SpiceJet Q3 profit surges five-fold to ₹110 cr as air travel grows; stock up nearly 14%

SpiceJet Ltd returned to profit in the third quarter ending December at ₹23 crore as against a loss of ₹57 crore in the same quarter of last year.

SpiceJet profit was driven by “excellent logistics operations, rebound in passenger traffic and various accommodations from aircraft manufacturer and lessors,” the airline’s Ajay Singh said a statement, calling it a much needed turnaround. With Covid cases ebbing and travel picking up, “there was finally hope that the worst was behind us.

The company has incurred a one‐time exceptional adjustment of ₹77 crore on account of settlement with Boeing.

On Tuesday, after the announcement of results, SpiceJet shares rose 5.78% in noon deals at ₹62.20 apiece

The settlement with Boeing was a significant event during the quarter. As expected, the company received cash and non‐cash accommodations in excess of the amounts due to lessors during the period of grounding of MAX aircraft, SpiceJet said in a filing.

The airline recorded a 34% rise in the third quarter revenue to ₹2,259 crore as against ₹1,686 crore in the previous quarter as it added more destinations and newer aircraft to its flee.

“I am happy that SpiceJet reported a profit in Q3 FY22 driven by excellent logistics operations, rebound in passenger traffic and various accommodations from aircraft manufacturer and lessors,” said Ajay Singh.

“The passenger industry witnessed the much needed turnaround in third quarter as Covid cases ebbed in the first half of the quarter, travel picked up significantly and there was finally hope that the worst was behind us. However, that changed by the second half of December as Omicron halted that recovery. Our performance would have been much better but was impacted by the unexpected delay in the return to service of the 737 MAX, rising fuel costs and certain exceptional adjustments. I am happy to say that there are renewed signs of recovery in the passenger segment and the logistics segment continues to remain strong,” Ajay Singh added.

SpiceXpress, the Company’s logistics platform, continued on its growth trajectory reporting increased revenue of ₹584 crore for the reported quarter as compared to ₹498 crore in the last quarter, a jump of 17%.

The company plans to significantly increase freighter capacity in the coming quarter.

SpiceJet reported an EBITDA (earnings before interest, tax, depreciation and amortisation) of ₹511 crore as compared to a loss of ₹106 crore for the last quarter.

On an EBITDAR basis, the company reported a profit of ₹644 crore as against a profit of ₹66 crore for the last quarter.
 

SpiceJet is seeking to cut liabilities by as much as $300 million over six months and raise funds from banks and potentially a warrants issue, Singh said in November. Boeing Co. compensated SpiceJet “both in cash and in kind” for the losses it suffered when the 737 Max jets were grounded, Singh said then.

Rival airline IndiGo, India’s biggest carrier, also reported a surprise swing into profit in the same quarter but warned its capacity will reduce by about 10% to 15% in the current quarter compared to the preceding one.

SpiceJet, which controls 10.3% of the local market, was overtaken by Go Airlines India Ltd. in December as India’s second-largest airline. SpiceJet’s race to reclaim the No. 2 spot will also face stiff competition from Air India Ltd., which is headed for a revamp after Tata Sons formally took over the indebted carrier in January.

A dispute with its former owner, Kalanithi Maran, over share transfers is another challenge the airline needs to manage. Maran refused to accept Spicejet’s ₹600 crore payment offer on Monday and sought a higher settlement.

Source: https://www.livemint.com/market/stock-market-news/spicejet-q3-profit-surges-five-fold-to-rs-107-crore-as-air-travel-grows-11677230250144.html