Profit or loss? Check which way fortune has swung for Spicejet
For the full year to March, Spicejet reported a 32 per cent growth in profit at Rs 566.7 crore--the highest annual profit in its 13-year history and the third profitable full year in a row.
An industry leading 95.4 per cent occupancy helped Spicejet to report an 11 per cent jump in net profit at Rs 46.1 crore for the three months to March, making it the 13th consecutive profitable quarter for the carrier. For the full year to March, the second largest no- frills airline reported a 32 per cent growth in profit at Rs 566.7 crore--the highest annual profit in its 13-year history and the third profitable full year in a row. In FY17 it had reported Rs 430.7 crore net income while in the year before it was a low Rs 41.6 crore, the airline said in a statement, adding for the full year, its revenue clipped past 26 per cent to Rs 7,795.1 crore.
Meanwhile, airline informed the BSE that its board has given a five-year new term to Singh, the chairman and MD. In a separate statement it also said, "the adverse concern expressed by the auditors on its ability to run as a growing concern has been withdrawn. "The company has been consistently profitable for the past three financial years, as a result of which the negative net worth of Rs 1,485.20 crore as of March 2015 has improved, and is only Rs 42.97 crore as of March 2018.
"The current balance-sheet is prepared on the basis that the company will continue as a going concern for the foreseeable future," Spicejet said. For the reporting quarter, net sales clipped past 25 per cent to Rs 2,029.3 crore as its load factor jumped to a record 95.4 per cent, helping it improve passenger yields or revenue per seat kilometers by 9 per cent. For the full year, seat factor stood at 94.7 per cent-making it the 35th months of over 90 per cent load factor in a row.
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Commenting on the performance of the quarter which is traditionally a lean season for the industry and for the full year, Singh said, "despite rising fuel prices, which rose 12.7 per cent, we could remain profitable with record profit and the highest annual profit in our history." Singh attributed the profit numbers to the continued focus on adding capacitates on existing routes and also identifying new destinations with pent-up demand. Going forward, he said induction of the fuel efficient B737 Max planes in the coming months will help the airline improve profitability and operating performance.
Already the airline enjoys the highest load factor in the industry, he said, adding the record load factor helped it absorb the significant rise in fuel costs. During the reporting quarter, there was a 12.7 per cent increase in crude prices that impacted bottom line by around Rs 81.4 crore, but it was partially offset by an 8 per cent increase in yields. On the best passenger load factor in the industry during the quarter as well for full-year, Singh said the average domestic load factor for the quarter was 95.4 per cent, while it stood at 94.7 per cent for the full year.
"For three years in a row, we have flown with the highest load factor in the country and for 35 months in a row the load factor has been in excess of 90 per cent, a feat unparalleled globally," Singh claimed. During the quarter, the airline inked a USD 12.5- billion agreement with CFM International to buy LEAP-1B engines to power its 155 Boeing 737 Max fleet, along with spare engines. The carrier expects these new engines and fleet to help it significantly reduce engine maintenance cost. Under the RSC connectivity scheme, the airline launched operations to five destinations of the 20 licences it has--Kandla, Porbandar, Puducherry, Jaisalmer and Adampur, it said, adding during the current quarter, it will start operations to Kanpur and Hubli under the scheme.
The airline will induct 19 Boeing 737 Max aircraft during the year, which will help reduce cost by 8-9 per cent; and eight new generation Q400s with additional seating capacity that will help improve the overall operating economics by 15-18 per cent, Singh said. Shares closed 0.50 per cent down at Rs 118.80 on BSE, as against a 0.82 per cent rally in Sensex.