 $4,084,646
ABC Aerolineas, S.A. de C.V. and Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity
For the years ended December 31, 2016 and March 31,2017
(In thousands of Mexican pesos)
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
March 31, 2017 March 31, 2016
Cash flows from operating activities:
Net profit for the year (596,646) 203,904
Adjustments for:
Income tax expense recognized in net income 19,820 (32)
Depreciation and amortization for non-current assets 326,185 317,167
Provision of maintenance and retirement conditions (360,227) (38,848)
Interest expense 268,576 195,554
Unrealized foreign exchange gain 1,422,398 15,644
Movements in working capital:
(Increase) decrease in accounts receivables (965,718) (533,487)
(Increase) decrease recoverable taxes, mainly income tax and value-added tax (151,029) 8,761
(Increase) decrease in inventories (6,228) 52,543
(Increase ) decrease in prepaid expenses (42,593) (231,812)
(Increase ) decrease in deposits on aircraft leases 90,215 (50,159)
Increase (decrease) in accounts payables (405,691) 10,995
Increase (decrease) in other accounts payable and accrued expenses 749,148 309,732
Increase (decrease) in income taxes paid 264,334 14,735
Increase (decrease) in air traffic liability 412,338 111,508
Increase (decrease) in employee benefits (2,797)
Net cash generated by operating activities 1,024,932 383,408
Cash flows from Investing activities:
Flight equipment, adapatations, leasehold improvements,
and furniture and equipment (120,736) (423,000)
Advance payments to purchase aircraft 76,325 (16,100)
Other assets (5,500) (7,800)
Prepaid maintenance 594,226 (124,700)
Net cash used in investing activities 544,315 (571,600)
Cash flows from financing activities:
Loans received (1,323,279) (18,029)
Interest paid (268,576) (195,554)
Net cash generated by financing activities (1,591,855) (213,583)
Effects from exchange rate changes 0 0
Net decrease in cash and cash equivalents (22,608) (401,823)
Cash and cash equivalents at the beginning of the year 1,390,741 2,020,209
Cash and cash equivalents at end of the year 1,368,133 1,618,386
ABC Aerolíneas, S.A. de C.V. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(In thousands of Mexican pesos)
For the three months ended March 31, 2017 and 2016
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
Glossary
ASK
Means, (available seat kilometer).
Represents the total number of seats flown by an airline multiplied by the number of kilometers
flown.
RPK
Means, (revenue passenger kilometer)
Represents the number of kilometers flown by paying customers.
Load Factor
It means the total seats filled airplane seats average.
It is determined by dividing the total RPK's between ASK's.
YIELD
It means performance indicator of pesos per kilometer.
YIELD POR RPK
It is determined by dividing passenger revenues divided by RPK's.
RASK
Means, (Revenues per Available Seat Kilometer)
It is determined dividing the TOTAL INCOMES between ASK's.
CASK
Means (Cost of Available Seat Kilometer)
Unitary average cost calculated by dividing total operating expenses by ASKs
CASK excluding fuel
It is determined by dividing total expenses, less fuel consumption, including ASK's.
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.