1. Jet Airways’ shares take poor Q4 numbers in stride, recoup losses from early trade

Jet Airways’ shares take poor Q4 numbers in stride, recoup losses from early trade

Shares of Jet Airways had fallen intraday to Rs 436.00 in opening minutes of trade but recouped losses soon and at 1:15 pm was trading up 2.06% at Rs 469.00. The slippage seemed to be on the back of poor Q4 results announced by the airline.

By: | Updated: May 31, 2017 1:41 PM
Jet Airways reported a whopping 90.73% on-year decline in the standalone net profit to Rs 36.8 crore for the quarter ending March 31, as consequence of a substantial increase in fuel cost and a decline in the revenue from the international operations due to the slowdown in the Gulf countries. (Image: Reuters)

Shares of Jet Airways, the country’s largest full-service airline by market share, were back in the positive after slipping over 5% in the morning trade on the BSE. The stock had fallen intraday to Rs 436.00 in opening minutes of trade but recouped losses soon and at 1:15 pm was trading up 2.06% at Rs 469.00. The slippage seemed to be on the back of poor Q4 results announced by the airline.

Jet Airways reported a whopping 90.73% on-year decline in the standalone net profit to Rs 36.8 crore for the quarter ending March 31, as consequence of a substantial increase in fuel cost and a decline in the revenue from the international operations due to the slowdown in the Gulf countries. The airline reported a net profit of Rs 397.16 crore in the year-ago period.

“Non-fuel CASK (Cost per Available Seat Kilometre) reduced by 5 per cent in FY17 to Rs 3.15 from Rs 3.32 in Q4, FY16,” the company said.

The net sales during the quarter increased marginally by 3.09% on-year to Rs 5,449.13 crore when compared to Rs 5,285.64 crore in the corresponding period last year. The revenue from the domestic sector increased by 9.18% on-year to Rs 2,468.4 crore while the same from the international segment decreased by 1.46% on-year. Almost 60% of the total revenue of the full-service carrier comes from international operations. Revenues from codeshare traffic for the fourth quarter of FY17 rose by 5.3% on-year.

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“Jet Airways reported a mixed weak set of numbers for Q4FY17. While revenue growth during the quarter was hit by pressure on yields its margins also impacted by higher crude oil prices during the quarter,” ICICI Securities said in a report.

“EBITDA margin of 6.7 percent were lower than our estimated margin of 7.2 percent mainly due to a sharp jump in fuel and maintenance costs. Fuel costs (i.e. 28 percent of revenues) were up by 58.6 percent on a YoY basis to Rs1,700 crore, maintenance cost also jumped sharply by 56 percent YoY to a Rs492 crore,” the report added.

Jet Airways Chairman Naresh Goyal said the past year has been extremely challenging for both domestic and international markets.

“Notwithstanding the growth in traffic in the domestic market, the downward pressure on yields continued despite the rise in oil prices,” Goyal said.

“We are committed to prioritise and invest in network enhancement, superior guest experience and operational efficiencies at all touch points to ensure sustainable growth and value addition for stakeholders,” Goyal noted. He also added that the company has reduced its debt by Rs 1,902 crore despite weakening demand in certain international markets.

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