We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Chorus Aviation Inc | TSX:CHR | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.01 | 0.45% | 2.21 | 2.18 | 2.23 | 2.23 | 2.16 | 2.17 | 210,229 | 21:31:09 |
Q1 2023 Financial Highlights
HALIFAX, NS, May 8, 2023 /CNW/ - Chorus Aviation Inc. ('Chorus') (TSX: CHR) today announced first quarter 2023 financial results.
"I am pleased to report strong first quarter results in-line with expectations, with Free Cash Flow of $73.1 million and Adjusted earnings available to Common Shareholders of $0.11 per Common Share representing increases of 51% and 10%, respectively. During the quarter, we continued the deleveraging of our balance sheet improving our Leverage Ratio to 4.0x, a 9% decrease since year end, bringing us closer to our targeted range of 2.5x to 3.5x." said Colin Copp, President and Chief Executive Officer, Chorus.
Mr. Copp continued "We are laser-focused on transitioning our aircraft leasing business to an asset-light model and launching Falko's new investment fund. With our strong core services cash flow and the anticipated proceeds from asset sales, we are progressing towards our targeted leverage level, which will offer considerable flexibility to execute on accretive capital allocation opportunities."
"Last month, we officially launched Cygnet Aviation Academy introducing a first of its kind pilot academy to the Canadian market, with leading edge flight training that provides students direct access to career opportunities. We are proud of this initiative which will provide flight ready pilots to our operating companies and the wider industry." concluded Mr. Copp.
First Quarter Summary
In the first quarter of 2023, Chorus reported Adjusted EBITDA of $118.1 million, an increase of $34.8 million over the first quarter of 2022.
The RAL segment's Adjusted EBITDA was $61.6 million, a quarter-over-quarter increase of $29.9 million primarily due to Falko's earnings inclusive of $6.7 million due to the recognition of non-reimbursable end-of-lease maintenance reserves.
The RAS segment's Adjusted EBITDA was $63.9 million, an increase of $6.5 million over the first quarter of 2022. First quarter results were impacted by:
Corporate Adjusted EBITDA or net expenses of $7.4 million were higher than the first quarter of 2022 by $1.6 million due to:
Adjusted net income was $30.8 million for the quarter, an increase of $13.1 million over the first quarter of 2022 due to:
Net income increased $9.1 million over the first quarter of 2022 primarily due to:
Consolidated Financial Analysis
This section provides detailed information and analysis about Chorus' performance for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. It focuses on Chorus' consolidated operating results and provides financial information for Chorus' operating segments.
(unaudited) (expressed in thousands of Canadian dollars) | Three months ended March 31, | |||
2023 | 2022 | Change | Change | |
$ | $ | $ | % | |
Operating revenue | 415,252 | 342,380 | 72,872 | 21.3 |
Operating expenses | 353,349 | 299,068 | 54,281 | 18.2 |
Operating income | 61,903 | 43,312 | 18,591 | 42.9 |
Net interest expense | (25,458) | (20,054) | (5,404) | 26.9 |
Foreign exchange gain | 4,031 | 4,449 | (418) | (9.4) |
Gain on fair value of investments | 1,892 | — | 1,892 | 100.0 |
Income before income tax | 42,368 | 27,707 | 14,661 | 52.9 |
Income tax expense | (10,349) | (4,800) | (5,549) | 115.6 |
Net income | 32,019 | 22,907 | 9,112 | 39.8 |
Net income attributable to non-controlling interest | 490 | — | 490 | 100.0 |
Net income attributable to Shareholders | 31,529 | 22,907 | 8,622 | 37.6 |
Preferred share dividends declared | (8,871) | — | (8,871) | (100.0) |
Earnings attributable to Common Shareholders | 22,658 | 22,907 | (249) | (1.1) |
Adjusted EBITDA(1) | 118,056 | 83,280 | 34,776 | 41.8 |
Adjusted EBT(1) | 41,789 | 23,346 | 18,443 | 79.0 |
Adjusted net income(1) | 30,824 | 17,743 | 13,081 | 73.7 |
(1) These are non-GAAP financial measures. |
Outlook
(See cautionary statement regarding forward-looking information below)
Chorus has the key elements to successfully execute on its strategy to transition to an asset light leasing model while growing its contractual fund management business and its RAS segment. The key elements include:
The asset light leasing model will enable Chorus to achieve greater scale in its leasing business by co-investing alongside third-party equity investors in Falko-managed funds, while decreasing risk to Chorus by reducing the use of recourse debt financing. As Chorus transitions to an asset light leasing model, asset sales will generate Free Cash Flow that can be deployed to pursue accretive investment opportunities and/or return capital to Common Shareholders. As part of this asset light transformation, Chorus is targeting:
Chorus' forecast for the year ending December 31, 2023 is as follows:
(unaudited) | Consolidated | |
(expressed in thousands of Canadian dollars) | To | |
$ | $ | |
Revenue(1)(2) | 1,500,000 | 1,700,000 |
Adjusted EBITDA(1)(3) | 410,000 | 450,000 |
Adjusted EBT(1)(3) | 135,000 | 165,000 |
Net debt to Adjusted EBITDA(1)(3) | 3.6x | 4.0x |
Free Cash Flow(3) | 260,000 | 330,000 |
(1) | RAL's forecast for the year ending December 31, 2023 is as follows: Revenue is expected to be between $240.0 million and $260.0 million, Adjusted EBITDA is expected to be between $210.0 million and $235.0 million and Adjusted EBT is expected to be between $70.0 million and $85.0 million. |
(2) | Controllable Costs and Pass-Through Costs are expected to be between $0.95 billion and $1.1 billion included in both revenue and expenses. |
(3) | These are non-GAAP financial measures. |
2023 Key Economic Assumptions:
RAL's gross lease receivable may decrease from the March 31, 2023 balance of US $109.9 million to between US $95.0 million and US $100.0 million by the end of 2023 due to rent relief arrangements1 and repayment expectations.
RAL's lease deferral receivable exposure is partially mitigated by security packages held of approximately US $18.2 million (December 31, 2022 - US $17.1 million).
1 | Following the onset of the COVID-19 pandemic, RAL received requests from many of its customers for some form of temporary rent relief, as they coped with an unprecedented reduction in demand for passenger air travel. Under rent relief arrangements, certain of which include lease term extensions, the repayment of the deferred amounts typically coincides with the lease term extensions. |
Capital Expenditures
Capital expenditures in 2023, are expected as follows:
(unaudited) (expressed in thousands of Canadian dollars) | Actual | ||||
Three months ended | Year ended | ||||
Planned 2023(1) | March 31, 2023 | December 31, 2022 | |||
$ | $ | $ | |||
Capital expenditures, excluding aircraft acquisitions | 26,000 | to | 32,000 | 3,161 | 15,914 |
Capitalized major maintenance overhauls(2) | 5,000 | to | 10,000 | 3,599 | 15,974 |
Aircraft acquisitions and improvements | 5,000 | to | 8,000 | 2,142 | 30,392 |
36,000 | to | 50,000 | 8,902 | 62,280 |
(1) | The 2023 plan includes reconfiguration costs on aircraft and certain aircraft improvements which have been converted to Canadian from US dollars using a foreign exchange rate of 1.3533, the March 31, 2023 closing day rate from the Bank of Canada. |
(2) | The 2023 plan includes between $3.0 million to $5.0 million of costs that are expected to be included in Controllable Costs. Actual 2023 and 2022 costs include $1.9 million and $10.1 million, respectively, which were included in Controllable Costs. |
Use of Defined Terms
Capitalized terms used but not defined in this news release have the meanings given to them in the MD&A which is available on Chorus' website (www.chorusaviation.com) and under Chorus' profile on SEDAR (www.sedar.com).
Investor Conference Call / Audio Webcast
Chorus will hold an analyst call at 9:00 ET on May 9, to discuss the first quarter 2023 financial results. The call may be accessed by dialing 1-888-664-6392. The call will be simultaneously audio webcast via: https://app.webinar.net/X8lG36gLaVD.
This is a listen-in only audio webcast.
The conference call webcast will be archived on Chorus' website at www.chorusaviation.com under Investors > Reports > Executive Management Presentations. A playback of the call can also be accessed until midnight ET, May 16, by dialing toll-free1-888-390-0541 and using passcode 050978#.
1NON-GAAP FINANCIAL MEASURES
This news release references several non-GAAP financial measures to supplement the analysis of Chorus' results. Chorus uses certain non-GAAP financial measures, described below, to evaluate and assess performance. These non-GAAP measures are generally numerical measures of a company's financial performance, financial position, or cash flows, that include or exclude amounts from the most comparable GAAP measure. As such, these measures are not recognized for financial statement presentation under GAAP, do not have a standardized meaning, and are therefore not likely to be comparable to similar measures presented by other public entities.
Adjusted Net Income, Adjusted EBT and Adjusted EBITDA
Adjusted net income is used by Chorus to assess performance without the effects of unrealized foreign exchange gains or losses on long-term debt and lease liability related to aircraft, signing bonuses, employee separation program costs, impairment provisions, lease repossession costs net of security packages realized, restructuring expected credit loss provision, Dash 8-300 inventory provision, defined benefit pension curtailment, integration costs, strategic advisory fees and the applicable tax expense (recovery). Chorus manages its exposure to currency risk on such long-term debt by billing the lease payments within the CPA in the underlying currency (US dollars) related to the aircraft debt. These items are excluded because they affect the comparability of Chorus' financial results, period-over-period, and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring due to ongoing currency fluctuations between the Canadian and US dollar.
Adjusted earnings available to Common Shareholders per Common Share is used by Chorus to assess performance and is calculated as Adjusted Net Income less non-controlling interest and Preferred Share dividends declared.
Adjusted EBT and EBITDA should not be used as exclusive measures of cash flow because these measures do not account for the impact of working capital growth, capital expenditures, debt repayments and other sources and uses of cash, which are disclosed in the statements of cash flows, forming part of Chorus' financial statements.
EBT is defined as earnings before income tax. Adjusted EBT (EBT before signing bonuses, employee separation program costs, impairment provisions, lease repossession costs net of security packages realized, restructuring expected credit loss provision, Dash 8-300 inventory provision, defined benefit pension curtailment, integration costs, strategic advisory fees and other items such as foreign exchange gains and losses) is a non-GAAP financial measure used by Chorus as a supplemental financial measure of operational performance. Management believes Adjusted EBT assists investors in comparing Chorus' performance by excluding items, which it does not believe will re-occur over the longer-term (such as signing bonuses, employee separation program costs, impairment provisions, lease repossession costs net of security packages realized, restructuring expected credit loss provision, Dash 8-300 inventory provision, defined benefit pension curtailment, integration costs and strategic advisory fees) as well as items that are non-cash in nature such as foreign exchange gains and losses.
EBITDA is defined as earnings before net interest expense, income taxes, depreciation and amortization and impairment and is a non-GAAP financial measure that is used frequently by companies in the aviation industry as a measure of performance. Adjusted EBITDA (EBITDA before signing bonuses, employee separation program costs, strategic advisory fees, impairment provisions, lease repossession costs net of security packages realized, restructuring expected credit loss provision, Dash 8-300 inventory provision, defined benefit pension curtailment and integration costs, and other items such as foreign exchange gains or losses) is a non-GAAP financial measure used by Chorus as a supplemental financial measure of operational performance. Management believes Adjusted EBITDA assists investors in comparing Chorus' performance by excluding items, which it does not believe will re-occur over the longer-term (such as signing bonuses, employee separation program costs, impairment provisions, lease repossession costs net of security packages realized, restructuring expected credit loss provision, Dash 8-300 inventory provision, defined benefit pension curtailment, integration costs and strategic advisory fees) as well as items that are non-cash in nature such as foreign exchange gains and losses. Adjusted EBITDA should not be used as an exclusive measure of cash flow because it does not account for the impact of working capital growth, capital expenditures, debt repayments and other sources and uses of cash, which are disclosed in the statements of cash flows, forming part of Chorus' financial statements.
Leverage Ratio
Leverage Ratio is used by Chorus as a means to measure financial leverage. Leverage Ratio is calculated by dividing Net debt by trailing 12-month Adjusted EBITDA. Leverage Ratio is not a recognized measure under GAAP, and therefore is unlikely to be comparable to similar measures presented by other companies. Management believes leverage to be a useful term when monitoring and managing debt levels. In addition, as leverage is a measure frequently analyzed for public companies, Chorus has calculated the amount to assist readers in this review. Leverage should not be construed as a measure of cash flows.
Free Cash Flow
Free Cash Flow is defined as cash provided by operating activities less net changes in non-cash balances related to operations, capital expenditures excluding aircraft acquisitions and improvements plus net proceeds on asset sales (proceeds on disposal of property and equipment less the related debt repayments for the assets sold).
Forward-Looking Information
This news release includes forward-looking information and statements. Forward-looking information and statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "potential", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such information and statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking information and statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and other uncertain events. Forward-looking information and statements, by their nature, are based on assumptions, including those referenced below, and are subject to important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due to, among other things, external events, changing market conditions and general uncertainties of the business. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from those indicated in the forward-looking information and statements.
Examples of forward-looking information and statements in this news release include the discussion in the Outlook section, as well as statements regarding expectations as to Chorus' future liquidity and financial strength and contracted revenues, the recovery of air traffic in Canada and around the world, Chorus' future growth and competitive position, Chorus' ability to grow Falko's asset management business and realize the benefit of synergies among its subsidiaries, Chorus' intention to transition its leasing business to an asset light leasing model, the ability to generate cash flows from asset sales and deploy those to enhance returns to Shareholders and/or invest in accretive growth opportunities, and the completion of pending or planned transactions (including the successful close of a new Falko-managed fund). Actual results may differ materially from results indicated in forward-looking information for a number of reasons, including Chorus' ability to successfully integrate Falko's operations and employees and realize the anticipated benefits of the Falko acquisition including the transition to an asset light model; the potential impact of the completion of the Falko acquisition on relationships, including with employees, suppliers, customers, investors and other providers of capital; Falko's ability to successfully launch a new fund on the terms currently contemplated or at all; deviations from the key economic assumptions described in the Outlook section; the emergence of new COVID-19 variants and/or new pandemic or endemic diseases and any restrictive measures that may be implemented to minimize their public health impacts; the continuing impact of COVID-19 on Chorus' contractual counterparties; changes in aviation industry and general economic conditions, including inflation; the continued payment (in whole or in part) of amounts due under the CPA and/or under aircraft lease agreements with Chorus' customers; the risk of disputes under the CPA and/or under aircraft lease agreements; Chorus' ability to pay its indebtedness and otherwise remain in compliance with its debt covenants; the risk of cross defaults under debt agreements and other significant contracts; the risk of asset impairments and provisions for expected credit losses; a failure to conclude transactions (including potential financings) referenced in this news release and in Chorus' public disclosure record available at www.sedar.com. The forward-looking statements contained in this news release represent Chorus' expectations as of the date of this news release (or as of the date they are otherwise stated to be made) and are subject to change after such date. Chorus disclaims any intention or obligation to update or revise such statements to reflect new information, subsequent events or otherwise, except as required by applicable securities laws. Readers are cautioned that the foregoing factors and risks are not exhaustive.
About Chorus Aviation Inc.
Chorus is a leading, global aviation solutions provider and asset manager, focused on regional aviation. Our principal subsidiaries are: Falko Regional Aircraft, the leading pure play regional aircraft asset manager and lessor, managing investments on behalf of third-party fund investors; Jazz Aviation, the largest regional operator in Canada and the sole provider of regional air services under the Air Canada Express brand; Voyageur Aviation, a leading provider of specialty charter, aircraft modifications, parts provisioning and in-service support services; and Cygnet Aviation Academy, an industry leading accredited training academy preparing pilots for direct entry into airlines. Together, Chorus' subsidiaries provide services that encompass every stage of a regional aircraft's lifecycle, including: aircraft acquisition and leasing; aircraft refurbishment, engineering, modification, repurposing and transition; contract flying; aircraft and component maintenance, disassembly, and parts provisioning; and pilot training.
Chorus Class A Variable Voting Shares and Class B Voting Shares trade on the Toronto Stock Exchange under the trading symbol 'CHR'. Chorus 5.75% Senior Unsecured Debentures due December 31, 2024, 6.00% Convertible Senior Unsecured Debentures due June 30, 2026, and 5.75% Senior Unsecured Debentures due June 30, 2027 trade on the Toronto Stock Exchange under the trading symbols 'CHR.DB.A', 'CHR.DB.B', and 'CHR.DB.C' respectively. www.chorusaviation.com.
SOURCE Chorus Aviation Inc.
Copyright 2023 Canada NewsWire
1 Year Chorus Aviation Chart |
1 Month Chorus Aviation Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions