| Tue 14 Feb 2012, 12:00 | | COM - Comair Limited - Unaudited interim results for the six months ended |
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COM - Comair Limited - Unaudited interim results for the six months ended
31 December 2011
Comair Limited
Incorporated in the Republic of South Africa
Registration number: 1967/006783/06
Share code: COM
ISIN: ZAE000029823
("Comair" or "the Company" or "the Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
Performance review
Revenue grew by 17%, mainly as a result of higher fleet utilisation and the
larger Boeing 737-800 aircraft introduced last year, while costs increased by
24%, driven by the highest average fuel price seen to date - 41% higher than
for the comparative period. This, as well as the weak economic climate and
the airports tariff increase of 70% constrained further fare increases
necessary to the airline. Revenue growth was consequently not adequate to
fully recover the increase in operating costs. Consequently, headline
earnings per share declined from 10,3 cents to a loss per share of 4.9 cents.
During the period, a R10,7 million loss was incurred on the disposal in
December of three Boeing 737-200 aircraft that were retired from operation in
early 2011. Cash generated by operations remained strong, and R106 million
was reinvested in heavy maintenance on aircraft and in an enterprise system
from Sabre Airline Solutions.
The SLOW lounges, pilot training and online travel businesses continued to
perform well, although their growth was also affected by the weak economy.
During the period a fourth flight simulator, for the training of ATR pilots,
was placed in a leased bay in the Comair flight training building by ATR
Industries, thereby further broadening the offering of this world class
facility.
Prospects
We remain of the opinion that the high oil price and a weak global economy
will prevail for the foreseeable future. Airlines that do not substantially
reinvent themselves will not survive in this new environment, as demonstrated
by the failure of a number of airlines globally in the first weeks of 2012.
Comair has embarked on a cost reduction programme, but this is not a
sustainable solution to mitigate escalating costs. We therefore contracted a
year ago for an extensive and integrated suite of systems from Sabre Airline
Solutions, which will enable the reengineering of the entire Comair business
to deliver substantially improved customer service, revenue and operating
efficiency. The benefits of the new systems will only be seen in the results
for the 2013 financial year. In the interim we have embarked on many other
projects, such as setting up our own catering unit that will reduce our
catering cost by 25%, establishing a crew base in Cape Town to reduce crew
accommodation costs by 80% and by optimising the flight schedules. We are
confident that these short- and medium-term measures will significantly
improve Comair`s financial performance in a consistently tough trading
environment.
The above outlook has not been reviewed and reported on by Comair`s external
auditors and does not constitute an earnings forecast.
Dividends
No interim dividends have been declared as it is the Group policy to consider
one dividend annually.
Directors` resignations and appointments
Gidon Novick resigned as Joint Chief Executive Officer on the 1st December
2011.
Erik Venter was appointed as the sole Chief Executive Officer on the 1st
December 2011.
Donald Novick retired as Chairman of the Board on the 31st January 2012.
Pieter van Hoven was appointed as Chairman of the Board on the 13th February
2012.
Basis of preparation
In terms of the Listing Requirements of the JSE Limited, the Group has
prepared its consolidated interim results in accordance with International
Financial Reporting Standards including IAS 34 Interim Financial Reporting,
the AC 500 standards as issued by the Accounting Standards Board and the
requirements of the Companies Act of 2008. The accounting policies used in
the preparation of these results are consistent in all material aspects with
those used for the previous annual financial statements. These Unaudited
Interim Group Results were prepared by:
R. Yasas Sri Chandana
Financial Director
Comair Limited
Abridged Group Statement of Comprehensive Income
Unaudited Unaudited Audited
six months six months year
31 Dec 31 Dec 30 June
2011 2010 2011
R `000 R `000 R `000
Revenue 2,053,784 1,756,663 3,587,754
Operating expenses (2,008,861) (1,607,568) (3,311,147)
Operating profit before depreciation
44,923 149,095 276,607
Depreciation (85,083) (75,149) (158,835)
(Loss)/Profit before interest, (40,160) 73,946 117,772
dividend, taxation and profit
/(loss) of associates
Investment income 4,497 15,775 23,184
Interest expense (11,135) (19,108) (35,255)
Share of profit/ (loss) of 1,856 (1,392) 762
associates
(Loss)/profit before taxation (44,942) 69,221 106,463
Taxation 10,776 (20,823) (29,466)
(Loss)/profit after tax attributable (34,166) 48,398 76,997
to the equity holders of the parent
Fair value adjustment on cash flow 395 4,522 (511)
hedge
Total comprehensive (loss)/income (33,771) 52,920 76,486
for the year attributable to the
equity holders of the parent
(Loss)/Earnings per share (cents) (7.1) 10.3 15.9
Headline (loss)/earnings per share (4.9) 10.3 15.9
(cents)
Diluted (loss)/earnings per share (7.1) 10.2 15.9
(cents)
Diluted headline (loss)/earnings per (4.9) 10.2 15.9
share (cents)
Dividends per share - 5.0 -
Actual number of shares in issue 489,176 489,176 489,176
(`000)
Weighted ordinary shares in issue 481,484 470,648 481,484
(`000)
Diluted weighted ordinary shares in 482,464 474,680 482,464
issue (`000)
Reconciliation between earnings and headline earnings
(Loss)/profit after tax attributable (34,166) 48,398 76,997
to the equity holders of the parent
Add: IAS 16 loss on disposal of 10,669 - -
property, plant and equipment after
taxation
Headline (loss)/earnings after tax (23,497) 48,398 76,997
Abridged Group Statement of Financial Position
ASSETS
Property, plant and equipment 1,375,284 1,064,964 1,315,357
Investment in associates 16,824 76,637 61,550
Goodwill 3,668 - 3,668
Current assets 625,085 656,097 723,046
2,020,861 1,797,698 2,103,621
EQUITY AND LIABILITIES
Share capital and reserves 768,464 755,053 800,521
Interest bearing liabilities 310,663 245,673 274,245
Deferred taxation 108,174 94,702 97,258
Current liabilities 833,560 702,270 931,597
2,020,861 1,797,698 2,103,621
Net asset value per share (cents) 159.6 160.4 166.3
Unaudited Unaudited Audited
six months six months year
31 Dec 31 Dec 30 June
2010 2009 2010
R `000 R `000 R `000
Abridged Group Statement of Cash Flows
Cash and cash equivalents at the 234,031 374,277 374,277
beginning of the period
Cash from operations and investment 161,809 33,859 181,090
income
Dividends paid - (23,533) (23,598)
Taxation refunded/(paid)
1,198 (37,639) (45,414)
Cash utilised in investing (100,284) (80,215) (135,564)
activities
Cash utilised by financing (41,956) (135,556) (116,760)
activities
Cash and cash equivalents at the end 254,798 131,193 234,031
of the period
Abridged Group Segment Report
Segmental Revenue
Airline 1,931,857 1,723,601 3,538,766
Non-airline 121,927 33,062 48,988
2,053,784 1,756,663 3,587,754
Segmental Results
Airline 29,851 139,349 261,492
Non-airline 15,072 9,746 15,115
Profit before taxation and 44,923 149,095 276,607
depreciation
Depreciation - Airline (79,810) (73,274) (155,859)
Depreciation - Non-airline (5,273) (1,875) (2,976)
(Loss)/Profit before interest, (40,160) 73,946 117,772
dividend and taxation
Segmental assets - Airline 1,894,964 1,655,883 1,991,594
Segmental assets - Non-airline 125,897 141,815 112,027
Segmental liabilities - Airline (1,156,531) (945,001) (1,201,921)
Segmental liabilities - Non-airline (95,866) (97,644) (40,080)
Segmental capital additions - 143,877 82,113 377,722
Airline
Segmental capital additions - Non- 7,551 66,147 31,776
airline
Abridged Group Statement of Changes in Equity
Opening Balance 800,521 725,275 725,275
Total comprehensive (loss)/income (33,771) 52,920 76,486
for the period
Dividends paid - (23,533) (23,598)
Equity settled share based payment 1,714 1,714 3,428
adjustment
Net effect of share trust activities - (1,323) 18,930
Closing Balance 768,464 755,053 800,521
By order of the Board
Mr P van Hoven (Chairman) Mr E Venter (CEO)
13 February 2012
Sponsor
RAND MERCHANT BANK (A division of First Rand Bank Limited)
Date: 14/02/2012 12:00:02 Produced by the JSE SENS Department.
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