Cargojet Q2 net income drops 81%

For the first six months of 2023, revenue dropped 8% to C$442 million and net income was down 41% to C$62 million

Cargojet Q2 net income drops 81%
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Cargojet reported a 15 percent decline in revenue at C$210 million ($155 million) for the second quarter of 2023 compared to C$247 million ($183 million) in Q2022 on lower domestic network revenue and drop in fuel surcharge.

"Adjusted EBITDA for the quarter was C$74.3 million compared to the second quarter 2022 adjusted EBITDA of C$81.1 million. Adjusted free cash flow was C$52.3 million for the three-month period ended June 30, 2023 compared to C$41.2 million for the same period in 2022," says an official release.

Net income for the quarter dropped 81 percent to C$31 million ($23 million) compared to net income of C$161 million ($119 million) in Q22022.

“To prepare Cargojet to ride the current economic cycle, we shifted our focus to cost management as well as right sizing our network while curtailing growth capex and focusing on generating free cash flow," says Ajay Virmani, President and CEO, Cargojet. "Our EBITDA margin of 35.4 percent in this quarter vs. 32.9 percent prior year clearly demonstrates that our cost management initiatives are yielding the desired results.

“While we expect economic conditions to remain difficult, the shift in consumer spending towards travel and leisure vs goods is expected to normalise towards the end of this year. The Cargojet team continues to be industry leaders providing a 99.6 percent on-time performance in the quarter. Our focus remains on delivering exceptional reliability and customer service."

For the first six months of 2023, revenue dropped eight percent to C$442 million ($327 million) and net income was down 41 percent to C$62 million ($46 million).

Sale of Boeing 777-300 aircraft
Cargojet sold one Boeing 777-300 aircraft for C$36 million resulting in a net loss on sale of C$1.9 million (loss on sale of C$3.2 million, partially offset by a realised foreign exchange gain of C$1.3 million) during H12023, the release added. "The company has signed an agreement for the sale of one Boeing 777-300 aircraft and is in the process of signing another letter Of intent for the sale of an additional Boeing 777-300 aircraft. The company also intends to sell two Beechcraft aircraft that were purchased for crew transportation, and accordingly an amount of C$81.3 million representing the carrying value of these four aircraft have been classified as assets held for sale as current assets. Due to the recent slowdown in the global economy, the company plans to defer the induction of these aircraft and maintain its financial strength. The company expects to complete the sale in 2023."

Cargojet operates a fleet of 37 aircraft (including 15 owned B767-300F and 15 owned B757-200F).

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