Skywest Airlines Share Discussion Threads

[5pongebob] 21/10/2009 17:07

dai.....thanxx and will keep monitoring

[daicaprice] 21/10/2009 16:12

There you go boys, expect another rise in the morning when all the PI's have read their e-mail tonight. you've probably got til the end of the week to make a few quid. Good luck, I'm waiting for various others to head north otherwise I would have joined you this morning.

[5pongebob] 21/10/2009 13:33

Wozel...nice posting thanxx....on my l2 showing virtually all buys and now paying 10.75...hope overhand clears soon..

[wozelbeak] 21/10/2009 13:17

SHANKSAJ - 21 Oct'09 - 12:18 - 183 of 186

change in fortunes between first 6 months and second was due to the exchange rate.
edit:
"For the sake of clarity, the Company
holds many assets valued in Australian dollars, yet reports in Singapore dollars
and therefore any diminution in the value of the Australian dollar may cause an
exchange loss, albeit such loss may not have been realized. Indeed should the
Australian Dollar increase in value during the second half of this financial
year the unrealized exchange rate losses may be reversed. "

[daicaprice] 21/10/2009 13:09

GE and CR have been commisioned to make the recommendation, but it usually works for those that don't ralise and will probably rise short term.

[atlantic1953] 21/10/2009 13:08

thank you for the feedback

[love it] 21/10/2009 12:19

You can sell at 9.9p on line buy at 10.33p

3 bid 1 offer L2 next offer 11p

[shanksaj] 21/10/2009 12:18

Atlantic

Ireland are unduly pessimistic. This year in first 6 months SKYW made a loss of 2.5mS$, but profit over full year of 5mS$, so a profit in second half of 7.5mS$. Extrapolate that into next year becomes 15mS$. Add on a bit because of stabilized world markets and you can see where S Moore is coming from quite easily.

[5pongebob] 21/10/2009 12:16

Atlantic....so am I but last tip I saw from this source was NTBR which did rise on the back of it....GL with your research

[atlantic1953] 21/10/2009 12:06

I am puzzled by the difference in outlook between W H Ireland and Steven Moore.
I guess i will need to read the detail to see why they are so different.

[5pongebob] 21/10/2009 11:50

21st October 2009
Analyst: Steven Moore
[e-mail]
020 7562 3392

Skywest Airlines*
Full-Year Results Comment – Reiterate 'Buy' at 10.125p; Target Price 32.5p


Key Data


EPIC

SKYW


Share Price

10.125p


Spread

9.5p – 10.75p


Total no of shares

194,500,000


Market Cap

£19.69 million


12 Month Range

2.75p – 10.5p

Market

AIM

Net Cash

£2.57 million

Website

www.advent.com.sg

Sector

Travel & Leisure

Contact

Jeff Chatfield (Executive Chairman)
07783 942 553
On 20th October, SkyWest Airlines, the Australian and South East Asia regional airline announced its results for the year ended 30th June 2009 which show that it remained profitable and suffered just a 1.8% decline in revenue despite economic conditions creating what the company described as "an unprecedented volatile operating environment". With the operating environment having now stabilised somewhat, the company looks to have strong growth prospects which are far from discounted in the current rating and with the shares at 10.125p, we reiterate our stance of 'buy'.
Just found this one by e-mail anyone else seen this..?

[atlantic1953] 21/10/2009 11:19

WH Ireland on Skywest*
1For the year ended 30 June 2009 (FY09), Skywest reported revenue of S$180.9m upon which pre-tax profit of S$5.1m was earned. The comparable figures for FY08 were S$184.2m and S$12.8m respectively. Note that our presentation treats dividends received as financial income rather than revenue. This is a particularly impressive result in the circumstances and it more than reverses the pre-tax loss of S$2.5m incurred in the first half.

· Management had to contend with several adverse factors during the year including worsening economic conditions, a significant drop in the value of the Australian dollar against the US dollar and the impact of escalating fuel prices earlier in the period when oil reached US$140 per barrel. It was mainly currency factors and fuel costs that lay behind the H1 loss. In response, management shifted the strategic focus from pursuit of growth to fiscal conservatism.

· The operating statistics show that passenger numbers on scheduled regional services fell by 9.9% from 387,000 to 349,000. Revenue passenger kilometres declined by 1.5% from 317.9m to 313.2m. This compares with an increase in available seat kilometres of 0.9% from 562.0m to 566.9m, consistent with a decline in load factor from 56.6% to 55.3%. The star of the show was charter services with Skywest operating 2,614 charter flights in FY09 compared to 1,566 in FY08. For the year under review, charter revenues climbed to over 50% of group income.

· For the year as a whole, gross margin increased from 52.1% to 55.7% but operating margin was held back primarily by the increased rental cost of aircraft. Before rental costs on leased aircraft and depreciation costs (mainly relating to owned aircraft), the EBITDAR margin fell from 20.4% to 20.1%. Rental costs rose from S$15.0m to S$20.0m (8.1% of sales to 11.0%) with three more aircraft being operated. After these costs, the operating margin fell from 6.7% to 2.9%. Included within operating expenses, cross hire costs were higher than they might have been because fleet growth was held back in response to the economic climate. Thus the airline has not always deployed as many aircraft as it was potentially able.

· In the event, operating profit fell by 57.8% from S$12.3m to S$5.2m. With lower average cash balances during the year, a small net interest charge was incurred (compared to interest receivable in FY08) with the result that group pre-tax profit fell by 59.7% from £12.8m to £5.1m.

· Weighted shares in issue was slightly lower as a result of buying back 4 million shares for cancellation and 1 million for Treasury. But the effective tax rate rose from 27.9% to 38.2%. In consequence, basic EPS declined by 65.3% from S¢4.61 to S¢1.60. Fully diluted EPS fell by 64.3% from S¢4.34 to S¢1.55. A final dividend of S¢1.0 is proposed.

· Looking beyond the current economic and financial crisis – and it is worth recording that Australia has been much less affected than other developed economies – management sees huge growth potential for Western Australia. This is particularly true in light of recent announcements of massive resource development such as the A$50bn Gorgon Gas Project where Skywest expects to benefit from a significant increase in capacity. Gorgon is set to produce a significant infrastructure and employment spin-off for WA over the next three decades and will be Australia's largest ever resources development. Skywest already flies the bulk of employees to the region under its existing 'fly-in fly-out' charter contracts on behalf of various mining customers and is also the primary provider of air travel to the North West Shelf's major service hubs such as Karratha and Exmouth.

· Scheduled 'fly-in fly-out' contracts provide strong baseline recurring revenues. Skywest is well placed to capture more such business in WA and is tendering for various other charter contracts. The airline has acquired another Fokker 100 jet, which is slated for operating additional charter services. Initially, the aircraft has been purchased outright costing US$5m cash including refurbishment costs and securing regulatory approval. Once commissioned, it is likely that a sale and leaseback deal will be signed. The aircraft will lower Skywest's costs for the cross hire of aircraft from other airlines and increase the fleet to 16 aircraft.

· Skywest also continues to provide conventional airline services to all of the major airports in Western Australia and beyond. This regular airline business for the general flying public continues to grow within a relatively stable environment. The scheduled route network continues to expand. During the period, the Government extended the Airline's exclusive licence for the Coastal Network of Western Australia.

· Looking to the immediate future, we believe a year of consolidation is in prospect, as global economic conditions begin to ease, before reasonable growth returns in FY11. For its part, management too anticipates "a slow down in the rate of growth due to the global crisis of confidence in the broader economy associated with the credit institutions". Rapid changes in exchange rates and fuel costs still represent a significant risk to the business but recent trends have been benign with the strengthening of the Australian currency and lowering of oil prices. Moreover, agreement has been reached with the workforce providing labour cost certainty to the group for 1 year in the case of pilots and 3 years for engineers.

· Based on 10x estimated earnings for FY11, we maintain a target price of S¢27 (currently circa 12p) giving upside potential of about 20% in the share price.

Y/E June
2008A
2009A
2010E
2011E

Sales(S$m)
184.1
180.9
185
200

PTP (S$m)
12.8
5.1
5.8
8.6

EPS (S¢)
4.6
1.6
1.8
2.7

P/E (x)
4.9
14.3
12.4
8.4

DPS (S¢)
2.5
1
1
1.5

Div. Yld(%)
11
4.4
4.4
6.6

[shanksaj] 21/10/2009 11:14

Taurus

WH Ireland forecast for 2010 is 1.8 Singcents (1p) EPS. For charter flights I believe fuel costs are passed on directly to the customers. They acknowledge though that fuel costs and exchange rate fluctuations in the A$ are significant risk factors.

I think the EPS is unduly pessimistic, on the view that the A$ will go in SKYW's favour this year.

Ireland have a target price of 12p. SKYW was my second biggest holding so have sold half this am because the risk/benefit was not compelling.. but its still far better than putting cash in the bank.

[liarspoker] 21/10/2009 10:46

I am sure that they are TaurusThebear.

Don't you know that analysts are always right ? ;O)

[taurusthebear] 21/10/2009 10:40

Are 2010 forecasts taking into account the ever-increasing cost of fuel? :0)

[atlantic1953] 21/10/2009 10:22

Wh Ireland have a target price of 12 p , unfortunately i can't access this report right now.

[investinggarden] 21/10/2009 10:07

Skywest rallies

[liarspoker] 20/10/2009 21:45

Just checked the trades and saw the second 500K which I was expecting. Nice of the MMs to make a quick GBP 1,250 on an exchange.

[stegrego] 20/10/2009 21:29

Ah ok - bit of derr moment there.

Will be in for a few in the morning i think..

[liarspoker] 20/10/2009 21:15

2010 forecast is 4.8p so on 10.5p offer the P/E is 2.1875. :O)

Perhaps the analysts have taken Gorgon into account already.

I'm not sure we'll see 4.8p though but even if we see 2.4p these shares are way too cheap.

Edit: Even 1.05p puts them on a PEG of around .18 and a multiple of 10. No need to tell you what happens when you see shares with those figures ( HLO and IDS immediately come to mind ). :O)

[stegrego] 20/10/2009 21:11

Liarspoker - 20 Oct'09 - 10:04 - 41839 of 42059


Did you all read the SKYW results this Am ?

P/E of 2.2, final divi of just under 4%, fleet expansion, Australia's gas industry booming and Australia was the first to raise interest rates so things must be improving there, good balance sheet etc.

Wakey, wakey. :O)


--------------------------------------------------------------

Just read this on CR thread - where you get p/e of 2.2 from??
More like 15 isnt it?

[liarspoker] 20/10/2009 20:43

Plenty of potential resource projects ( around exmouth where SKYW fly to ) on the horizon where air transport is needed for staff ( marked in red - blue signifies existing projects ):




I'll link the page where I got the map from. Might be interesting to some:



And from the same site we get this:

On 14 September 2009 the Gorgon Joint Venture (GJV: Chevron, ExxonMobil and Shell) made a final investment decision on its $43 billion gas processing project on Barrow Island, the Gorgon Project. Following this decision, the Premier of Western Australia, Colin Barnett, granted the final development approvals required for the project under the Barrow Island Act 2003 and its Schedule 1 (the Gorgon Gas Processing and Infrastructure Project Agreement 2003). This included the approval of the joint venturers' proposed carbon dioxide (CO2) injection project (geosequestration project) on Barrow Island.

The Gorgon Project is the single largest investment of its kind in the world, and will be an enormous boost for both the West Australian and Australian economies.

The GJV is expected to commence preliminary construction by the end of 2009 and major construction early in 2010.

And from Wiki:



The gas fields, 200 km from the coast are said to contain 40 trillion cubic feet of natural gas and may have a lifespan of 60 years.[11]

The gas is worth A$500 billion at current market prices [1] and the market price will keep increasing over the next few years.

[liarspoker] 20/10/2009 20:20

A few Gorgon length and cost details:



US energy giant Chevron has announced a natural gas discovery off Western Australia that will help the firm develop its Gorgon gas project.



Policy makers also discussed the outlook for the nation's mining sector, and the impact of this month's decision by Chevron Corp. to build its Gorgon A$43 billion liquefied natural gas project in Western Australia.


So we have a $43bn project which should start production in 2014. That's certainly good news for SKYW. :O)

[liarspoker] 20/10/2009 19:58

Hmmm indeed Steg - wish I'd seen this below 5p !

Gorgon seems to be only one of the projects according to todays results:

' particularly in light of recent announcements of massive resource development such as the Gorgon Project.'

No doubt the biggest though.

Anyhow let's not get too fussy. I'm always happy when I can buy a good stock back cheaper than I originally bought it for after taking profit. :O)

[stegrego] 20/10/2009 19:44

Been monitoring this for ages.

Main plus seems to be the huge Gorgon project that is going to last for years and costs billions.

Why ive waited till now to probably buy in im not sure as its been screaming cheap for months.

Hmmm