South Africa 14.2.2017 02:20 pm

Comair profit soars on oil hedges and loan revaluation

Comair profit soars on oil hedges and loan revaluation

Comair generated R448m cash from operations during the period under review, with R949m in cash on hand.

Comair on Tuesday posted a R199 million profit after tax for the six month period ending December 31, compared to R84 million in the previous period.

Comair said it continued to see surplus capacity in the market, resulting in occupancy levels that remained low by international standards.

Comair chief executive Erik Venter said the comparative half-year was marked by extraordinary costs arising from losses on oil hedges and the revaluation of its dollar-based aircraft loan, which did not recur in the current year.

The South African airline, which operates British Airways and its low-cost brand, kulula.com, posted headline earnings per share (HEPS) of 42.8 cents, compared to 13.1 cents per share for the prior period, and an interim dividend of 7 cents.

Comair saw revenue growth of six percent as a result of a recovery in yields, but without any increase in volumes.

“We’re in an inflationary environment, but cost inflation was offset by a stronger rand and improved operating efficiencies,” says Venter.

Comair generated R448 million cash from operations during the period under review, with R949 million in cash on hand.

The airline also took delivery of one new Boeing 737-800 and one leased 737-800 to replace retired 737-400s in the British Airways fleet during the period ending 31 December.

Venter said the company’s non-airline operations also performed well. These include Comair’s SLOW airport lounges, travel businesses, catering operation (Foodirections), and its flight training facility.

Venter said: “The weak economy is expected to maintain pressure on consumer spending, so we can expect continued pressure on margins in the airline industry.”

 

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