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15-11-2011, 05:40 AM
Business Times - 15 Nov 2011
Tiger takes $50m Q2 pounding after grounding
It expects significant net loss for the full year due to high fuel prices, Aussie woes
By VEN SREENIVASAN
(SINGAPORE) Tiger Airways has released a set of dismal second-quarter financial numbers which suggest that profitability may still be a long way off.
The cost of its two-week grounding in Australia was evident as the company unveiled a $49.9 million loss for the July-September quarter, against a $14.1 million net profit last year.
Revenue fell 30.5 per cent to $109.9 million from $143.5 million as both seat sales and ancillary revenue dived.
Seat revenue, at $88.1 million, was 22 per cent down from last year's $113.6 million. Ancillary revenue - a critical component for budget carriers - fell 27 per cent to $21.9 million from $29.9 million previously.
Tiger said that the losses were exacerbated by escalating fuel costs and foreign exchange loss from the weakening of the Australian dollar against the Singapore dollar.
'Tiger Airways Australia incurred an operating loss of $27.2 million for the quarter, primarily as a result of the above-mentioned events,' it said in a statement. 'The current limitation of 22 flight sectors daily represented a significant reduction of flight operations compared to the pre-suspension period.'
Tiger Airways Singapore did not do well either, reporting an operating loss of $12 million for the quarter compared to an operating profit of $6.8 million last year.
'While revenues increased 33.2 per cent on a 63.9 per cent increase in seat capacity, both revenue yield and load factors were lower than last year,' Tiger said. 'Further, costs increased 64 per cent primarily due to the 47 per cent increase in the fuel price and a 57.1 per cent increase in the number of flights operated.'
Fuel cost rose to $57.6 million despite a $1.4 million hedging gain.
For the six months from April to September, Tiger posted a loss of $70.5 million, against a $16 million profit last year.
This was due largely to a 37 per cent rise in fuel bill to $147.2 million for the six months. Revenue held steady at $288.7 million, compared to $288.6 million a year ago.
The results translated into a loss per share of 9.14 cents for the quarter and 12.92 cents for the first half.
Tiger's balance sheet was significantly weakened, with cash balances falling some $131 million to around $64 million. But earlier this month, the company raised some $158.4 million from its rights issue of 273 million shares.
Tiger Airways Australia faces contingent liability of A$2.25 million (S$3 million) due to a potential refund of a grant given by the government of South Australia for the setting up of an aircraft base in the state.
Although the worst may be over in Australia, Tiger expects overall group load factor for the third quarter ending December to be lower than the 88 per cent last year.
'The group expects to record a significant net loss for the financial year, due to the losses generated by Tiger Airways Australia as a result of the CASA suspension, and the group's exposure to high and volatile jet fuel prices,' it said.
Tiger takes $50m Q2 pounding after grounding
It expects significant net loss for the full year due to high fuel prices, Aussie woes
By VEN SREENIVASAN
(SINGAPORE) Tiger Airways has released a set of dismal second-quarter financial numbers which suggest that profitability may still be a long way off.
The cost of its two-week grounding in Australia was evident as the company unveiled a $49.9 million loss for the July-September quarter, against a $14.1 million net profit last year.
Revenue fell 30.5 per cent to $109.9 million from $143.5 million as both seat sales and ancillary revenue dived.
Seat revenue, at $88.1 million, was 22 per cent down from last year's $113.6 million. Ancillary revenue - a critical component for budget carriers - fell 27 per cent to $21.9 million from $29.9 million previously.
Tiger said that the losses were exacerbated by escalating fuel costs and foreign exchange loss from the weakening of the Australian dollar against the Singapore dollar.
'Tiger Airways Australia incurred an operating loss of $27.2 million for the quarter, primarily as a result of the above-mentioned events,' it said in a statement. 'The current limitation of 22 flight sectors daily represented a significant reduction of flight operations compared to the pre-suspension period.'
Tiger Airways Singapore did not do well either, reporting an operating loss of $12 million for the quarter compared to an operating profit of $6.8 million last year.
'While revenues increased 33.2 per cent on a 63.9 per cent increase in seat capacity, both revenue yield and load factors were lower than last year,' Tiger said. 'Further, costs increased 64 per cent primarily due to the 47 per cent increase in the fuel price and a 57.1 per cent increase in the number of flights operated.'
Fuel cost rose to $57.6 million despite a $1.4 million hedging gain.
For the six months from April to September, Tiger posted a loss of $70.5 million, against a $16 million profit last year.
This was due largely to a 37 per cent rise in fuel bill to $147.2 million for the six months. Revenue held steady at $288.7 million, compared to $288.6 million a year ago.
The results translated into a loss per share of 9.14 cents for the quarter and 12.92 cents for the first half.
Tiger's balance sheet was significantly weakened, with cash balances falling some $131 million to around $64 million. But earlier this month, the company raised some $158.4 million from its rights issue of 273 million shares.
Tiger Airways Australia faces contingent liability of A$2.25 million (S$3 million) due to a potential refund of a grant given by the government of South Australia for the setting up of an aircraft base in the state.
Although the worst may be over in Australia, Tiger expects overall group load factor for the third quarter ending December to be lower than the 88 per cent last year.
'The group expects to record a significant net loss for the financial year, due to the losses generated by Tiger Airways Australia as a result of the CASA suspension, and the group's exposure to high and volatile jet fuel prices,' it said.
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