Comair forges ahead in tough times

Johannesburg - Tuesday 17 February 2008. Comair Limited (Comair) today posted its interim results for the period ended 31 December 2008 and maintained the company’s unbroken record of 63 years of operating profits. Attributable earnings, which were 47% down on the comparative period at R32 million, were severely affected by the record-high oil price experienced in the first quarter. This resulted in headline earnings per share of 7.9 cents relative to 14.8 cents in the comparative period.

Passenger numbers for Comair’s two brands; British Airways and kulula.com remained stable while turnover grew by 28% as result of fare increases required to partially recover the escalating fuel price. The fuel bill increased from R427 million to R682 million despite Comair’s new fleet of Boeing 737 aircraft using 26% less fuel per seat than the old MD82 aircraft that they replaced.

While performance continued to be hampered by aggressive price competition from loss-making, taxpayer-funded state competitors SAA and Mango, losses on fuel hedging were offset by gains on hedging the rand against the US dollar. The domestic market shrunk by 5% year to date and Comair anticipates a further decline in the second half of the financial year, but with some respite offered by events like the British and Irish Lions’ tour, the Confederations Cup as well as the build up to the 2010 Soccer World Cup.

Comair joint CEO Erik Venter said, “The trading environment continues to be the toughest in the history of the industry and we anticipate this to continue throughout the year ahead. However we will continue to rely on the strength of our people and their commitment to world class customer service to see us through.” 

Comair will remain focused on diversification, particularly on the development of its on-line travel business which is already marketing a wide range of travel packages, accommodation and car rental.

Concludes Venter, “We still anticipate growth from our new business ventures like our outsourcing business where we provide a range of services to other airlines that include flight training and passenger handling.” 

Ends


Abridged Group Income Statement

Unaudited six months 31 Dec 2008 R'000Unaudited six months 31 Dec 2007 R'000Unaudited six months 30 June 2008 R'000
Revenue 1,606,846 1,258,153 2,688,488
Operating expenses (1,552,672) (1,166,008) (2,576,364)
Profit from operations 54,174 92,145 112,124
Net investment expense (14,452) (1,303) (8,276)
Share of profit (loss) of associates 2,210 500 (350)
Profit before taxation 41,932 91,342 103,498
Taxation (10,172) (31,833) (41,695)
Attributable earnings 31,760 59,509 61,803
Headline earnings attributable to Ordinary Shareholders 31,760 59,509 61,803
Earnings per share (cents) 7.9 14.8 15.4
Headline earnings per share (cents) 7.9 14.8 15.4
Diluted earnings per share (cents) 7.9 13.4 14.9
Diluted headline earnings per share (cents) 7.9 13.4 14.9
Weighted ordinary shares in issue ('000) 400,805 400,740 400,740
Diluted weighted ordinary shares in issue ('000) 404,211 442,701 414,233
Depreciation (R'000) 53,653 47,213 102,857
Interest expense (R'000) 26,403 16,391 37,668

Abridged Group Balance Sheet

ASSETS

Property, plant and equipment 893,714 736,851 866,750
Investment in associates 65,186 16,413 56,113
Available-for-sale-investments 120,870 99,450 110,160
Current assets 472,007 506,806 409,406
1,551,777 1,359,520 1,442,429

EQUITY AND LIABILITIES

Share capital and reserves 511,278 450,293 459,942
Interest-bearing liabilities 353,342 310,514 360,333
Deferred taxation 27,687 33,716 44,717
Current liabilities 659,470 564,997 577,437
1,551,777 1,359,520 1,442,429
Net asset value per share (cents) 128 112 102

Abridged Group Cash Flow Statement

Cash and cash equivalents at the beginning of the period 125,004 242,024 242,024
Cash from operations and investment income 223,373 201,467 172,439
Dividends paid - (36,065) (36,067)
Taxation paid (13,351) (23,176) (28,180)
Cash utilised in investing activities (98,184) (121,254) (358,057)
Net effect of share trust activities - 1,000 665
Decrease) / increase in interest bearing liabilities (6,991) 65,466 132,180
Cash and cash equivalents at the end of the period 229,851 329,462 125,004

Abridged Group Statement of Changes in Equity

Share Capital R'000Share Premium R'000BEE Reserve R'000Hedging Reserve R'000Retained IncomeTotal
Balance at 1 July 2007 4,736 8,042 - (485) 413,238 425,531
BEE Equity Adjustment incorrectly reported as creditor in 2007 - - 3,428 - - 3,428
Profit for six months - - - - 59,509 59,509
Dividends paid during the six months - - - - (36,065) (36,065)
Equity settled share based payment adjustment - - 1,714 - - 1,714
Net effect of share trust activities - - - - 1,000 1,000
Net change in hedging reserve - - - (4,824) - (4,824)
Balance at 31 December 2007 4,736 8,042 5,142 (5,309) 437,682 450,293
Balance at 1 July 2008 4,749 8,070 6,856 669 439,598 459,942
Attributable profit - - - - 31,760 31,760
Equity settled share-based payment adjustment - - 1,714 - - 1,714
Net change in hedging reserve - - - 17,862 - 17,862
Balance at 31 December 2008 4,749 8,070 8,570 18,531 471,358 511,278