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'000 | Unaudited six months 31 Dec 2007 R'000 | Unaudited 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'000 | Share Premium R'000 | BEE Reserve R'000 | Hedging Reserve R'000 | Retained Income | Total | |
|---|---|---|---|---|---|---|
| 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 |
