 "Indigo")
InterGlobe Aviation, which runs the country's largest domestic airline IndiGo, posted a flat net profit of Rs 579 crore in the fourth quarter of FY16 on a year-on-year basis owing to the impact of rupee depreciation and pressure on yields due to growing competition. In the same quarter last year, the airline had recorded a net profit of Rs 577 crore.
Passenger revenue for the quarter under review was up 6.8 per cent at Rs 4,060 crore as the airline carried 24 per cent more passengers on a year-on-year basis and improved its load factor by 2.3 per cent to 85.1 per cent.
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The airline also benefited from a 23 per cent drop in jet fuel price and its fuel bill declined 14.7 per cent to Rs 1,023 crore. Its earnings before interest, tax, depreciation, amortisation, and rentals was up 10.8 per cent at Rs 1,548 crore, with a margin of 37.8 per cent.
Simultaneously, the addition of the fuel-efficient A320neos led to a saving in fuel cost by 13 per cent as compared to the A320 classics.
The airline's revenue was in line with Bloomberg estimate and its adjusted net profit came nearly 10 per cent higher than estimates.
For the full year, IndiGo posted its highest-ever profit of Rs 1,989 crore, which is 52 per cent higher than FY15’s. The company announced final dividend of Rs 15 per share. Last year, it had come under fire from analysts and investors for paying interim dividend of Rs 1,002 crore to its promoters few months before its listing.
In February, the airline management had given a profit warning for Q4 citing rupee depreciation as a cause of concern. Brokerages, too, were expecting the airline's profit to decline on a year-on-year basis as airline's yields came under pressure during January-March.
The average fare charged by the airline declined 15 per cent over last year to Rs 3,958, resulting in slower revenue growth. Non-fuel costs also rose 28 per cent to Rs 2,413 crore due to weakened rupee and an increase in employee costs. A 22 per cent increase in ‘other income’ to Rs 156 crore helped the airline to keep the profit constant. It earned Rs 90 crore in cash and non-cash incentives, helping it lower its lease rentals.
During the quarter under review, IndiGo added seven aircraft including three Airbus A320neos and increased capacity by 19 per cent. The airline plans to add 29 aircraft in FY17 against 24 aircraft planned earlier, though issues regarding the engines of the A320neos remain. “We expect that the issue will be resolves before the end of this financial year,” IndiGo president Aditya Ghosh said.
“We have started getting deliveries of A320neos. The A320neo will enable us to structurally reduce our costs as fuel continues to be the single-largest element of our cost structure,” said Ghosh.
RESULTS
Passenger revenue:
Rs 4,060 cr (up 6.8% y-o-y)
Net profit:
Rs 579 cr (up 0.3% y-o-y)
Passengers flown:
8.93 mn (up 23%)
