SpiceJet posts a loss in Q4 on weak demand & suspension of flight operations due to COVID-19

SpiceJet, India's favourite airline and the biggest air cargo operator, reported a net loss of INR [807.1] crore in the fourth quarter of FY20 (that includes a non-cash loss of INR 473.4 crore due to forex loss on restatement of lease liability due to Ind-AS 116) against a profit of INR 56.3 crore in the same quarter of the previous year as business was adversely impacted due to the COVID-19 pandemic and the nation-wide lockdown that resulted in suspension of flight operations. The airline reported a net loss of INR 934.8 crore in FY 2020 (that includes a non-cash loss of INR 697.0 crore due to forex loss on restatement of lease liability due to Ind-AS 116)

For the Quarter ending March 2020

- Capacity (in terms of seat kilometre) up by 23%
- Operating loss of INR 333.7 crore. Non-cash Ind-AS 116 impact of INR 473.4 crore. Net loss of INR 807.1 crore compared to net profit of INR 56.3 crore in the same period last year
- Revenue from operations increased by 13% in spite of weak demand due to COVID-19
- Revenue from cargo increased by 94%
- Registers industry's highest domestic load factor of 90%

For the year ending March 2020

- EBITDAR profit of INR 1,636.8 crore
- Reports a net loss of INR 934.8 crore in FY2020; without forex impact under Ind-AS 116, net loss would have been INR 237.8 crore
- Passenger capacity up by 40%; substantial increase in cargo capacity
- Operating income up by 36%
- Aircraft fleet at 114 as on March 31, 2020
- Registers domestic load factor of 92%; clocked 90% plus PLF for a record 58 successive months till February'20.

Operating revenues were at INR 2,863.9 crore for the reported quarter and INR 12,358.6 crore for the fiscal 2020. On an EBITDA basis, loss was INR 223.6 crore for the reported quarter and profit of INR 1,273.9 crore for the fiscal 2020. On an EBITDAR basis, the loss is INR 90.9 crore for the reported quarter and profit of INR 1,636.8 crore for the fiscal 2020.

FY2020 posed multiple unprecedented challenges such as the COVID-19 pandemic and the world-wide grounding of the Boeing 737 MAX which led to the overnight grounding of SpiceJet's MAX fleet. On the grounded Boeing 737 MAX aircraft, the Company continues to incur various costs with respect to these aircraft and during this quarter ended March 30, 2020 on account of its inability to undertake revenue operations, the Company has recognized INR 134.5 crore towards aircraft and supplemental lease rentals and other identified expenses, as Other Income for the reported quarter. This is a part recognition of the total reimbursements, on which the Company is working with the aircraft manufacturer, towards various ascertained costs and losses incurred by the Company on this aircraft.

Ajay Singh, Chairman and Managing Director, SpiceJet, said, "Two key factors that adversely impacted our performance and bottom line was the COVID-19 pandemic that started affecting demand adversely from mid-February and grounding of the 737 MAX, which has been out of service for over a year now. Despite the year long grounding of the MAX aircraft, SpiceJet ran a profitable operation till COVID hit demand from mid-February. Indian and the global aviation industry are going through the toughest-ever phase in aviation history. We at SpiceJet have constantly adapted to the changing economic environment and I am happy that our cargo operations have performed very well. I am confident that things will only improve in the times to come. We remain cautious but optimistic about the future."

In terms of operational parameters, SpiceJet had the best passenger load factor amongst all airlines in the country during the quarter and the year. The average domestic load factor for the quarter was 90% while for fiscal 2020 it was 92%. For 58 months-in-a-row, SpiceJet has flown with over 90% load factors in the Indian aviation market.

Shares of SPICEJET LTD. was last trading in BSE at Rs.47.95 as compared to the previous close of Rs. 48.15. The total number of shares traded during the day was 150609 in over 879 trades.

The stock hit an intraday high of Rs. 48.95 and intraday low of 47.6. The net turnover during the day was Rs. 7235635.

Source : Equity Bulls

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