ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
THIRD QUARTER RESULTS 2016
KEY RESULTS
In the 3Q16 Interjet total revenues added $4,784.4 million pesos that
represented an increase of 16.1% on income generated in the 3Q15.
During the 9M15, total revenue added $12,746.0 million pesos, representing
an increment of 18.1% over the income generated in 9M15.
In the 3Q16 operating income decreased 70%, to $98.9 million pesos with a
margin of 2.1%, regarding the same period of the previous year. The operating income during the 9M16 decreased 25% from $708.4 million pesos in the 9M15 to $531.0 million pesos in 9M16.
In the 3Q16 EBITDAR incremented 4.5% compared to the same period of 2015, reaching $ 995.9 million pesos with a margin of 20.8%, regarding total revenue. During the 9M16 EBITDAR incremented 17.7% compared to the same period of 2015, reaching $3,092.0 million pesos, with a margin of 24.3% regarding total revenue.
INTERJET reported net income of $49.6 million pesos during 3Q16, representing a decrease of 16.0% regarding the same period of 2015. During the 9M16, Interjet registered net income of $315.1 million pesos, representing an increase of 59.2% regarding the same period of 2015.
3Q= Third quarter y 9M= Nine Months
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
The following is a summary of financial and operational selected consolidated information, which is derived from a comparison of internal unaudited consolidated financial statements INTERJET´s third quarter of 2016 vs. 2015.
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
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 3Q16 in an environment defined by the following factors:
Depreciation of the average exchange rate. The closing exchange rate
for the quarter recorded depreciation against the dollar of 13.7% compared
to the end of 3Q15, going from $ 17.0771 pesos per dollar at the end of
3Q15 to $ 19.4086 pesos per dollar at the end of 3Q16.
Increment in fuel prices. During the period July-September 2016 the
average fuel price per liter paid by INTERJET incremented 3.8% compared
to the same period of 2015, reaching an average price per liter of $ 7.93
compared to $ 7.64 average per liter in the 3Q15.
Slight economic growth. During the 3Q16 the Mexican economy showed
a slight recovery in the pace of economic growth. The General Indicator of
Economic Activity (IGAE) from January to July grew 2.3% annually.
Slower growth of passenger traffic in the domestic industry. According
to figures released by the “Dirección General de Aeronáutica Civil” (DGAC)
it was observed growth of 13.2% in passenger traffic of Mexican industry
during the period of July to September of 2016 compared to the same
period of the previous year. Passenger traffic in the domestic market grew
12.5% in the 3Q16 compared to the same period of the previous year. The
passenger on international flights increased 15.6% over the same period of
2015.
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
Revenues
In the 3Q16 INTERJET total revenues increased 16.1% from $ 4,120.1 million in
the 3Q15 to $ 4,784.4 million in the 3Q16. This increase was mainly due to
increases in passenger revenues.
Passenger revenues increased 14.7% from $3,826.0 million pesos in the 3Q15 to
$ 4,389.9 million pesos in the 3Q16, mainly due to 19.1% increase in the average
ticket fare and the international routes expansion.
The seats supply (ASK's) increased by 17.3% in the 3Q16 compared to the same
period of 2015, mainly due to the opening of new routes and increase of
operations by the planned expansion of the company by incorporating new fleet.
Other income increased 34.1%, from $ 294.1 million pesos in the 3Q15 to $ 394.5
million pesos in the 3Q16, mainly due to higher revenues from maintenance
services to third parties and higher revenues by charter operations.
Operating expenses
Operating expenses increased 23.6%, from $ 3,790.7 million pesos in the 3Q15 to
$ 4,685.5 million pesos in the 3Q16. This increase was mainly due to growth in
operations by incorporating fleet that originated higher costs of: airport, operating
and landing fees, maintenance, wages, salaries and benefits for crews and jet fuel
costs. At the end of 3Q16 the company operated 22 SSJ100 and 44 A320's and 1
A321.
The unit cost per ASK in pesos (CASK) increased 5.4% compared to the 3Q15, as
a result of higher expenses due to the increase in operations derived of the fleet
increase and the international expansion. The CASK excluding fuel increased
7.4% regarding the same period of the previous year, showing the negative effect
of the depreciation of the peso against the dollar.
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
Fuel expenses on the 3Q16 increased by 16.9% from $ 999.9 million in the 3Q15
to $ 1,169.2 million in the same period of 2016, mainly due to the increase of 3.8%
in the price per liter of fuel paid by the company reaching an average price per liter
from $ 7.93 compared to $ 7.64 of 3Q15 and the increase in fuel consumption by
higher operations of approximately 9.2% from 25,932 operations in the 3Q15 to
28,305 operations in the same period of 2016. The cost per ASK's decreased
0.3% compared to the same period of 2015.
Maintenance expenses increased 41.3%, from $ 532.4 million pesos in the 3Q15
to $ 731.7 million pesos in the 3Q16 as a result of higher costs of services to our
fleet, due to the increment in the fleet. The cost per ASK's increased 20.5%
compared to the same period of 2015.
The costs for Airport operating and landing fees increased 29.6% from $ 575.1
million pesos in the 3Q15 to $ 745.5 million pesos in the 3Q16 as a result of an
increment of 9.2% in the number of operations during the 3Q16, mainly in the
international market, compared to the same period of 2015. The cost per ASK's
increased 10.5% compared to the same period of 2015.
Expenses for wages, salaries and benefits for crews increased 26.8% from $ 299.1
million pesos in the 3Q15 to $ 379.2 million pesos in the 3Q16 mainly due to an
increase of 19.3% in the number of employees whose integrate the crews from
1,247 in the 3Q15 to 1,488 in the same period of 2016, which included training
expenses and per diem as a result of additional aircraft that were acquired in this
period. The cost per ASK's increased 8.1% compared to the same period in 2015.
Selling expenses and advertising increased 19.7% from $ 372.4 million pesos in
the 3Q15 to $ 445.7 million pesos in the 3Q16 as a result of an increment in
advertising to promote new routes and higher payments from bank fees for the
increase in sales. The cost per ASK's increased 2.0% compared to the same
period of 2015.
The technology and administrative expenses decreased 26.6% to $353.2 million
pesos in the 3Q15 to $261.4 million pesos in the 3Q16 as a result of a decrement
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
in spending on technology. The ASK cost decreased 36.9% compared to the same
period of 2015.
Aircraft and engine rent expenses increased 44.5% from $ 378.5 million pesos in
the 3Q15 to $546.7 million pesos in the 3Q16 as a result of the depreciation of the
peso against the dollar, considering all our rents are fixed in dollars and adding the
increment in our fleet. At the end of 3Q16 we operated 1 A321, 44 A320 and 22
SSJ100 compared to the end of 3Q16, we operated 39 A320 and 16 SSJ100. The
cost of ASK´s increased 23.2% compared to the same period of 2015.
Depreciation expenses increased 42.6% from $ 245.6 million pesos in the 3Q15 to
$ 350.3 million pesos in the 3Q16 as a result of additional fleet by the acquisition of
regional aircraft SSJ100 reaching 22 aircraft at the end of 3Q16 compared to the
16 aircraft at the end of 3Q15. The cost per ASK's increased 21.6% compared to
the same period of 2015.
EBITAR
EBITDAR increased 4.6% from $ 953.3 million pesos in the 3Q15 to $ 995.9
million pesos in the 3Q16. The EBITDAR margin reached 20.8% in the 3Q16, 2.3
base points lower of the same period of 2015.
Operating Income
Operating income decreased 70.0% from $329.4 million pesos in the 3Q15 to $
98.9 million pesos in the 3Q16, mainly due to the $ 893.8 million pesos increase of
operating expenses in the third quarter of 2016 and revenue of $663.3 million
pesos compared to the same period of 2015, for the reasons mentioned above.
Integral cost of financing
The integral cost of financing decreased 81.7%, from $ 269.6 million pesos in the
3Q15 to $ 49.3 million pesos in the 3Q16 as a result of increased foreign exchange
gain mainly generated by a renegotiation of certain debt of a subsidiary abroad
that strengthened debt profile by changing its currency from dollars to 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.
partially offset by higher interest paid by the increment in dollar bank debt for the
acquisition of flight equipment.
Net Income
INTERJET recorded net income of $ 49.6 million pesos in the 3Q16 compared to
the $ 59.0 million pesos produced in the 3Q15.
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
Comments to the statement of financial position and liquidity
At September 30 2016, the company had $ 1,107.0 million pesos in cash and cash
equivalents.
Net cash provided by operating activities in 2016 imported $ 1,271.5 million pesos.
Net cash provided by investing activities mostly reflects investments in aircraft
according to the business plan of the company and the maintenance reserves
payments.
Net cash used in financing activities reflects higher bank loans for the purchase of
aircraft and working capital.
Contacto Relación con Inversionistas:
Alejandro Beristain/CFO/9178-5511
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
September 30, 2016 December 31, 2015
Assets
Current assets:
Cash and cash equivalents $1,107.0 $2,014.4
Accounts receivable 1,523.6 894.2
Recoverable taxes, mainly income tax and value-added tax 43.8 35.7
Inventories 154.4 252.1
Prepaid expenses 492.0 484.0
Total current assets 3,320.8 3,680.4
Advance payments to purchase flight equipment 1,547.4 1,476.6Flight equipment, leasehold improvements, and furniture and equipment -
Net19,489.9 17,103.7
Prepaid maintenance 6,296.5 5,134.7
Deferred tax assets 25.9 45.9
Other assets - Net 104.5 85.2
Concession 43.8 43.8
Deposits on aircraft leases 1,134.5 674.0
Total $31,963.3 $28,244.3
Liabilities and stockholders’ equity
Current liabilities:
Notes payable to financial institutions $8,827.3 $7,836.4
Accounts payable 1,803.3 1,717.9
Other accounts payable and accrued expenses 1,419.4 819.9
Payable taxes other than income taxes 273.0 128.2
Air traffic liability 1,247.9 858.9
Total current liabilities 13,570.9 11,361.3
Long-term debt 10,181.3 10,104.2
Employee benefits and other deferred liabilities 3.4 9.4
Provision of maintenance and retirement conditions 3,740.0 3,034.8
Total liabilities 27,495.6 24,509.7
Stockholders’ equity:
Capital stock 900.0 900.0
Contributions for future capital increases 0.0 0.0
Translation effects of foreign operation 694.3 275.3
Retained earnings 2,826.3 2,528.4
Controlling interest 4,420.6 3,703.7
Noncontrolling interest 47.1 30.9
Total stockholders’ equity 4,467.7 3,734.6
Total $31,963.3 $28,244.3
ABC Aerolíneas, S.A. de C.V. and Subsidiaries
Unaudited Condensed Consolidated Interim Statements of Financial Position
(In millions of Mexican pesos)
As of September 30, 2016 and December 31, 2015
ABC Aerolíneas, SA de CV * Blvd. Puerto Aéreo S/N Zona Federal del Aeropuerto Internacional “Benito Juárez”
(AICM) C.P. 15620 México, D.F.
2016 2015 2016 2015
Operating revenues:
Passengers $4,389.9 $3,826.0 $11,662.0 $9,943.9
Other 394.5 294.1 1,085.0 845.8
4,784.4 4,120.1 12,747.0 10,789.7
Operating expenses:
Aircraft fuel 1,169.2 999.9 2,883.0 2,813.3
Maintenance and return conditions 731.7 517.8 1,760.0 1,251.6
Airport operating and landing fees 745.5 575.1 1,861.0 1,466.1
Wages, salaries and benefits 379.2 299.1 1,032.0 775.8
Insurance and passenger service 55.7 49.2 154.0 141.5
Selling 445.7 372.4 1,130.0 949.7
Administrative and other 261.5 353.2 835.0 764.5
Flight equipment rentals 546.7 378.3 1,576.0 1,218.9
Depreciation and amortization 350.3 245.6 985.0 699.8
4,685.4 3,790.6 12,216.0 10,081.3
Operating income 98.9 329.4 531.0 708.4
Comprehensive financing cost:
Interest income 9.8 13.1 27.0 32.3
Interest expense (229.2) (167.5) (626.0) (442.0)
Exchange loss – Net 170.1 (115.2) 386.0 (95.7)
(49.2) (269.6) (213.0) (505.4)
Income before income taxes 49.6 59.8 318.0 203.0
Income taxes (0.0) (0.8) (2.9) (5.0)
Net income $49.6 $59.0 $315.1 $198.0
ABC Aerolineas, S.A. de C.V. and Subsidiaries
Unaudited Condensed Consolidated Interim Statements of Profit
Three months ended September
30Nine months ended September 30
For the three and nine months ended September 30, 2016 and 2015, respectively
(In millons 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.
September 30,
2016
September 30,
2015
Operating activities:
Net income (loss) $314.0 $198.0
Depreciation and amortization 985.1 699.8
Provision of maintenance and retirement conditions 705.2 1,069.6
Interest expense 0.0 0.0
Unrealized foreign exchange (957.1) 244.7
(Increase) decrease accounts receivable (629.4) 11.2
(Increase) decrease due from related parties 0.0 0.0
(Increase) decrease recoverable taxes, mainly income tax and valueadded tax (8.1) 49.7
(Increase) decrease inventories 97.7 0.0
(Increase ) decrease prepaid expenses (8.0) 55.6
(Increase ) decrease deposits on aircraft leases (460.5) 0.0
Increase (decrease) accounts payable 85.4 698.9
Increase (decrease) other accounts payable and accrued expenses 619.5 311.9
Increase (decrease) payable taxes 144.8 0.0
Increase (decrease) air traffic liability 389.0 79.6
Increase (decrease) employee benefits and other deferred liabilities (6.0) 3.9
Net cash provided by operating activities 1,271.5 3,178.2
Investing activities:
Flight equipment, leasehold improvements, and furniture and equipment (1,435.7) (5,205.1)
Long - term prepaid expenses (70.8) (1,838.5)
Other assets (19.3) (807.7)
Prepaid maintenance (1,161.7) (124.3)
Net cash used in investing activities (2,687.6) (7,975.6)
Financing activities:
Net Financing 508.7 4,227.6
Interest paid 0.0 0.0
Net cash provided by financing activities 508.7 4,227.6
Net decrease in cash and cash equivalents (907.4) (325.0)
Cash and cash equivalents at beginning of period 2,014.4 2,360.3
Cash and cash equivalents at end of period $1,107.0 $2,035.3
ABC Aerolíneas, S.A. de C.V. and Subsidiaries
Unaudited Condensed Consolidated Interim Statements of Cash Flows
(In millions of Mexican pesos)
For the nine months ended September 30, 2016 and 2015
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
Translation
effects of
foreign
operations
Retained
earnings
Non controlling
interests
Total
Stockholder´s
Equity
Balances as of January 1, 2015 $900.0 $0.0 $101.0 $2,127.5 $20.0 $3,148.5
Comprehensive Income:
Translation effects of foreign operations 0.0 0.0 (95.7) 0 0.0 (95.7)
Net income for the year 0.0 0.0 0.0 194.8 3.2 198.0
0.0 0.0 (95.7) 194.8 3.2 102.3
Balances as of September 30, 2015 $900.0 $0.0 $5.3 $2,322.3 $23.2 $3,250.8
Balances as of January 1, 2016 $900.0 $0.0 $275.2 $2,528.4 $30.9 $3,734.5
Comprehensive Income:
Translation effects of foreign operations 0.0 0.0 419.1 0.0 0.0 419.1
Net income for the year 0.0 0.0 0.0 297.9 16.1 314.0
0.0 0.0 419.1 297.9 16.1 733.1
Balances as of September 30, 2016 $900.0 $0.0 $694.3 $2,826.3 $47.1 $4,467.7
ABC Aerolineas, S.A. de C.V. and Subsidiaries
Unaudited Condensed Consolidated Interim Statements of Changes in Stockholder´s Equity
For the nine months ended September 30, 2016 and 2015, respectively
(Millions 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.
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.
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