PR Newswire
MEXICO CITY, April 29, 2014
MEXICO CITY, April 29, 2014 /PRNewswire/ -- Volaris* (NYSE: VLRS and BMV: VOLAR), the ultra-low-cost airline serving Mexico and the US, today announced its financial results for the first quarter 2014.
First Quarter 2014 Highlights
The following financial information, unless otherwise indicated, is presented in accordance with International Financial Reporting Standards (IFRS). Unless otherwise stated, all comparisons with prior periods refer to the first quarter of 2013.
Volaris CEO Enrique Beltranena commented: "In the first quarter of 2014, market conditions were very difficult. While I am disappointed in the quarter's financial results, we responded well to the challenges. We managed capacity and pricing in a responsible way, reaffirmed our cost control discipline and grew non-ticket revenues. The entire team remains sharply focused on driving significant long term value growth and financial success, by firmly executing our Volaris ULCC model.
A Challenging Macroeconomic Environment in the First Quarter …
… but the Volaris ULCC Model Further Strengthened
First Quarter Operating Revenues: Slower Mexican Economy, Tough Year Over Year Comps
Volaris booked 2.2 million passengers in the first quarter 2014. This equates to a 10% growth rate in the first quarter 2014 as compared to the first quarter in 2013, even though Holy week occurred in April this year.
Volaris traffic (measured in terms of revenue passenger miles or RPMs) increased 11% in the first quarter 2014 year over year.
While the increase in passenger volume and improving RPMs highlight our growth in the market, the weak Mexican economy and competitive pricing environment resulted in a weak fare environment. In response to these market conditions, we elected to modulate our ASM growth in the period to 11% year over year, and even reducing by 7% versus the fourth quarter 2013.
For the first quarter 2014, Volaris' total operating revenues were Ps.2,775 million, a decrease of 9.3% year over year. Average fare decreased 20.7% in the first quarter 2014 year over year.
During the first quarter 2014, our non-ticket revenues and non-ticket revenues per passenger reached Ps.514 million and Ps.238, respectively. Non-ticket revenue excluding cargo per passenger increased 10% in the first quarter year over year.
Passenger revenue per available seat mile (RASM) was 21% lower compared to the first quarter 2013, and total operating revenue per available seat mile (TRASM) was 18% lower, resulting from a weak fare environment.
Continued Cost Discipline Strengthens "Lowest Cost Operator in the Americas" Position
CASM for the first quarter 2014 was Ps.119.0 cents (US$9.1 cents), a 2.6% reduction compared to the first quarter of 2013, primarily driven by efficiency benefits and sustained cost control discipline. CASM excluding fuel also decreased 2.3% year over year to Ps.72.1 cents (US$5.5 cents) in the first quarter 2014 and we remain the lowest CASM operator in the Americas.
Reflecting our strategy to further reduce unit costs, Volaris has continued to take deliveries of larger sharklet-equipped A320 aircraft, bringing our seat mix of A320/A319 to a 59/41 percent split.
We further reduced sales, marketing and distribution expenses to 5.7% as percent of total operating revenues, mainly due to our reservations system change.
Strong Balance Sheet and Liquidity Supports Strategy and Plans for 2014 and Beyond
As of March 31, 2014, Volaris had Ps.2,240 million in unrestricted cash and cash equivalents. The Company recorded negative net debt (or a positive net cash position) of Ps.1,573 million and total equity was Ps.3,593 million.
During the first quarter 2014, Volaris incurred capital expenditures of Ps.228 million, which included pre-delivery payments for future deliveries of aircraft net of refunds of Ps.83 million and acquisitions of rotable spare parts, furniture and equipment of Ps.145 million.
Young and Fuel Efficient Fleet Underpins Long Term Growth/Increasing Cost Efficiency
As of March 31, 2014, the Company´s fleet was comprised of 46 aircraft (27 A320s and 19 A319s), with an average age of 4.0 years. During the first quarter of 2014 Volaris received three new sharklet-equipped A320s and returned one vintage A319.
Investors are urged to read carefully the Company's periodic reports filed with or furnished to the Securities and Exchange Commission, for additional information regarding the Company.
Conference Call/Webcast Details:
Volaris will conduct a conference call to discuss these results tomorrow, April 29, 2014, at 11:00 a.m. ET. A live audio webcast of the conference call will be available to the public on a listen-only basis at http://ir.volaris.com
About Volaris:
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. ("Volaris" or the "Company") (NYSE: VLRS and BMV: VOLAR), is an ultra-low-cost carrier (ULCC), with "point to point" service, serving Mexico and the US. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. Since beginning operations in March 2006, Volaris has increased its routes from five to more than 100 and its fleet from four to 46 aircraft. Volaris offers more than 200 daily flight segments on routes that connect 33 cities in Mexico and 13 cities in the United States with the youngest aircraft fleet in Mexico. Volaris targets passengers who are visiting friends and relatives, cost-conscious business people and leisure travelers in Mexico and to select destinations in the United States. Volaris has received the ESR Award for Social Corporate Responsibility for three consecutive years.
For more information, please visit: www.volaris.com
Forward-looking Statements:
Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations or beliefs concerning future events. When used in this release, the words "expects," "estimates," "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "outlook," "may," "will," "should," "seeks," "targets" and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe the Company's objectives, plans or goals, or actions the Company may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company's intentions and expectations regarding the delivery schedule of aircraft on order, announced new service routes and customer savings programs. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to a number of factors that could cause the Company's actual results to differ materially from the Company's expectations, including the competitive environment in the airline industry; the Company's ability to keep costs low; changes in fuel costs; the impact of worldwide economic conditions on customer travel behavior; the Company's ability to generate non-ticket revenues; and government regulation. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings.
Investor Relations Contact:
Andres Pliego / Investor Relations / ir@volaris.com / +52 55 5261 6444
Media Contact:
Jimena Llano / jimena.llano@volaris.com / +52 1 55 4577 0857
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. and Subsidiaries | ||||
Unaudited |
Three months ended |
Three months ended March 31, 2014 |
Three months ended March 31, 2013 |
Var |
Total operating revenues (millions) |
212 |
2,775 |
3,062 |
(9.3%) |
Total operating expenses (millions) |
249 |
3,263 |
3,024 |
7.9% |
EBIT (millions) |
(37) |
(488) |
38 |
NA |
EBIT margin |
(17.6%) |
(17.6%) |
1.2% |
(18.8) pp |
Adjusted EBITDA (millions) |
(33) |
(430) |
119 |
NA |
Adjusted EBITDA margin |
(15.5%) |
(15.5%) |
3.9% |
(19.4) pp |
Adjusted EBITDAR (millions) |
12 |
162 |
634 |
(74.4%) |
Adjusted EBITDAR margin |
5.9% |
5.9% |
20.7% |
(14.8) pp |
Net loss (millions) |
(28) |
(370) |
(65) |
>100% |
Net margin |
(13.3%) |
(13.3%) |
(2.1%) |
(11.2) pp |
Earnings per share: |
||||
Basic (cents) |
- |
(0.37) |
(0.08) |
>100% |
Diluted (cents) |
- |
(0.37) |
(0.08) |
>100% |
Earnings per ADS: |
||||
Basic (cents) |
(0.28) |
(3.66) |
(0.78) |
>100% |
Diluted (cents) |
(0.28) |
(3.66) |
(0.78) |
>100% |
Weighted average shares outstanding: |
||||
Basic |
- |
1,011,876,677 |
796,916,380** |
27.0% |
Diluted |
- |
1,011,876,677 |
796,916,380** |
27.0% |
Available seat miles (ASMs) (millions) |
- |
2,742 |
2,475 |
10.8% |
Revenue passenger miles (RPMs) (millions) |
- |
2,214 |
2,000 |
10.7% |
Load factor |
- |
80.7% |
80.8% |
(0.1)pp |
Total operating revenue per ASM (TRASM) (cents) |
7.7 |
101.2 |
123.7 |
(18.2%) |
Passenger revenue per ASM (RASM) (cents) |
6.3 |
82.5 |
104.5 |
(21.1%) |
Passenger revenue per RPM (yield) (cents) |
7.8 |
102.1 |
129.4 |
(21.0%) |
Average fare |
80.0 |
1,046 |
1,320 |
(20.7%) |
Non-ticket revenue per passenger |
18.2 |
238 |
242 |
(1.6%) |
Non-ticket revenue excluding cargo per passenger |
15.9 |
208 |
190 |
9.8% |
Operating expenses per ASM (CASM) (cents) |
9.1 |
119.0 |
122.2 |
(2.6%) |
CASM ex fuel (cents) |
5.5 |
72.1 |
73.7 |
(2.3%) |
Booked passengers (thousands) |
- |
2,161 |
1,961 |
10.2% |
Departures |
- |
16,823 |
15,699 |
7.2% |
Block hours |
- |
45,250 |
42,232 |
7.1% |
Fuel gallons consumed (millions) |
- |
31.6 |
29.2 |
8.2% |
Average economic fuel cost per gallon |
3.1 |
40.8 |
41.1 |
(0.7%) |
Aircraft at end of period |
- |
46 |
43 |
7.0% |
Average aircraft utilization (block hours) |
- |
12.4 |
11.9 |
4.9% |
Average exchange rate |
- |
13.23 |
12.66 |
4.6% |
*Peso amounts were converted to US dollars at the rate of Ps.13.0837 for convenience purposes only. | ||||
**Per share amounts reflect the retrospective application of the stock split adopted on June 11, 2013. |
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. and Subsidiaries | ||||
Unaudited |
Three months ended March 31, 2014 |
Three months ended March 31, 2014 |
Three months ended March 31, 2013 |
Var |
Operating revenues: |
||||
Passenger |
173 |
2,261 |
2,588 |
(12.6%) |
Non-ticket |
39 |
514 |
474 |
8.5% |
212 |
2,775 |
3,062 |
(9.3%) | |
Other operating income |
- |
(4) |
(24) |
(84.6%) |
Fuel |
98 |
1,287 |
1,199 |
7.4% |
Aircraft and engine rent expense |
45 |
593 |
514 |
15.3% |
Salaries and benefits |
30 |
389 |
363 |
7.2% |
Landing, take-off and navigation expenses |
40 |
520 |
461 |
12.8% |
Sales, marketing and distribution expenses |
12 |
158 |
187 |
(15.5%) |
Maintenance expenses |
12 |
159 |
141 |
12.2% |
Other operating expenses |
8 |
105 |
102 |
2.4% |
Depreciation and amortization |
4 |
58 |
81 |
(29.0%) |
Operating expenses |
249 |
3,263 |
3,024 |
7.9% |
Operating (loss) income |
(37) |
(488) |
38 |
NA |
Finance income |
- |
5 |
4 |
12.4% |
Finance cost |
- |
(5) |
(18) |
(70.8%) |
Exchange gain (loss), net |
1 |
11 |
(108) |
NA |
Comprehensive financing result |
1 |
11 |
(122) |
NA |
Loss before income tax |
(36) |
(477) |
(84) |
>100% |
Income tax benefit |
8 |
107 |
19 |
>100% |
Net loss |
(28) |
(370) |
(65) |
>100% |
Attribution of net loss: |
||||
Equity holders of the parent |
(28) |
(370) |
(62) |
>100% |
Non-controlling interest |
- |
- |
(2) |
NA |
Net loss |
(28) |
(370) |
(65) |
>100% |
*Peso amounts were converted to US dollars at the rate of Ps.13.0837 for convenience purposes only. |
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. and Subsidiaries | ||||
(In millions of Mexican pesos) |
March 31, 2014 |
March 31, 2014 |
December 31, 2013 | |
(US Dollars)* | ||||
Assets |
||||
Cash and cash equivalents |
171 |
2,240 |
2,451 | |
Accounts receivable |
51 |
671 |
602 | |
Inventories |
9 |
123 |
114 | |
Prepaid expenses and other current assets |
26 |
338 |
323 | |
Financial instruments |
- |
2 |
11 | |
Guarantee deposits |
39 |
512 |
499 | |
Total current assets |
297 |
3,886 |
4,000 | |
Rotable spare parts, furniture and equipment, net |
116 |
1,520 |
1,341 | |
Intangible assets, net |
6 |
73 |
79 | |
Deferred income tax |
32 |
416 |
305 | |
Guarantee deposits |
210 |
2,750 |
2,603 | |
Other assets |
4 |
58 |
49 | |
Total assets |
665 |
8,702 |
8,378 | |
Liabilities |
||||
Unearned transportation revenue |
138 |
1,804 |
1,393 | |
Accounts payable |
39 |
508 |
537 | |
Accrued liabilities |
74 |
974 |
1,033 | |
Taxes and fees payable |
67 |
876 |
599 | |
Financial instruments |
2 |
31 |
32 | |
Financial debt |
10 |
136 |
268 | |
Other liabilities |
1 |
12 |
9 | |
Total short-term liabilities |
332 |
4,340 |
3,872 | |
Financial instruments |
5 |
66 |
74 | |
Financial debt |
41 |
531 |
294 | |
Accrued liabilities |
10 |
130 |
138 | |
Other liabilities |
1 |
12 |
11 | |
Employee benefits |
- |
6 |
5 | |
Deferred income taxes |
2 |
24 |
22 | |
Total liabilities |
390 |
5,109 |
4,415 | |
Equity |
||||
Capital stock |
227 |
2,974 |
2,974 | |
Treasury shares |
(8) |
(108) |
(108) | |
Contributions for future capital increases |
- |
- |
- | |
Legal reserve |
3 |
38 |
38 | |
Additional paid-in capital |
136 |
1,786 |
1,786 | |
Accumulated losses |
(79) |
(1,031) |
(661) | |
Accumulated other comprehensive losses |
(5) |
(66) |
(66) | |
Total equity attributable to equity holders of the parent |
275 |
3,593 |
3,962 | |
Non-controlling interest |
- |
- |
- | |
Total equity |
275 |
3,593 |
3,962 | |
Total liabilities and equity |
665 |
8,702 |
8,378 | |
Total shares outstanding basic and diluted |
1,011,876,677 |
1,011,876,677 | ||
*Peso amounts were converted to US dollars at the rate of Ps.13.0837 for convenience purposes only. |
||||
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. and Subsidiaries | |||
Unaudited |
Three months ended March 31, 2014 |
Three months ended March 31, 2014 |
Three months ended March 31, 2013 |
Net cash flow (used in) provided by operating activities |
(7) |
(86) |
272 |
Net cash flow (used in) provided by investing activities |
(17) |
(227) |
62 |
Net cash flow provided by (used in) financing activities |
8 |
99 |
(204) |
(Decrease) increase in cash and cash equivalents |
(16) |
(215) |
129 |
Net foreign exchange differences |
- |
4 |
(25) |
Cash and cash equivalents at beginning of period |
187 |
2,451 |
822 |
Cash and cash equivalents at end of period |
171 |
2,240 |
926 |
*Peso amounts were converted to US dollars at the rate of Ps.13.0837 for convenience purposes only. |
SOURCE Volaris