Cebu Air, Inc. 1st Quarter 2016 Results of Operations · 1Q15 2Q15 3Q15 4Q15 1Q16 Passengers...
Transcript of Cebu Air, Inc. 1st Quarter 2016 Results of Operations · 1Q15 2Q15 3Q15 4Q15 1Q16 Passengers...
cebupacificair.com
Cebu Air, Inc.1st Quarter 2016Results of Operations
Disclaimer
16 May 2016 2
This information provided in this presentation is provided only for your reference. Such information has not been independently verified and, as such, is not guaranteed to be accurate nor complete. Neither Cebu Air, Inc. (“CEB” or the “Company”) nor any of its affiliates, shareholders, directors, employees, agents or advisers makes expressed or implied representations or warranties as to the accuracy or completeness of the information contained herein and neither of them shall accept any responsibility or liability (including any third party liability) for any loss or damage, whether or not arising from any error or omission in compiling such information or as a result of any party’s reliance or use of such information. The information and opinions in this presentation are subject to change without notice.
EBITDAR, EBITDA, EBITDAR Margin, EBIT and core net income are not measures of performance under the Philippine Financial Reporting Standards (“PFRS”), and should not be considered in isolation or as alternatives to net income as an indicator of CEB’s operating performance or to cash flow from operating, investing and financing activities as a measure of liquidity, or any other measures of performance under PFRS. Because there are various EBITDAR, EBITDA, EBITDAR Margin, EBIT and core net income calculation methods,CEB’s presentation of these measures may not be comparable to similarly titled measures used by other companies.
This presentation also contains certain “forward-looking statements.” These forward-looking statements include words or phrases such as CEB or its management “believes”, “expects”, “anticipates”, “intends”, “plans”, “foresees”, or other words or phrases of similar import. Similarly, statements that describe CEB’s objectives, plans or goals are also forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Such forward looking statements are made based on management’s current expectations or beliefs as well as assumptions made by, and information currently available to, management. There is no assurance that expectedevents will occur, that projections will be achieved, or that the Company and its management’s assumptions are correct.
Business Updates
4.3 4.9
4.4 4.7 4.8
5.4 5.8
5.5 5.5 5.6
1Q15 2Q15 3Q15 4Q15 1Q16
Passengers Capacity
Operating Statistics
16 May 2016 4
• CEB flew 4.8M passengers in 1Q16, up 13.0% YOY
• SLF posted at 86.7% from 78.9% in 1Q15
• ASK grew 8.0% to 6.5B while RPK grew faster to 5.4B, up 19.5% YOY
• We utilized our airbus fleet 12.6 hours per day and turned them 6.2x per day
• On-time performance (OTP) posted at 62.5% for 1Q16
• As of March 31, 2016: 64 destinations, 98 routes, and 2,641 weekly flights
LoadFactor
78.9%
Passenger and capacity in millions
84.5% 80.8% 86.0% 86.7%
Domestic Market
16 May 2016 5
• Highest market share at 59.0% in 1Q16(1)
• Most number of passengers carried and highest load factor
• Competitive performance index above 1 and highest among all carriers
• 34 destinations, 56 routes, and 2,147 weekly flights
(1)1Q16 figures are based on internal estimates, the rest are from CAB
11.1% 11.2% 11.2%
28.9% 28.6% 29.3%
59.5% 59.6% 59.0%
FY15 1Q15 1Q16
Average Domestic Market Share
CEB Group
PAL Group
AirAsia Group
CEB joins the world’s first pan-regional LCC alliance
Short Haul International
• SLF posted at 80.8% in 1Q16, up 3 ppts from 77.7% in 1Q15
• 25 short haul destinations, 37 routes, and 452 weekly flights
• Cebu Pacific and Cebgo, together with seven other low cost carriers in the region, form Value
Alliance, the world’s largest LCC alliance.
• Firmed by 9 market champions, Value Alliance brings extensive networks together:
1. Cebu Pacific 4. Nok Air 7. Tigerair Singapore
2. Cebgo 5. NokScoot 8. Tigerair Australia
3. Jeju Air 6. Scoot 9. Vanilla Air
16 May 2016 6
Destination Seat Share(1)
Hong Kong 29.5%
Singapore 32.9%
China 20.3%
(1) From CAPA route capacity data for week of May 2, 2016
Long Haul International
16 May 2016 7
(1) From CAPA route capacity data for week of May 2, 2016
Destination Seat Share(1)
Dubai 31.3%
Sydney 38.5%
Kuwait 76.2%
Riyadh 18.8%
Doha 14.6%
• Long haul posted 74.5% SLF in 1Q16, up 13.9 ppts from 60.6% in 1Q15
• 5 long haul destinations, 5 routes, and 42 weekly flights
• Increase in Manila-Doha flights from 2x weekly to 3x weekly in July
Financial Results
1Q15 1Q16YOY
ChangeTotal Revenue (Php Million) 14,198 16,106 13.4%
Passenger Revenue 10,808 12,022 11.2%Ancillary Revenue 2,618 3,248 24.1%Cargo Revenue 773 836 8.3%
Average Yield per Passenger 3,137 3,158 0.7%Average Fare 2,525 2,486 -1.6%Ancillary/Passenger 612 672 9.8%
Cargo Yield per kg 21 24 10.5%
Cost/ASK (CASK) 1.887 1.827 -3.2%CASK ex-Fuel 1.169 1.274 8.9%
(PHP million)EBITDAR 5,162 7,054 36.7%EBIT 2,831 4,218 49.0%Pre-tax Core Net Income 2,565 4,000 55.9%Net Income 2,225 4,037 81.4%
MarginsEBITDAR Margin 36.4% 43.8% 7.4 pptsEBIT Margin 19.9% 26.2% 6.3 pptsPre-tax Core Net Income Margin 18.1% 24.8% 6.8 pptsNet Income Margin 15.7% 25.1% 9.4 ppts
Income Statement Highlights
16 May 2016 9
CASK down 3.2% from last year, driven by decline in fuel prices:
• Average MOPS down 39% from $68.98/bbl in 1Q15 to $42.10/bbl in 1Q16
CASK ex-Fuel up 8.9% driven by:
• Peso depreciation from P44.42/USD in 1Q15 to P47.27/USD in 1Q16 which also increased fuel, maintenance, and aircraft and traffic servicing costs, among others
• Higher asset retirement obligation estimates and accruals
• Higher aircraft and traffic servicing costs from growing international operations
Balance Sheet Highlights
16 May 2016 10
As at Dec 31, As at Mar 31,Php Millions 2015 2016
Current assets 9,763 13,076Noncurrent assets 75,066 77,283Total Assets 84,829 90,359
Total debt(1) 36,589 37,336Other liabilities 23,284 24,031Total Liabilities 59,873 61,367Total Equity 24,955 28,992
Net debt-to-equity(2) 1.28x 0.99xAdjusted net debt-to-equity(3) 2.48x 2.07xCash-to-sales-LTM ratio 8% 15%Forex, closing 47.06 46.07
• Cash level at P4.7B in 2015 vs. P8.6B in 1Q16
• Property and equipment at P74.5B vs. P72.1B in 2015 due to two A320 aircraft additions and 1 A319 disposal
NOTE:(1) Includes current and noncurrent portion of long-term debt(2) Net debt is total debt less cash and cash equivalents(3) Adjusted net debt is net debt plus capitalized lease and ARO liability
Cash Flows
16 May 2016 11
Php Millions 1Q2016CASHFLOWS FROM OPERATING ACTIVITIESIncome after noncash adjustments 5,814Net changes in working capital 1,224Interest and taxes paid – net (344)Net cash provided by operating activities 6,694
CASHFLOWS FROM INVESTING ACTIVITIESAcquisition of and proceeds from disposal of property and equipment and other noncurrent assets (4,306)Increase in investment in joint venture (50)Net cash used in investing activities (4,356)
CASHFLOWS FROM FINANCING ACTIVITIESAvailments of long term debt 3,421Repayments of long term debt (1,844)Net cash provided by financing activities 1,577
Net foreign exchange difference (40)
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,876CASH AND CASH EQUIVALENTS, beginning 4,706
CASH AND EQUIVALENTS, END 8,582
Outlook
Fuel, Forex and, Forward Bookings
Fuel
• As of May 13, 2016, Jet Kero at $53.84/bbl
from $43.44/bbl in December 31, 2015
• Hedge ratio at 34% for 2016, 30% for 2017,
and 11% for 2018.
Forex
• As of May 13, 2016, USDPHP at 46.56, from
47.06 in December 31, 2015
• We have no outstanding FX hedges.
Forward bookings
• As of May 16, 3-month forward bookings are at
27.6% of total available seats. Total bookings
for the period is up by 12.3% YOY
16 May 2016 13
Data source: Bloomberg
Data source: Bloomberg
44
45
46
47
48
49
LTM USDPHP Closing Rates
30
40
50
60
70
80
90
LTM Jet Kero Spot Price Index
Fleet Expansion
• Current fleet of 57: 36 A320, 7 A319, 8 ATR 72-500, and 6 A330
• Remaining order book of 2 A320, 30 A321 NEO, and 16 ATR 72-600
• For balance of 2016 to 2022:
• 2 A320 CEO for delivery in 2017• 7 A319 to be sold between 2016-2018• 7 A320 for lease return in 2018-2019• 16 ATR 72-600 for delivery from 2016-2020• 30 A321 NEO to be delivered between 2017-2021
16 May 2016 14
Ave. fleet age(1)
4.82 years
(1) As of May 12, 2016
8 4 1 -
33 36 38 36
- - 3 15 6 6 6
6 8 10 11
12 55 56 59
69
2015 2016 2017 2018
A319 A320 A321 A330 ATR
cebupacificair.com
Thank you