THIRD QUARTER RESULTS 2016

Transcription

1 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 $ 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 During the 9M16, Interjet registered net income of $315.1 million pesos, representing an increase of 59.2% regarding the same period of Q= Third quarter y 9M= Nine Months

2 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

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5 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 $ pesos per dollar at the end of 3Q15 to $ 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.

6 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 $ million pesos in the 3Q15 to $ 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.

7 Fuel expenses on the 3Q16 increased by 16.9% from $ 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 The cost per ASK's decreased 0.3% compared to the same period of Maintenance expenses increased 41.3%, from $ million pesos in the 3Q15 to $ 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 The costs for Airport operating and landing fees increased 29.6% from $ million pesos in the 3Q15 to $ 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 The cost per ASK's increased 10.5% compared to the same period of Expenses for wages, salaries and benefits for crews increased 26.8% from $ million pesos in the 3Q15 to $ 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 Selling expenses and advertising increased 19.7% from $ million pesos in the 3Q15 to $ 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 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

8 in spending on technology. The ASK cost decreased 36.9% compared to the same period of Aircraft and engine rent expenses increased 44.5% from $ 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 Depreciation expenses increased 42.6% from $ million pesos in the 3Q15 to $ 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 EBITAR EBITDAR increased 4.6% from $ million pesos in the 3Q15 to $ million pesos in the 3Q16. The EBITDAR margin reached 20.8% in the 3Q16, 2.3 base points lower of the same period of 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 $ 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 $ 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

9 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.

10 Comments to the statement of financial position and liquidity At September , 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/

11 ABC Aerolíneas, S.A. de C.V. and Subsidiaries Unaudited Condensed Consolidated Interim Statements of Financial Position As of September 30, 2016 and December 31, 2015 (In millions of Mexican pesos) September 30, 2016 December 31, 2015 Assets Current assets: Cash and cash equivalents $1,107.0 $2,014.4 Accounts receivable 1, Recoverable taxes, mainly income tax and value-added tax Inventories Prepaid expenses Total current assets 3, ,680.4 Advance payments to purchase flight equipment 1, ,476.6 Flight equipment, leasehold improvements, and furniture and equipment - 19, ,103.7 Net Prepaid maintenance 6, ,134.7 Deferred tax assets Other assets - Net Concession Deposits on aircraft leases 1, 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, ,717.9 Other accounts payable and accrued expenses 1, Payable taxes other than income taxes Air traffic liability 1, Total current liabilities 13, ,361.3 Long-term debt 10, ,104.2 Employee benefits and other deferred liabilities Provision of maintenance and retirement conditions 3, ,034.8 Total liabilities 27, ,509.7 Stockholders equity: Capital stock Contributions for future capital increases Translation effects of foreign operation Retained earnings 2, ,528.4 Controlling interest 4, ,703.7 Noncontrolling interest Total stockholders equity 4, ,734.6 Total $31,963.3 $28,244.3

12 ABC Aerolineas, S.A. de C.V. and Subsidiaries Unaudited Condensed Consolidated Interim Statements of Profit For the three and nine months ended September 30, 2016 and 2015, respectively (In millons of Mexican pesos) Three months ended September 30 Nine months ended September Operating revenues: Passengers $4,389.9 $3,826.0 $11,662.0 $9,943.9 Other , , , , ,789.7 Operating expenses: Aircraft fuel 1, , ,813.3 Maintenance and return conditions , ,251.6 Airport operating and landing fees , ,466.1 Wages, salaries and benefits , Insurance and passenger service Selling , Administrative and other Flight equipment rentals , ,218.9 Depreciation and amortization , , , ,081.3 Operating income Comprehensive financing cost: Interest income Interest expense (229.2) (167.5) (626.0) (442.0) Exchange loss Net (115.2) (95.7) (49.2) (269.6) (213.0) (505.4) Income before income taxes Income taxes (0.0) (0.8) (2.9) (5.0) Net income $49.6 $59.0 $315.1 $198.0

13 ABC Aerolíneas, S.A. de C.V. and Subsidiaries Unaudited Condensed Consolidated Interim Statements of Cash Flows For the nine months ended September 30, 2016 and 2015 (In millions of Mexican pesos) September 30, 2016 September 30, 2015 Operating activities: Net income (loss) $314.0 $198.0 Depreciation and amortization Provision of maintenance and retirement conditions ,069.6 Interest expense Unrealized foreign exchange (957.1) (Increase) decrease accounts receivable (629.4) 11.2 (Increase) decrease due from related parties (Increase) decrease recoverable taxes, mainly income tax and valueadded tax (8.1) 49.7 (Increase) decrease inventories (Increase ) decrease prepaid expenses (8.0) 55.6 (Increase ) decrease deposits on aircraft leases (460.5) 0.0 Increase (decrease) accounts payable Increase (decrease) other accounts payable and accrued expenses Increase (decrease) payable taxes Increase (decrease) air traffic liability Increase (decrease) employee benefits and other deferred liabilities (6.0) 3.9 Net cash provided by operating activities 1, ,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 ,227.6 Interest paid Net cash provided by financing activities ,227.6 Net decrease in cash and cash equivalents (907.4) (325.0) Cash and cash equivalents at beginning of period 2, ,360.3 Cash and cash equivalents at end of period $1,107.0 $2,035.3

14 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) 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 (95.7) (95.7) Net income for the year (95.7) 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 Net income for the year Balances as of September 30, 2016 $900.0 $0.0 $694.3 $2,826.3 $47.1 $4,467.7

15 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.