BOGOTA, Colombia--(BUSINESS WIRE)--Avianca Holdings S.A., (NYSE: AVH) (BVC: PFAVH), the following results pertain to the 2Q 2014, financial and operational information is provided in millions of US dollars unless stated otherwise. The following information is presented in accordance with International Financial Reporting Standards (IFRS). The reconciliation between IFRS and the financial information which is not in these accounting principles can be seen in the financial tables section of this report. Except when noted, all comparisons refer to second quarter 2013 (2Q 2013) numbers. Figures and operating metrics of Avianca Holdings S.A. (“Avianca”, “the Company”, “Issuer Entity” or “Issuer”) are presented on a consolidated basis.
| AVIANCA HOLDINGS S.A. | ||||
| Financial Highlights | ||||
|
(First 6 months ended June 30th) |
||||
|
|
||||
| 1H-13 | 1H-14 | |||
| Revenues | 2.2 bn | 2.2bn | ||
| EBITDAR | 344.9 | 326.2 | ||
| EBIT | 138.0 | 99.8 | ||
| Net Income | 147.5 | -9.7 | ||
| Net income* | 71.6 | 44.4 | ||
|
*Excluding Special Items |
||||
| 2Q-13 | 2Q-14 | ||||||
| Revenues | 1.10 bn | 1.14bn | |||||
| EBITDAR | 144.1 | 164.3 | |||||
| EBIT | 35.3 | 49.8 | |||||
| Net Income | 70.3 | -21.9 | |||||
| Net income* | 1.9 | 19.5 | |||||
|
*Excluding Special Items |
|||||||
|
Profitability |
||||
| (First 6 months ended June 30th) | ||||
| 1H-13 | 1H-14 | |||
| EBITDAR % | 15.5% | 14.5% | ||
| EBIT % | 6.2% | 4.4% | ||
| Net income % | 6.6% | -0.4% | ||
| Net Income%* | 3.2% | 2.0% | ||
|
*Excluding Special Items |
||||
| 2Q-13 | 2Q-14 | ||||||
| EBITDAR % | 13.0% | 14.4% | |||||
| EBIT % | 3.2% | 4.4% | |||||
| Net income % | 6.4% | -1.9% | |||||
| Net Income%* | 0.2% | 1.7% | |||||
|
*Excluding Special Items |
|||||||
|
Operational Highlights |
||||
| (First 6 months ended June 30th) | ||||
| 1H-13 | 1H-14 | |||
| Passengers | 11.9M | 12.5M | ||
| ASKs | 18.9b | 19.8b | ||
| RPKs | 15.0b | 15.5b | ||
| Load Factor | 79.5% | 78.3% | ||
| RASK | 11.8 | 11.3 | ||
| CASK | 11.1 | 10.8 | ||
| 2Q-13 | 2Q-14 | |||||||
| Passengers | 5.9M | 6.3M | ||||||
| ASKs | 9.5b | 9.9b | ||||||
| RPKs | 7.4b | 7.8b | ||||||
| Load Factor | 78.2% | 78.2% | ||||||
| RASK | 11.6 | 11.5 | ||||||
| CASK | 11.3 | 11.0 | ||||||
Second Quarter 2014 Highlights
- Avianca Holdings would have earned an adjusted net income of $19.5 million, excluding special items. Our adjusted net income margin came in at 1.7%. The Company earned an adjusted net income of $44.4 million, excluding special items, for the first six months of the year, while the adjusted net income margin for the first half was 2.0%.
- Operating revenues amounted to $1.14 billion, up 3.6% over 2Q 2013, mainly due to a 2.9% increase in passenger revenues, driven by an increase of 5.9% in passengers carried. In line with our cargo capacity expansion, improved capacity utilization and organic growth of our loyalty program Cargo and other revenues increased by 6.6%. As a result cargo load factor increased by 400 basis points. Operating revenues for the first half of 2014 totaled $2.2 billion, up 0.9% from the same period in 2013, while the cargo and other revenues continued to increase by 3.7%.
- Cost per available seat kilometer (CASK) for the period declined by 1.9%, whereas CASK ex fuel declined 4.0%. In accumulated terms, the CASK for the six-month period of 2014 also decreased by 2.0%.
- EBITDAR for 2Q 2014 was $164.3 million, while the EBITDAR margin reached 14.4%. The EBITDAR for the first half of 2014 totaled $326.2 million, while the EBITDAR margin reached 14.5%.
- Operating income (EBIT) totaled $49.8 million, as a result the operating margin for 2Q 2014 came in 116 basis point higher over the same period last year reaching 4.4%. The operating income excluding special items (EBIT) for the six-month period of 2014 was $99.8 million; as a result the operating margin for the first six months of 2014 was 4.4%.
- Capacity, measured in ASKs (available seat kilometers), increased by 4.4% during 2Q 2014, mostly due to the continued expansion in our home markets and the addition of larger aircraft. Furthermore, passenger traffic, measured in RPKs (revenue passenger kilometers), grew 4.3%, reaching a consolidated load factor of 78.2%. In accumulated terms, capacity, measured in ASKs, rose 4.9%, while passenger traffic, measured in RPKs, increased 3.3% during the first six months of 2014.
- In accordance with the fleet renovation and modernization plan, between April and June 2014, the company took delivery of one A330, one A321 aircraft, two A319 aircraft, and one ATR72. As a result, Avianca Holdings S.A. and subsidiaries ended the quarter with a consolidated operating fleet of 157 aircraft.
CEO's Comment
The second quarter of the year saw the continuation of our operational transition process, which aims to strengthen our revenue stream and profitability, while also enhancing our visibility and positioning as Latin America’s premier airline.
As we did during the first three months of the year, Avianca operated within a very challenging environment. Yet, we continued to successfully implement our ongoing relocation efforts, both in terms of increasing physical occupancy at Colombia’s El Dorado International Airport and redeploying of flights across the network towards profitable routes. In the second quarter, Avianca moved ~60% of its domestic capacity from the Puente Aereo Terminal (Terminal “T2”) to the new El Dorado Terminal (Terminal “T1”), which opened at the end of 2013. Our expanded capacity in the El Dorado Terminal has allowed us to increase service in high-density routes such as Medellin with the use of our new A321 aircraft, which has capacity for up to 194 passengers. This has made way for additional capacity in our Puente Aereo Terminal, which allowed us to expand service on secondary routes, such as Villavicencio. In addition, this change provides passengers with better connections throughout Colombia, as well as improved connectivity service between high-density domestic routes and our international network.
In terms of our international operations, on July 3rd we successfully initiated our service from Bogota to London with four weekly frequencies. We also incorporated additional capacity for our service to Santiago, through an additional non-stop frequency. Moreover, as part of our plan to strengthen our network, we continued to improve our connectivity to Central America and the Caribbean by increasing our service to Guatemala with six weekly frequencies (previously from four), to La Habana with five weekly frequencies (previously four) and to Puerto Rico with four weekly frequencies (previously three). Furthermore, to enhance our international connectivity we continued to expand our alliances by incorporating a code share agreement with Turkish Airlines, one of the major players in Europe and Middle East.
Alongside our plans to expand our network, we continued to implement our rebranding strategy. On June 18th, we successfully carried out the re branding initiative for our Ecuadorian carrier, Aerogal, in order to strengthen its image and standards. We expect to begin seeing the benefits of this image migration over the next few quarters, while enhancing our positioning in this market.
One of the factors that contributed to the increase of international passenger traffic during the second quarter of 2014 was the World Cup in Brazil. The event, which took place in June, supported higher international passenger traffic to and from Brazil from the connecting hubs of Bogota and Lima. The aggregate load factor to and from destinations in South America averaged above 79%; 357 basis points higher over the same period of last year.
During the second quarter of 2014, Avianca Holdings S.A. and its subsidiaries registered total net operating revenues of $ 1.14 billion, an increase of 3.6% compared to the same quarter of 2013. Furthermore, as the second quarter came in with improved revenues and a controlled cost structure, the company successfully expanded the operating margin by 116 basis points reaching 4.4%. We continue to optimize the deployed capacity while closely monitoring the evolution of the maturity of our international network. At the same time, we have initiated the implementation of the second phase of our integration process, which is focused on achieving further cost saving synergies.
The results of the quarter mainly reflect the seasonality of our business as the Brazil world cup took place and the summer high season begun, in addition to the incorporation of new fleet and the expansion of our network. As part of our fleet renovation and modernization process, Avianca Holdings added 5 new aircraft, through its subsidiaries, one A321, two A319, one A330 passenger aircraft as well as one ATR72 turboprop. As a result our operating fleet ended the quarter with 157 aircraft. We are confident that our strategy and long term vision will allow us to continue growing while at the same time improving our network capacity and profitability, creating value for our shareholders. In the months ahead we will continue leveraging our operating flexibility to strengthen Avianca’s positioning in the domestic markets and continue with our international growth, as Latin America continues to be the key market for the company.
Sincerely,
Fabio Villegas Ramirez
Chief Executive Officer
| Consolidated Financial and Operational Highlights | 2Q-13 | 2Q-14 | ∆ Vs. 2Q-13 | |||||||||||
| ASK's (mm) | 9,506 | 9,922 | 4.4 | % | ||||||||||
| RPK's (mm) | 7,435 | 7,756 | 4.3 | % | ||||||||||
|
Total Passengers (000´s) |
5,931 | 6,279 | 5.9 | % | ||||||||||
| Load Factor | 78.2 | % | 78.2 | % | 0.0 | % | ||||||||
| Departures | 63,208 | 68,320 | 8.1 | % | ||||||||||
| Block Hours | 118,962 | 125,124 | 5.2 | % | ||||||||||
| Stage length (km) | 1,242 | 1,231 | -0.8 | % | ||||||||||
| Fuel Consumption Gallons (000's) | 99,541 | 104,838 | 5.3 | % | ||||||||||
| Yield (cents) | 12.2 | 12.0 | -1.4 | % | ||||||||||
| RASK (cents) | 11.6 | 11.5 | -0.8 | % | ||||||||||
| PRASK (cents) | 9.5 | 9.4 | -1.4 | % | ||||||||||
| CASK (cents) | 11.3 | 11.0 | -1.9 | % | ||||||||||
| CASK ex, Fuel (cents) | 8.0 | 7.7 | -4.0 | % | ||||||||||
| CASK Adjusted (cents) (1) | 11.2 | 11.1 | -1.6 | % | ||||||||||
| CASK ex, Fuel Adjusted (cents) (1) | 7.9 | 7.7 | -3.4 | % | ||||||||||
| Foreign exchange (average) COP/US$ | $ | 1,863.2 | $ | 1,914.3 | 2.7 | % | ||||||||
| Foreign exchange (end of period) COP/US$ | $ | 1,929.0 | $ | 1,881.2 | -2.5 | % | ||||||||
| WTI (average) per barrel | $ | 94.1 | $ | 103.3 | 9.8 | % | ||||||||
| Jet Fuel Crack (average) per barrel | $ | 22.1 | $ | 17.6 | -20.5 | % | ||||||||
| US Gulf Coast ( Jet Fuel average) per barrel | $ | 116.2 | $ | 120.9 | 4.1 | % | ||||||||
| Fuel price per Gallon (including hedge) | $ | 3.14 | $ | 3.20 | 2.0 | % | ||||||||
| Operating Revenues ($M) | $ | 1,105.1 | $ | 1,144.7 | 3.6 | % | ||||||||
| EBITDAR ($M) | $ | 144.1 | $ | 164.3 | 14.0 | % | ||||||||
| EBITDAR Margin | 13.0 | % | 14.4 | % | 1.3 | % | ||||||||
| EBITDA ($M) | $ | 69.5 | $ | 94.9 | 36.6 | % | ||||||||
| EBITDA Margin | 6.3 | % | 8.3 | % | 2.0 | % | ||||||||
| Operating Income ($M) | $ | 35.3 | $ | 49.8 | 41.3 | % | ||||||||
| Operating Margin ($M) | 3.2 | % | 4.4 | % | 1.2 | % | ||||||||
| Net Income ($M) | $ | 70.3 | $ | (21.9 | ) | -131.2 | % | |||||||
| Net Income Margin | 6.4 | % | -1.9 | % | -8.3 | % | ||||||||
| EBITDAR (Adjusted) (1) ($M) | $ | 146.5 | $ | 162.5 | 10.9 | % | ||||||||
| EBITDAR Margin (Adjusted) (1) | 13.3 | % | 14.2 | % | 0.9 | % | ||||||||
| EBITDA (Adjusted) (1) ($M) | $ | 71.9 | $ | 93.1 | 29.4 | % | ||||||||
| EBITDA Margin (Adjusted) (1) | 6.5 | % | 8.1 | % | 1.6 | % | ||||||||
| Operating Income ($M) (Adjusted) (1) | $ | 37.7 | $ | 47.9 | 27.1 | % | ||||||||
| Operating Margin (Adjusted) (1) | 3.4 | % | 4.2 | % | 0.8 | % | ||||||||
| Adjusted Net Income ($M) (2) | $ | 1.9 | $ | 19.5 | 932.1 | % | ||||||||
| Net Income Margin (Adjusted) (2) | 0.2 | % | 1.7 | % | 1.5 | % | ||||||||
(Adjusted: Excluding non-cash Fx charges, gain or loss on assets as well as derivative instruments and one-time expenses associated to the phasing out of aircraft)
MANAGEMENT COMMENTS ON 2Q 2014 RESULTS AND FIRST HALF OF 2014 RESULTS
Avianca Holdings reached an operating income (EBIT) of $49.8 million for 2Q 2014, while the net operating income (EBIT) margin came in at 4.4%, an increase of 116 basis points over 2Q 2013. These results were mainly driven by the optimization of the available capacity (ASKs) as the leisure high season and the Brazil World Cup took place. As a result the company was able to increase its passenger numbers by 5.9%, partially offset by a 1.4% yield decline as a result of our capacity relocation efforts. Moreover our cargo business performance continued to improve as the company was able to better use the available capacity of the renovated A330 cargo fleet. As a result, cargo revenues increased by about 14% over the same period of last year. Furthermore the company continues with efforts geared towards the efficient use of our assets as well as control over our operational and administrative costs to further sustain and expand our profitability.
Operating revenues amounted to approximately $1.14 billion during 2Q 2014. This represents an increase of 3.6% over the same quarter in 2013. The results are primarily due to a 2.9% rise in passenger revenues. Furthermore our cargo and other revenues represented 18.5% of our total revenues and amounted to $212.3 million. This equals to an increase of 6.6% over the second quarter of 2013 mostly driven by a rise of 14.0% of our cargo revenues due to a growth of 20.0% in ATKs as well as an increase in RTKs of 29.6% over 2Q 2013, as a result the cargo Load Factor for the quarter increased 400 basis points reaching 62%. Operating revenues during the first half of 2014 totaled $2.24 billion. This represents an increase of approximately 1.0% over the same period in 2013. The results are due to a 4.6% increase in passengers carried, as well as a better performance from our cargo business unit, which increased load factors by 318 basis points over the same period of last year.
The company continued expanding its network through the domestic operations in Colombia as well as increasing its intra-home market connectivity (Colombia, El Salvador, Peru and Ecuador) and the international network in Central America. Therefore the company added 7 additional weekly frequencies respectively to the Bogota and Cali to Lima routes. Consequently passenger capacity expressed in ASKs increased 4.4% in 2Q 2014 over the same period in 2013. As a result capacity (ASKs) rose 4.9% over the first half of 2014.
Operating expenses for the second quarter of 2014 increased 2.3% amounting to $1.09 billion. These results include a 7.5% increase in fuel costs related to a 5.3% increase in fuel consumption driven by a 5.2% growth in block hours, in addition to jet fuel prices increase of 4.1%. Operating expenses were furthermore affected by an increase of depreciation and amortization of 31.8% mainly due to an increase in Avianca´s fleet as well as a reduction in the useful life of the A320 aircraft family from 30 to 25 years. Finally Sales and Marketing expenses declined 10.4% due to reductions in commission payments and advertising expenses. As a consequence operating expenses for the first half of 2014 increased 2.8% amounting to $2.1 billion.
As part of the company’s on-going fuel hedging strategy, by the end of second quarter of 2014, 130 million gallons, which represent approximately 31% of the total expected volume to be consumed over the next twelve months, were hedged at an average price of $ 2.89 / Gallon as follows: approximately 40% for 3Q 2014, 36% for 4Q 2014, through heating oil options and swaps and 34% for 1Q 2015 and 31% for 2Q 2015 through jet fuel swaps.
In accordance with the fleet renovation and modernization plan, between April and June 2014, the Company took delivery of five new aircraft: one A330, one A321 and two A319 aircraft, the last three equipped with sharklets and one ATR72 turboprop aircraft. As a result, Avianca Holdings S.A. and subsidiaries ended the quarter with a consolidated operating fleet of 157 aircraft.
The company recorded other non-operating expenses $70.4 million for the second quarter 2014, compared to a gain $49.2 million for the same quarter of 2013. Non-operating expenses include interest expenses related to incremental aircraft debt, additional debt service related to the bond placement carried in the second quarter of 2013 and 2014, partially offset by the debt repayment of the IFC loan, which total to $30.7 million compared to $25.7 million in 2Q 2013. In addition the Company registered a net loss related to the foreign exchange non-cash translation adjustments of $44.5 million compared to a net gain of $71.2 million for the same period of 2013. The difference is primarily due to a loss in foreign exchange translation adjustments, consisting of the net non-cash gain or loss from our monetary assets and liabilities denominated in Colombian pesos as well as our Venezuelan Bolivar denominated monetary assets subject to the USD exchange rate. During the first half of 2014, the company recorded other non-operating expenses of $105.1 million, compared to a net gain of $36.7 million for the same period of 2013.
The company’s cash and cash equivalents and available for sale securities ended the quarter at $766.0 million, which represent 16.5% of the last twelve month’s revenues. Including short term certificates and bank deposits, adjusted cash and cash equivalents and available for sale securities (other current assets) came in at $889.6 million. This represents 19.2% of last twelve month revenues. Of such cash $290.7 million have been requested to CENCOEX (previously CADIVI) and are pending repatriation.
As of June 30th, the company´s leverage position (Net Adjusted debt to EBITDAR1) remained stable at 4.7x.
1Net Adjusted Debt to EBITDAR: (Current Portion of Long Term debt + Long Term Debt + (Annual Rents Expense x 7) – Cash*) / EBITDAR
*Cash: Cash and cash equivalents + Restricted Cash + Available for sale securities + Short Term Certificates of bank deposits + Long Term Restricted Cash
2014 - OUTLOOK
Avianca Holdings S.A., through its affiliated airlines, reaffirms its 2014 FY outlook as follows:
|
Outlook Summary |
Full Year 2014 |
||
| Total Passengers Increase from 2013 | 8% - 9% | ||
| Capacity (ASK'S) Increase from 2013 | 7% - 8% | ||
| Load Factor | 77% - 79% | ||
| EBIT Margin | 5% - 7% | ||
CONSOLIDATED FINANCIAL RESULTS
Operating revenue
Our operating revenue amounted to $1.14 billion in 2Q 2014, a 3.6% increase over $1.11 billion in 2Q 2013. Our operating revenue per ASK came in at 11.5 cents in 2Q 2014 versus 11.6 cents in 2Q 2013.
Passenger revenue. Our passenger revenue was $932.4 million in 2Q 2014, a 2.9% increase over $906.0 million in 2Q 2013, primarily as a result of a 5.9% increase in passengers carried from 5.9 million in 2Q 2013 to 6.3 million in 2Q 2014. This was partially offset by a 1.4% decrease in yields. During the quarter passenger load factor remained stable at 78.2%.
Cargo and other. Our revenue from cargo and other was $212.3 million in 2Q 2014, a 6.6% increase from $199.1 million in 2Q 2013, primarily as a result of a 29.6% increase in cargo traffic (RTKs) and a 20% rise in capacity (ATKs) due to the improved usage of our renewed cargo fleet. As a result the Load factor for the quarter came in at 62%, increasing 400 bps over the same period in 2013.
Operating expenses
Operating expenses came in at $1.1 billion in 2Q 2014, a 2.3% increase over $1.07 billion in 2Q 2013. Our operating cost per ASK (CASK) came in at 11.0 cents a 1.9% decrease over the same period of last year. CASK ex fuel decreased 4.0% to 7.7 cents from 8.0 cents in 2013:
Flight operations. Flight operations expense was $20.2 million in 2Q 2014, a 5.8% decrease over $21.4 million in 2Q 2013, mainly as a result of a reduction of expenses related to consulting and outsourcing services, partially offset by an increase in pilot training expenses related to the new B787 fleet. In terms of unit cost per ASK, flight operations decreased 9.7% from 0.22 cents in 2Q 2013 to 0.20 cents in 2Q 2014.
Fuel. Fuel expense was $335.7 million in 2Q 2014, a 7.5% increase over $312.4 million in 2Q 2013, primarily as a result of a 5.3% increase in fuel consumption (gallons) and a 2.0% increase in our average “into-plane” fuel cost (fuel price plus taxes and distribution costs), from $3.14 per gallon in 2Q 2013 to $3.2 per gallon in 2Q 2014. The cost of fuel per ASK increased 3.0% in 2Q 2014 as a result of the foregoing.
Ground operations. Ground operations expense was $87.5 million in 2Q 2014, a 0.9% decrease over $88.3 million in 2Q 2013. These results are primarily driven by a decrease for cargo handling services, which are partially offset by an increase for landing and ramp services associated to an 8.1% increase in cycles. Unit cost per ASK ground operations declined 5.1% from 0.93 cents in 2Q 2013 to 0.88 cents in 2Q 2014.
Aircraft rentals. Aircraft rentals expense was $69.4 million in 2Q 2014, a 7.0% decrease over $74.6 million in 2Q 2013, primarily as a result of returns of leased aircraft, as well as renegotiation and extension of prior lease terms agreements. In terms of unit cost per ASK, aircraft rentals decreased 10.9 % from 0.78 cents in 2Q 2013 to 0.70 cents in 2Q 2014.
Passenger services. Passenger services expense was $38.2 million in 2Q 2014, a 7.8% increase over $35.5 million in 2Q 2013, primarily as a result of a 5.9% increase in passengers carried resulting in additional expenses for VIP lounges, onboard food and beverages as well as higher costs in handling and onboard supplies. In terms of unit cost per ASK, passenger services increased 3.3% from 0.37 cents to 0.39 cents in 2Q 2014.
Maintenance and repairs. Maintenance and repairs expense was $56.6 million in 2Q 2014, a 3.9% increase over $54.4 million in 2Q 2013, primarily as a result of a 5.2% increase in block hours, which was partially offset by a decrease in engine maintenance expenses as a result of our ongoing fleet renovation program. In terms of unit cost per ASK, maintenance and repairs decreased 0.4% from 0.573 cents to 0.57 cents in 2Q 2014.
Air traffic. Air traffic expense was $44.9 million in 2Q 2014, a 5.6 % increase over $42.5 million in 2Q 2013, primarily as a result of an increase of 5.9% in passengers carried associated to the compensation costs related to baggage claims, flight delays and cancelations. In terms of unit cost per ASK, air traffic expenses remained stable at 0.45 cents.
Sales and marketing. Sales and marketing expenses were $157.7 million in 2Q 2014, a 10.4% decrease over $176.0 million in 2Q 2013, primarily as a result of lower costs related to promotions, miles program, redemptions with airline and commercial partners, as well as fewer costs related to the rebranding efforts of the new Avianca. In terms of unit cost per ASK, sales and marketing expenses decreased 14.2%, from 1.85 cents in 2Q 2013 to 1.59 cents in 2Q 2014.
General, administrative and other. General, administrative and other expenses were $58.1 million in 2Q 2014, a 4.9 % decrease from $ 61.1 million in 2Q 2013, mainly due to a gain on the sale of four Fokker 50 aircraft which had been grounded during 1Q 2014. In terms of unit cost per ASK, General, administrative and other expenses decreased by 8.8%, from 0.64 cents in 2Q 2013 to 0.59 cents in 2Q 2014.
Salaries, wages and benefits. Salaries, wages and benefits expenses were $181.6 million in 2Q 2014, a 7.1 % increase over $169.5 million in 2Q 2013, primarily as a result of an increase of 4.3% in the number of administrative personnel and 10.1 % in operational staff. In terms of unit cost per ASK, salaries, wages and benefits increased by 2.6% from 1.78 cents in 2Q 2013 to 1.83 cents in 2Q 2014.
Depreciation and amortization. Depreciation and amortization expense was $45.1 million in 2Q 2014, representing a $10.9 million increase over 2Q 2013, primarily related to the higher depreciation of the new aircraft in the fleet (Including seven ATR72, four A319 and three A330F, among others) and the change in the useful life of the A320 aircraft family from 30 to 25 years. Unit cost per ASK, depreciation and amortization expense increased from 0.36 cents in 2Q 2014 to 0.45 cents in 2Q 2013.
|
Analysis by ASKs |
||||||
|
2Q-2013 |
2Q-2014 |
VAR% |
||||
| Operating revenue: | ||||||
| Passenger | 9.53 | 9.40 | -1.4% | |||
| Cargo and other | 2.09 | 2.14 | 2.2% | |||
| Total operating revenues | 11.63 | 11.54 | -0.8% | |||
| Operating expenses: | ||||||
| Flight operations | 0.22 | 0.20 | -9.7% | |||
| Aircraft fuel | 3.29 | 3.38 | 3.0% | |||
| Ground operations | 0.93 | 0.88 | -5.1% | |||
| Aircraft rentals | 0.78 | 0.70 | -10.9% | |||
| Passenger services | 0.37 | 0.39 | 3.3% | |||
| Maintenance and repairs | 0.57 | 0.57 | -0.4% | |||
| Air traffic | 0.45 | 0.45 | 1.1% | |||
| Sales and marketing | 1.85 | 1.59 | -14.2% | |||
| General, administrative, and other | 0.64 | 0.59 | -8.8% | |||
| Salaries, wages and benefits | 1.78 | 1.83 | 2.6% | |||
| Depreciation and amortization | 0.36 | 0.45 | 26.3% | |||
| Total operating expense | 11.25 | 11.04 | -1.9% | |||
| Operating income | 0.37 | 0.50 | 35.4% | |||
| Total CASK | 11.25 | 11.04 | -1.9% | |||
| CASK ex. Fuel | 7.97 | 7.65 | -4.0% | |||
| Total CASK Adjusted | 11.23 | 11.05 | -1.6% | |||
| CASK ex. Fuel Adjusted | 7.94 | 7.67 | -3.4% | |||
| Yield | 12.19 | 12.02 | -1.4% | |||
|
EBITDAR Calculation excluding special items |
|||||||||
|
2Q-13 |
2Q-14 |
Var% |
|||||||
| Operating Revenues | 1,105.1 | 1,144.7 | |||||||
| Operating Expenses | 757.5 | 759.2 | |||||||
| Aircraft Fuel | 312.4 | 335.7 | |||||||
| Operating Income - EBIT | 35.3 | 49.8 | 41.3% | ||||||
| Margin | 3.2% | 4.4% | |||||||
| (+) Depreciation and amortization | 34.2 | 45.1 | |||||||
| EBITDA | 69.5 | 94.9 | 36.6% | ||||||
| Margin | 6.3% | 8.3% | |||||||
| (+) Aircraft Rentals | 74.6 | 69.4 | |||||||
| EBITDAR | 144.1 | 164.3 | 14.0% | ||||||
| Margin | 13.0% | 14.4% | |||||||
|
Non IFRS financial measure reconciliation |
||||||
| Reconciliation of Net Income excluding special Items | ||||||
|
2Q-13 |
2Q-14 |
Var% |
||||
| Net Income as Reported | $ 70.3 | $ (21.9) | -131.2% | |||
| Special items (adjustments): | ||||||
| (-) Gain on sale of property and equipment | $ (2.5) | $ 1.9 | ||||
| (-) Derivative Instruments | $ (0.3) | $ 1.2 | ||||
| (-) Foreign exchange gain (loss) | $ 71.2 | $ (44.5) | ||||
| Net Income Adjusted | $ 1.9 | $ 19.5 | 933.2% | |||
| Reconciliation of Operating Cost per ASK excluding special items | ||||||
|
2Q-13 |
2Q-14 |
Var% |
||||
| Total CASK as reported | 11.3 | 11.0 | -1.9% | |||
| Aircraft Fuel | 3.3 | 3.4 | ||||
| Total CASK excluding Fuel as reported | 8.0 | 7.7 | -4.0% | |||
| Gain on sale of property and equipment | (0.03) | 0.02 | ||||
| Total CASK excluding Fuel and special items | 7.9 | 7.7 | -3.4% | |||
| EBITDAR Calculation excluding special items | ||||||
|
2Q-13 |
2Q-14 |
Var% |
||||
| Operating Revenues as reported | 1,105.1 | 1,144.7 | ||||
| Operating Expenses | 757.5 | 759.2 | ||||
| Aircraft Fuel | 312.4 | 335.7 | ||||
| Operating Income as reported | 35.3 | 49.8 | 41.3% | |||
| (-) Gain on sale of property and equipment | (2.5) | 1.9 | ||||
| Operating Income adjusted | 37.7 | 47.9 | 27.1% | |||
| (+) Depreciation and amortization | 34.2 | 45.1 | ||||
| EBITDA Adjusted | 71.9 | 93.1 | 29.4% | |||
| Margin | 6.5% | 8.1% | ||||
| (+) Aircraft Rentals | 74.6 | 69.4 | ||||
| EBITDAR Adjusted | 146.5 | 162.5 | 10.9% | |||
| Margin | 13.3% | 14.2% | ||||
|
Interim Condensed Consolidated Statement
of Comprehensive Income for the three-month period |
||||||
|
2Q 2013 |
2Q 2014 | Var % | ||||
| Operating revenue: | ||||||
| Passenger | 906,029 | 932,368 | 2.9% | |||
| Cargo and other | 199,120 | 212,331 | 6.6% | |||
| Total operating revenues | 1,105,149 | 1,144,699 | 3.6% | |||
| Operating expenses: | ||||||
| Flight operations | 21,387 | 20,154 | -5.8% | |||
| Aircraft fuel | 312,355 | 335,669 | 7.5% | |||
| Ground operations | 88,333 | 87,507 | -0.9% | |||
| Aircraft rentals | 74,606 | 69,392 | -7.0% | |||
| Passenger services | 35,472 | 38,238 | 7.8% | |||
| Maintenance and repairs | 54,440 | 56,569 | 3.9% | |||
| Air traffic | 42,495 | 44,858 | 5.6% | |||
| Sales and marketing | 176,020 | 157,709 | -10.4% | |||
| General, administrative, and other | 61,090 | 58,126 | -4.9% | |||
| Salaries, wages and benefits | 169,473 | 181,550 | 7.1% | |||
|
Depreciation, amortization and impairment |
34,223 | 45,114 | 31.8% | |||
| Total operating expense | 1,069,894 | 1,094,886 | 2.3% | |||
| Operating profit | 35,255 | 49,813 | 41.3% | |||
| Other non-operating income (expense): | ||||||
| Interest expense | (25,670) | (30,710) | 19.6% | |||
| Interest income | 3,959 | 3,669 | -7.3% | |||
| Derivative instruments | (318) | 1,201 | -477.7% | |||
| Foreign exchange | 71,215 | (44,527) | -162.5% | |||
| Profit before income tax | 84,441 | (20,554) | -124.3% | |||
| Income tax expense- current | 3,383 | (5,753) | -270.1% | |||
| Income tax expense- deferred | (17,502) | 4,363 | -124.9% | |||
| Total income tax expense | (14,119) | (1,390) | -90.2% | |||
| Net (loss) profit | 70,322 | (21,944) | -131.2% | |||
| (Loss) profit attributable to: | ||||||
| Equity holders of the parent | 71,681 | (21,369) | -129.0% | |||
| Non-controlling interest | (1,359) | (575) | -57.7% | |||
| Net (loss) profit | 70,322 | (21,944) | -131.2% | |||
|
Interim Condensed Consolidated Statement of Financial Position (Unaudited in USD thousands) |
||||
|
As of June 30, 2014 |
As of December 31, 2013 |
|||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | 763,959 | 735,577 | ||
| Restricted cash | 4,150 | 23,538 | ||
| Available for sale securities | 1,692 | — | ||
| Accounts receivable, net of provision | ||||
| for doubtful accounts | 313,465 | 276,963 | ||
| Accounts receivable from related parties | 33,748 | 26,425 | ||
| Expendable spare parts and supplies, | ||||
| net of provision for obsolescence | 57,877 | 53,158 | ||
| Prepaid expenses | 67,605 | 46,745 | ||
| Assets held for sale | 11,862 | 7,448 | ||
| Deposits and other assets | 201,645 | 125,334 | ||
| Total current assets | 1,456,003 | 1,295,188 | ||
| Non-current assets: | ||||
| Available for sale securities | 315 | 14,878 | ||
| Deposits and other assets | 214,792 | 189,176 | ||
| Accounts receivable, net of provision | ||||
| for doubtful accounts | 34,140 | 32,441 | ||
| Intangibles | 372,000 | 363,103 | ||
| Deferred tax assets | 57,038 | 50,893 | ||
| Property and equipment, net | 3,488,471 | 3,233,358 | ||
| Total non-current assets | 4,166,756 | 3,883,849 | ||
| Total assets | 5,622,759 | 5,179,037 | ||
| LIABILITIES AND EQUITY | ||||
| Current liabilities: | ||||
| Loans and current portion of long-term debt | 338,033 | 314,165 | ||
| Accounts payable | 458,323 | 509,129 | ||
| Accounts payable to related parties | 9,356 | 7,553 | ||
| Accrued expenses | 168,053 | 134,938 | ||
| Provisions for legal claims | 17,239 | 14,984 | ||
| Provisions for return conditions | 51,518 | 33,033 | ||
| Employee benefits | 53,815 | 52,392 | ||
| Air traffic liability | 624,568 | 564,605 | ||
| Other liabilities | 29,097 | 27,432 | ||
| Total current liabilities | 1,750,002 | 1,658,231 | ||
| Non-current liabilities: | ||||
| Long-term debt | 2,353,124 | 1,951,330 | ||
| Accounts payable | 3,768 | 2,735 | ||
| Provisions for return conditions | 75,295 | 56,065 | ||
| Employee benefits | 257,563 | 276,284 | ||
| Deferred tax liabilities | 7,379 | 7,940 | ||
| Other liabilities | 14,956 | 11,706 | ||
| Total non-current liabilities | 2,712,085 | 2,306,060 | ||
| Total liabilities | 4,462,087 | 3,964,291 | ||
| Equity: | ||||
| Common stock | 83,225 | 83,225 | ||
| Preferred stock | 41,398 | 41,398 | ||
| Additional paid-in capital | 236,342 | 236,342 | ||
| Additional paid-in capital on preferred stock | 467,498 | 467,498 | ||
| Retained earnings | 298,316 | 351,102 | ||
| Other comprehensive income | 28,857 | 28,857 | ||
| Revaluation | ||||
| Total equity attributable to AVH | 1,155,636 | 1,208,422 | ||
| Noncontrolling interest | 5,036 | 6,324 | ||
| Total equity | 1,160,672 | 1,214,746 | ||
| Total liabilities and equity | 5,622,759 | 5,179,037 | ||
Notes with regard to the statement of future expectations
This report contains statements of future expectations.
These may include words such as “expect”, “estimate”, “anticipate” “forecast”, “plan”, “believe” and similar expressions. These statements and the statements regarding the Company’s beliefs and expectations do not represent historical facts and are based on current plans, projections, estimates, forecasts and therefore you should not place undue reliance on them. Statements regarding future expectations involve certain risks and uncertainties. Forward-looking statements involve inherent known and unknown risks, uncertainties and other factors, many of which are outside of the Company’s control and difficult to predict. Avianca Holdings S.A. warns that a significant number of factors may cause the actual results to be materially different from those contained in any statement with regard to future expectations. Statements of this kind refer only to the date on which they are made, and the Company does not take responsibility for publicly updating any of them due to the occurrence of future or other events.
GLOSSARY OF OPERATING PERFORMANCE TERMS
This report contains terms relating to operating performance that are commonly used in the airline industry and are defined as follows:
“Aircraft utilization” represents the average number of block hours operated per day per aircraft for an aircraft fleet.
“Available seat kilometers,” or ASKs, represents aircraft seating capacity multiplied by the number of kilometers the seats are flown.
“Available ton kilometers,” or ATKs, represents cargo ton capacity multiplied by the number of kilometers the cargo is flown.
“Block hours” refers to the elapsed time between an aircraft leaving an airport gate and arriving at an airport gate.
“CASK excluding fuel” represents operating expenses other than fuel divided by available seat kilometers (ASKs).
“Code share alliance” refers to our code share agreements with other airlines with whom we have business arrangements to share the same flight. A seat can be purchased on one airline but is actually operated by a cooperating airline under a different flight number or code. The term “code” refers to the identifier used in flight schedules, generally the two-character IATA airline designator code and flight number. Code share alliances allow greater access to cities through a given airline’s network without having to offer extra flights, and makes connections simpler by allowing single bookings across multiple planes.
“Cost per available seat kilometer,” or CASK, represents operating expenses divided by available seat kilometers (ASKs).
“Load factor” represents the percentage of aircraft seating capacity that is actually utilized and is calculated by dividing revenue passenger kilometers by available seat kilometers (ASKs).
“Operating revenue per available seat kilometer,” or RASK, represents operating revenue divided by available seat kilometers (ASKs).
“Revenue passenger kilometers,” or RPKs, represent the number of kilometers flown by revenue passengers.
“Revenue passengers” represents the total number of paying passengers (which do not include passengers redeeming LifeMiles (previously known as AviancaPlus or Distancia) frequent flyer miles or other travel awards) flown on all flight segments (with each connecting segment being considered a separate flight segment).
“Revenue ton kilometers,” or RTKs, represents the total cargo tonnage uplifted multiplied by the number of kilometers the cargo is flown.
“Technical dispatch reliability” represents the percentage of scheduled flights that are not delayed at departure more than 15 minutes or cancelled, in each case due to technical problems.
“Yield” represents the average amount one passenger pays to fly one kilometer, or passenger revenue divided by revenue passenger kilometers (RPKs).
AVIANCA HOLDINGS 2014
SECOND QUARTER EARNINGS RESULTS CONFERENCE
Call day: August 15
ENGLISH
Hour: 10:00 - 11:00 a.m.
(10:00 a.m. New York / 09:00 a.m. Colombia)
Click here to enter: http://www.yourconferencecenter.com/r.aspx?p=1&a=UZdPgTsjRWGrCk
ESPANOL
Hora: 9:00 - 10:00 a.m.
(9:00 a.m. Nueva York / 08:00 a.m. Colombia)
Hax clic aqui para entrar: http://www.yourconferencecenter.com/r.aspx?p=1&a=UQKFXvmoRMgnkn