1. Indigo net profit plunges 25% to Rs 440 cr even as revenue rises 18.5% to Rs 4,848.2 cr

Indigo net profit plunges 25% to Rs 440 cr even as revenue rises 18.5% to Rs 4,848.2 cr

Interglobe Aviation on Tuesday reported a net profit of Rs 440 crore for the three months to March, a year-on-year drop of around 25%.

By: | New Delhi | Published: May 10, 2017 7:02 AM
The company also announced the purchase of 50 small ATR aircraft for .3 billion; the planes will be flown on Tier II and Tier III routes.

Interglobe Aviation on Tuesday reported a net profit of Rs 440 crore for the three months to March, a year-on-year drop of around 25%. The company, which runs the IndiGo airline, notched up revenues of Rs 4,848.2 crore for Q4FY17, an increase of 18.5% y-o-y but a substantial jump in fuel costs (71%) and higher rentals drove down profits.

The company also announced the purchase of 50 small ATR aircraft for $1.3 billion; the planes will be flown on Tier II and Tier III routes. The current fleet size of the airline stands at 131 narrow-body aircraft from Airbus and the management indicated that the total capacity will increase to 170 aircraft by March 2018. The management also indicated that the airline will set up separate operations for the ATR 72 aircraft.

During the quarter, increase in the price of fuel, which comprises 40% of the operating cost, increased by a whopping 71% y-o-y to Rs 1,750.5 crore. As a result of the increased fleet size the aircraft rentals also jumped by 21.4% y-o-y to Rs 824.1 crore. The no-frills carrier also registered a 16.47% y-o-y increase in other expenses and 8.4% y-o-y increase in employee benefit expenses.

As a consequence of higher expenses the operating profit or Ebitdar (earnings before interest, tax, depreciation, amortisation and rental) decreased by 6.61% y-o-y to Rs 1,449.10 crore. Margins fell 700 basis points to 29.9% from 37.9% from the year-ago period. As a result of the increase in capacity and cost, yields during the quarter fell 4.2% y-o-y to Rs 3.50.

“The yields during the year was down by 10% but things improved in February and March since fare prices increased as a result of increasing oil prices. There will be a lag between capacity growth and passenger growth in the short term but in the long term we see huge opportunities,” Aditya Ghosh, president, Interglobe Aviation, said in a conference call.

The carrier had added five new A320neo aircraft in the last quarter of FY17 and the average seat kilometre during period rose 24.2 % y-o-y to14.12 billion. The Gurgaon-based carrier ended FY17 with a 16.46% y-o-y decrease in net profit to `5,440.8 crore. Revenue from operation during the year increased by 15.12% y-o-y to `1,8580.5 crore while Ebitdar slipped by 4.2% y-o-y to `5,440.8 crore.

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