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Last Updated : Aug 09, 2019 03:28 PM IST | Source: Moneycontrol.com

SpiceJet reports highest-ever quarterly profit in Q1 backed by Boeing reimbursements, revenue rises 35%

In terms of operational parameters, SpiceJet average domestic load factor for the quarter was 93.8 percent.

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Budget airline SpiceJet reported its highest-ever quarterly profit at Rs 262.9 crore Q1FY20, driven by operational efficiencies and solid revenue growth YoY.

The firm had posted a loss of Rs 35.6 crore in the corresponding quarter of last fiscal.

The profit was also boosted by other income of Rs 143.2 crore in Q1 (against Rs 32.89 crore) including Rs 114.1 crore towards reimbursements from Boeing against revenue loss incurred due to grounded Boeing 737 MAX aircraft.

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"On the grounded Boeing 737 MAX aircraft, the company continues to incur various costs with respect to these aircraft and during this quarter ended June 2019 on account of its inability to undertake revenue operations, the company has recognised Rs 114.1 crore towards aircraft and supplemental lease rentals as other income. This is a part recognition of the total reimbursements, on which the company is working with the aircraft manufacturer, towards various ascertained costs and losses incurred by the company on this aircraft," the company explained.

Consolidated revenue during the quarter grew by 35.2 percent YoY to Rs 3,002.8 crore with the addition of 32 aircraft and more departure slots in key cities in Q1 after Jet fiasco.

"We added 32 aircraft to our fleet expanding at a pace unprecedented for a sector plagued by crisis showcasing our robust business model and proven operational capabilities," Ajay Singh, Chairman and Managing Director said.

At the end of June quarter, SpiceJet's fleet size stood at 107.

"The airline has been allotted an additional 48 domestic and international departure slots in Mumbai; and 15 domestic and international departure slots in Delhi," company said in its BSE filing.

Starting April 1, 2019, the airline announced 130 additional flights that include 78 flights connecting Mumbai, 20 flights connecting Delhi and 12 flights connecting Mumbai and Delhi, it added.

In terms of operational parameters, SpiceJet average domestic load factor for the quarter was 93.8 percent.

For 50 months in a row, the company has flown the highest load factors in the Indian aviation market, a feat unparalleled globally, SpiceJet said.

At the operating level, consolidated earnings before interest, tax, depreciation and amortisation increased nearly 8-fold to Rs 620.8 crore in Q1, from Rs 81.3 crore in the previous year. Margin improved significantly to 20.7 percent against 3.7 percent due to increase in capacity and fair price especially after grounded Jet Airways.

The company made some adjustments on expenses front with related to aircraft lease rentals due to new accounting standards, as a result aircraft lease rentals fell 77 percent to Rs 64.58 crore YoY while finance cost increased 313 percent to Rs 124 crore and depreciation cost jumped 573 percent to Rs 377.4 crore YoY in Q1.

Effective April 1, 2019, the airline adopted the new accounting standard IND AS 116 which effectively capitalises operating leases, and as result of this the lease rentals are now reflected as interest and depreciation for the quarter ending June 2019. Additionally, owing to the retrospective treatment of this standard there is a reduction of Rs 302.2 crore from retained earnings status as at April 1, 2019, SpiceJet explained.

Earlier the company had estimated that the grounded Boeing 737 MAX aircraft to resume normal operations by July/August 2019 as per the understanding with the aircraft manufacturer.

With the current developments and uncertainty around the exact month of resumption, the company plans to cater to the winter season by inducting 5-10 Boeing 737 NG aircraft and 3 Q400 aircraft during October 2019, SpiceJet said.

The stock was quoting at Rs 138.55, up Rs 2.60, or 1.91 percent on the BSE at 1446 hours IST.

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First Published on Aug 9, 2019 03:19 pm
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