Mr. Gregg Saretsky reports
WESTJET REPORTS SECOND QUARTER NET EARNINGS OF $48 MILLION, UP 32 PER CENT
WestJet Airlines Ltd. has released its second quarter results for 2017, with net earnings of $48.4-million, or 41 cents per fully diluted share, as compared with the net earnings of $36.7-million, or 30 cents per fully diluted share, reported in the second quarter of 2016, up 32.0 per cent and 36.7 per cent, respectively. WestJet achieved its 49th consecutive quarter of profitability and flew a record 5.9 million guests. Based on the trailing 12 months, the airline achieved a return on invested capital of 9.8 per cent, compared with the 10.0 per cent reported in the previous quarter.
"I am very pleased with the positive momentum we are seeing in our business as we reported second quarter earnings growth, margin expansion, double-digit revenue growth and for the second consecutive quarter positive year-over-year RASM growth. Clearly our business fundamentals are strong and we are confident that the strategic initiatives we are pursuing position us for continued profitable growth," said WestJet president and chief executive officer Gregg Saretsky. "These results are a great start to our November profit share, thanks to the commitment and passion of our more than 12,000 WestJetters who continue to deliver our brand of friendly caring service."
OPERATING HIGHLIGHTS
Q2 2017 Q2 2016 YTD 2017 YTD 2016
Net earnings (millions) $48.4 $36.7 $96.7 $124.3
Diluted earnings per share $0.41 $0.30 $0.82 $1.02
Total revenue (millions) $1,055.0 $949.3 $2,169.3 $1,980.8
Operating margin 7.4% 6.5% 7.3% 9.3%
ASMs (available seat miles) (billions) 7.564 7.116 15.263 14.410
RPMs (revenue passenger miles) (billions) 6.260 5.749 12.653 11.737
Load factor 82.8% 80.8% 82.9% 81.5%
Segment guests 5,908,876 5,301,338 11,596,535 10,626,444
Yield (revenue per revenue passenger mile) (cents) 16.85 16.51 17.14 16.88
RASM (revenue per available seat mile) (cents) 13.95 13.34 14.21 13.75
CASM (cost per available seat mile) (cents) 12.91 12.48 13.18 12.46
Fuel costs per litre (cents) 62 53 63 50
CASM, excluding fuel and employee profit share (cents) 9.84 9.93 10.06 9.89
Normal course issuer bid
Today, WestJet also announced that the Toronto Stock Exchange has accepted the airline's notice to make a normal course issuer bid for 5 per cent of the currently issued and outstanding shares.
Dividend declaration
On July 31, 2017, WestJet's board of directors declared a cash dividend of 14 cents per common voting share and variable voting share for the third quarter of 2017, to be paid on Sept. 29, 2017, to shareholders of record on Sept. 13, 2017. All dividends paid by WestJet are, pursuant to Subsection 89(14) of the Income Tax Act, designated as eligible dividends, unless indicated otherwise. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit.
Analyst conference call
WestJet will hold its quarterly analyst conference call today, Aug. 1, 2017, at 8 a.m. MT (10 a.m. ET). Mr. Saretsky and executive vice-president of finance and chief financial officer Harry Taylor will discuss WestJet's second quarter results and answer questions from financial analysts and members of the media. The conference call will be available in Toronto by calling 416-915-3239, in Vancouver by calling 604-638-5340, and across Canada and the United States through the toll-free telephone number 1-800-319-4610. The call can also be heard live through an Internet webcast accessible via the media and investor relations section of the company's website.
About WestJet Airlines Ltd.
The airline is proud to be Canada's most trusted airline and one of very few airlines globally that does not commercially overbook. Together with its regional airline, WestJet Encore, it offers scheduled service to more than 100 destinations in North America, Central America, the Caribbean and Europe and to more than 175 destinations in over 20 countries through its airline partnerships. WestJet Vacations offers affordable, flexible vacations to more than 60 destinations and the choice of more than 800 hotels, resorts, condos and villas. Members of the WestJet Rewards program earn WestJet dollars on flights, vacation packages and more.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(in thousands, except per share)
Three months ended June 30 Six months ended June 30
2017 2016 2017 2016
Revenue
Guest $897,863 $814,402 $1,832,635 $1,700,622
Other 157,163 134,911 336,664 280,136
1,055,026 949,313 2,169,299 1,980,758
Operating expenses:
Aircraft fuel 224,935 182,583 460,451 348,998
Salaries and benefits 228,710 218,250 459,725 440,573
Rates and fees 163,863 152,470 326,126 306,214
Depreciation and amortization 99,342 86,821 196,965 168,590
Sales and marketing 88,776 84,118 189,114 173,195
Maintenance 46,553 50,345 113,501 103,283
Aircraft leasing 40,565 44,973 84,907 91,280
Other 76,486 69,519 164,660 142,617
Employee profit share 7,755 (1,192) 14,782 21,310
976,985 887,887 2,010,231 1,796,060
Earnings from operations 78,041 61,426 159,068 184,698
Non-operating income (expense)
Finance income 4,448 3,547 8,647 7,294
Finance cost (13,154) (12,793) (28,855) (17,955)
Gain (loss) on foreign exchange (4,230) 1,574 (4,513) 6,295
Gain (loss) on disposal of property and equipment 2,549 (1,782) 3,917 (2,862)
Gain (loss) on derivatives 353 (249) (1,964) (1,561)
(10,034) (9,703) (22,768) (8,789)
Earnings before income tax 68,007 51,723 136,300 175,909
Income tax expense (recovery)
Current 9,311 14,945 20,052 54,430
Deferred 10,329 124 19,571 (2,820)
19,640 15,069 39,623 51,610
Net earnings 48,367 36,654 96,677 124,299
Earnings per share
Basic 0.41 0.30 0.83 1.02
Diluted 0.41 0.30 0.82 1.02
We seek Safe Harbor.
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