Wrap Text
Unaudited Condensed Consolidated Interim Results for the Six Months Ended 31 December 2016 and Cash Dividend Declara
Comair Limited
Incorporated in the Republic of South Africa
Registration number: 1967/006783/06
Share code: COM
ISIN: ZAE000029823
(“Comair” or “the Company” or “the Group”)
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS
ENDED 31 DECEMBER 2016 AND CASH DIVIDEND DECLARATION
PERFORMANCE REVIEW
The first half of the 2017 financial year represented a return to Comair’s
historic profit growth trend in the absence of the extraordinary costs of the
comparative period that arose from losses on oil hedges and the revaluation of
the dollar-based aircraft loan.
Revenue growth for the domestic aviation industry is reliant on a strong
economy and GDP growth, and we continue to see surplus capacity in the market,
resulting in occupancy levels that remain low by international standards. The
cycle of very low yields which drove volume growth, as seen in the comparative
first half, partly reversed in the six months under review, but at the expense
of passenger numbers. Comair consequently saw revenue growth of 6% as a result
of a recovery in yields, but without any increase in volumes.
Costs remained flat, with local inflationary pressure being offset by the
improved exchange rate applicable to foreign currency-based expenses. During
the period Comair took delivery of one new Boeing 737-800 aircraft and one
leased Boeing 737-800 aircraft to replaced Boeing 737-400 aircraft in the
British Airways fleet, for retirement as part of Comair's fleet replacement
programme. This contributed to further operating efficiency and enhancement of
the customer experience.
The R91 million translation loss for the comparative period, which arose from
the effect of the exchange rate on a dollar-based aircraft loan, was partly
reversed as the currency made some headway to R13.73 as at 31 December 2016
from the low of R15.47 a year earlier. This resulted in a gain of R25 million
in the period under review on the loan value of US$23 million, compared to a
loss of R74 million on the last revaluation of the loan at 30 June 2016. The
oil price remained relatively stable over the past 12 months and the oil hedges
that gave rise to a loss of R71 million in the comparative period all matured
by 31 December 2015, with no subsequent hedges being entered into.
Consequently, profit after taxation for the period was R199 million (prior
period R84 million), and earnings per share and headline earning per share were
42.8 cents (prior period earnings per share of 18.0 cents and headline earnings
per share of 13.1 cents). Growth in the contribution from Comair’s non-airline
segment was strong.
Cash generated from operations remained healthy at R448 million, resulting in
cash on hand of R949 million at 31 December 2016 (R972 million in the
comparative period). The company will be making pre-delivery payments of
US$9.7 million during the remainder of the financial year towards its first
deliveries of Boeing 737-8 Max aircraft in 2019.
PROSPECTS
The current weak economy is expected to maintain pressure on consumer spending,
and we therefore foresee continued pressure on margins in the industry. Comair
is, however, well placed to operate in these conditions, with strong brands,
committed staff, effective equipment, an efficient cost base and strong cash
reserves.
We anticipate that the exchange rate will remain volatile and that the price of
oil is on an upward trend. The ongoing upgrades to our fleet provide mitigation
to the expected increase in the fuel price, while also providing an improved
customer experience. The new fleet, along with improved technology-driven
operating processes, will ensure that we maintain a healthy competitive
advantage for the benefit of our customers.
Our travel business, flight training facility, catering business and airport
lounges are opportunities for further growth.
The above outlook has not been reviewed and reported on by Comair’s external
auditors and does not constitute an earnings forecast.
CASH DIVIDEND DECLARATION
Following on the strong cash earnings for 1 July 2016 to 31 December 2016,
notice is hereby given that a gross interim cash dividend of 7.00000 cents per
share (prior period gross interim cash dividend of 5 cents) payable to ordinary
shareholders was approved and declared by the board of directors for the six
month period ended 31 December 2016. The dividend was declared out of income
reserves.
Dividends will be subject to a local dividend tax rate of 15% or 1.05000 cents
per share, resulting in a net dividend of 5.95000 cents per share, unless the
shareholder is exempt from paying dividend tax or is entitled to a reduced rate
in terms of the applicable double tax agreement. The Company’s tax reference
number is 9281/874/7/1/0 and the number of shares in issue at the date of this
declaration is 469,330,865 ordinary shares.
In accordance with the provisions of Strate, the electronic settlement and
custody system used by the JSE Limited, the relevant dates for the dividend are
as follows:
Event Date
Last day to trade (cum dividend) Monday, 20 March 2017
Shares commence trading (ex dividend) Wednesday, 22 March 2017
Record date (date shareholders recorded in books) Friday, 24 March 2017
Payment date Monday, 27 March 2017
Share certificates may not be dematerialised or re-materialised between
Wednesday 22, March 2017 and Friday, 24 March 2017, both days inclusive.
Director' appointments and resignations
Ms Wrenelle Stander resigned as an independent non-executive director (and her
associated positions on the Audit Committee, Risk Management Committee,
Remuneration Committee and Social and Ethics Committee), on the 28th of
November 2016.
Comair Limited
Unaudited Condensed Consolidated Interim Results
Group
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Dec 31 Dec 30 June
2016 2015 2016
R'000 R'000 R'000
---------------------------------------
Condensed Consolidated Statements of
Profit or Loss
Revenue 3,128,842 2,960,721 5,959,573
Operating expenses (2,583,879) (2,571,386) (5,129,781)
---------------------------------------
Operating profit* 544,963 389,335 829,792
Depreciation and amortisation (206,986) (173,060) (372,103)
Write-off of damaged aircraft
beyond economical repair - (64,462) (64,462)
Compensation for write-off of damaged
aircraft beyond economical repair - 84,124 84,155
Unrealised translation gain (loss)
on dollar denominated loan 25,492 (91,244) (73,946)
Profit on sale of assets - 12,450 12,419
---------------------------------------
Profit from operations 363,469 157,143 415,855
Interest income 25,920 19,884 41,440
Interest expense (116,021) (64,847) (170,496)
Income from equity accounted associates 4,919 5,749 8,011
---------------------------------------
Profit before taxation 278,287 117,929 294,810
Taxation (79,281) (34,196) (102,108)
---------------------------------------
Profit for the period 199,006 83,733 192,702
Profit for the period attributable to:-
Owners of the parent 198,539 83,733 192,555
Non-controlling interest 467 - 147
---------------------------------------
199,006 83,733 192,702
* Operating profit before depreciation, amortisation, write-off of damaged
aircraft, unrealised gain (loss) on translation of dollar denominated
aircraft loan, compensation for write-off of damaged aircraft and profit on
sale of assets.
Group
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Dec 31 Dec 30 June
2016 2015 2016
R'000 R'000 R'000
---------------------------------------
Condensed Consolidated Statements of
Comprehensive Income
Profit for the period 199,006 83,733 192,702
Other comprehensive income: Items that
may be reclassified subsequently to
profit or loss
Effects of cash flow hedge recognised
in other comprehensive income - 40,387 40,387
---------------------------------------
Total comprehensive income for
the period 199,006 124,120 233,089
---------------------------------------
Total comprehensive income for the
period attributable to:-
Owners of the parent 198,539 124,120 232,942
Non-controlling interest 467 - 147
---------------------------------------
199,006 124,120 233,089
Earnings per share (cents) 42.8 18.0 41.5
Headline earnings per share (cents) 42.8 13.1 36.5
Diluted earnings per share (cents) 42.7 18.0 41.4
Diluted headline earnings per
share (cents) 42.7 13.1 36.5
Dividends per share paid (cents) 11.0 10.0 15.0
Actual number of shares in issue ('000) 469,331 469,331 469,331
Weighted ordinary shares in issue ('000) 464,347 464,337 464,347
Diluted weighted ordinary shares in
issue ('000) 464,803 464,337 464,716
Reconciliation between earnings
and headline earnings
Earnings attributable to ordinary
shareholders 198,539 83,733 192,555
Less: IAS 16 profit on disposal of
property, plant and equipment - (12,450) (12,419)
Add: taxation effect of profit
on disposal - 3,485 3,477
Add: IAS 36 impairment due to
write-off of damaged aircraft
beyond economical repair - 64,462 64,462
Less: taxation effect of IAS 36
impairment due to write-off of
damaged aircraft beyond economical
repair - (18,049) (18,049)
Less: IAS 16 compensation for
write-off of damaged aircraft
beyond economical repair - (84,124) (84,155)
Add: taxation effect of IAS 16
compensation for write-off of
damaged aircraft beyond economical
repair - 23,555 23,563
---------------------------------------
Headline earnings attributable to
ordinary shareholders 198,539 60,612 169,434
---------------------------------------
Group
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Dec 31 Dec 30 June
2016 2015 2016
R'000 R'000 R'000
---------------------------------------
Condensed Consolidated Statements of
Financial Position
ASSETS
Property, plant and equipment 4,504,287 3,557,404 3,988,323
Intangible assets 19,517 23,962 21,953
Investments in associates 41,341 34,160 36,422
Goodwill 6,615 3,668 6,615
Deferred tax 3,942 4,940 3,942
Current assets 1,559,385 1,483,070 1,553,163
---------------------------------------
6,135,087 5,107,204 5,610,418
---------------------------------------
EQUITY AND LIABILITIES
Share capital and reserves 1,477,361 1,243,801 1,329,515
Interest-bearing liabilities 2,501,440 1,648,837 2,182,459
Deferred taxation 383,129 249,023 303,848
Share-based payments 1,001 - 1,001
Current liabilities 1,772,156 1,965,543 1,793,595
---------------------------------------
6,135,087 5,107,204 5,610,418
---------------------------------------
Net asset value per share (cents) 317.9 267.9 286.6
Condensed Group Statements of
Cash Flows
Cash and cash equivalents at
the beginning of the period 1,120,128 849,278 849,278
Cash from operations and
investment income 357,731 298,173 762,281
Tax paid (2,193) (1,400) (6,020)
Cash (utilised) in investing
activities (236,123) (72,207) (94,496)
Cash (utilised) generated in
financing activities (290,068) (102,198) (390,915)
---------------------------------------
Cash and cash equivalents at
the end of the period 949,475 971,646 1,120,128
---------------------------------------
Condensed Consolidated Statements
of Cash Flows
Cash generated from operating activities
Cash generated from operations 447,832 343,136 892,231
Interest paid (116,021) (64,847) (170,496)
Interest received 25,920 19,884 40,546
Taxation paid (2,193) (1,400) (6,020)
---------------------------------------
Net cash from operating activities 355,538 296,773 756,261
---------------------------------------
Cash utilised in investing activities
Additions to property, plant and
equipment (238,217) (84,657) (182,257)
Proceeds on disposal of property,
plant and equipment - 12,450 100,935
Additions to intangible assets (5,758) - (13,174)
Decrease in loan to associate 7,852 - -
---------------------------------------
Net cash from investing activities (236,123) (72,207) (94,496)
---------------------------------------
Cash utilised in financing activities
Raising of interest-bearing liabilities - 74,858 34,790
Repayment of interest-bearing
liabilities (335,646) (130,547) (638,258)
Refund on aircraft purchase price for
pre-delivery payment finance 96,738 - 282,317
Dividends paid (51,160) (46,509) (69,764)
---------------------------------------
Net cash from financing activities (290,068) (102,198) (390,915)
---------------------------------------
Total cash movement for the period (170,653) 122,368 270,850
Cash and cash equivalents at the
beginning of the period 1,120,128 849,278 849,278
---------------------------------------
Cash and cash equivalents at the
end of the period 949,475 971,646 1,120,128
---------------------------------------
Group
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Dec 31 Dec 30 June
2016 2015 2016
R'000 R'000 R'000
---------------------------------------
Condensed Consolidated Segmental
Reports
Segmental revenue
Airline 2,992,562 2,858,399 5,725,892
Non-airline 136,280 102,322 233,681
---------------------------------------
3,128,842 2,960,721 5,959,573
---------------------------------------
Segmental results
Airline 495,434 349,914 743,896
Non-airline 49,529 39,421 85,896
---------------------------------------
Operating profit before depreciation,
amortisation, write-off of damaged
aircraft, unrealised gain (loss) on
translation on dollar denominated loan,
compensation for write-off of damaged
aircraft and profit on sale of assets 544,963 389,335 829,792
Depreciation and amortisation -
Airline (203,095) (169,345) (361,072)
Depreciation and
amortisation - Non-airline (3,891) (3,715) (11,031)
Write-off of damaged aircraft
beyond economical repair - Airline - (64,462) (64,462)
Compensation for write-off of
aircraft beyond economical repair -
Airline - 84,124 84,155
Unrealised translation gain (loss)
on dollar denominated loan - Airline 25,492 (91,244) (73,946)
Profit on sale of assets - Airline - 12,450 12,419
-------------------------------------------
Profit from operations 363,469 157,143 415,855
-------------------------------------------
Segmental assets - Airline 5,704,338 4,798,880 5,288,207
Segmental assets - Non-airline 430,749 308,324 322,211
Segmental liabilities - Airline (4,500,187) (3,710,867) (4,158,433)
Segmental liabilities - Non-airline (157,539) (152,536) (122,470)
Segmental capital additions -
Airline (excluding borrowing costs
capitalised) 642,279 925,871 1,480,618
Segmental capital additions-
Non-airline 91,641 20,503 12,569
Group
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 Dec 31 Dec 30 June
2016 2015 2016
R'000 R'000 R'000
---------------------------------------
Condensed Consolidated Statements
of Changes in Equity
Opening balance 1,329,515 1,166,190 1,166,190
Total comprehensive income for
the period 199,006 83,733 192,702
Cash flow hedge reserve - 40,387 40,387
Dividend paid (51,160) (46,509) (69,764)
---------------------------------------
1,477,361 1,243,801 1,329,515
---------------------------------------
Basis of preparation
In terms of the Listings Requirements of the JSE Limited, the Group has
prepared its Unaudited Condensed Consolidated Interim Financial Statements in
accordance with International Financial Reporting Standards, including IAS 34
Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by
the Accounting Practices Committee, Financial Pronouncements as issued by the
Financial Reporting Standards Council and the requirements of the Companies
Act, Act No. 71 of 2008. The accounting policies used in the preparation of
these results are consistent in all material respects with those applied in the
previous Annual Financial statements. During the current interim period the
Group adopted those standards and interpretations in issue and effective for
the interim period. The impact of adopting these new and amended standards and
interpretations has not had a significant impact on the Group’s adopted
accounting policies.
These results have not been audited or reviewed by the Group’s auditors, Grant
Thornton Johannesburg Partnership.
Subsequent Events
No matters have occurred between the reporting date and the date of approval
of the Unaudited Condensed Consolidated Interim Financial Statements which
would have a material effect on these financial statements.
These Unaudited Condensed Consolidated Interim Financial Statements were
prepared by:
Kirsten King CA (SA)
Financial Director
Comair Limited
By order of the Board
P van Hoven (Chairman) E Venter (Chief Executive Officer)
13 February 2017
Sponsor
PSG Capital Proprietary Limited
14 February 2017
Date: 14/02/2017 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
