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Jet Airways
High fuel cost mars 4Q results
„Cut PO on higher ATF assumptions; Retain Buy
We have cut our EBITDAR estimates by ~5% for FY12-13E to reflect higher average
ATF assumptions of +10%/5% over FY12E/13E. However we have raised our traffic
assumptions by 3%-5% over FY12E-13E on account of strong demand. We also
tweak our yield assumptions and load factors on account of higher fuel surcharge. We
have cut our PO to Rs650 (from Rs750) which is based on an unchanged target
multiple of 8x FY12E EV/EBITDAR on our lower EBITDAR estimate.
Exceptional items boost 4QFY11 results
On account of higher fuel cost, Jet (ex-sub Jetlite) reported net loss of Rs1.25bn
in Q4FY11 (vs. Rs586mn profit in Q4FY10). Also, excluding exceptional items the
net loss was higher at Rs2bn. On a full year basis Jet has reported a net profit of
Rs97mn vs. a loss of Rs4.7bn in the previous year. Subsidiary JetLite posted net
loss of Rs1.1bn in FY11.
De-leveraging plans back in action
Post the verdict of the Jet-Sahara court case, management has guided that the
BKC plot monetization is expected to be completed in Q1FY12. Jet is also
evaluating the possible sale & leaseback of its B737 aircraft. On account of these
efforts, management has guided the reduction of debt by Rs19bn in FY12.
Outlook improves but highly dependant on softer ATF price
With the onset of holiday season, Jet along with industry has been able to raise fuel
surcharge in May. We expect yields to grow 6%-7% for domestic & 3%-4% for
international segment on a QoQ basis. Coupled with higher utilization on account of
holiday season should bring Jet closer to breakeven in Q1FY12. However lack in
softening of ATF price could prevent reaching profitability. Our assumptions are
based on ATF prices at ~$120/bbl in 1HFY12 and ~$110/bbl in 2HFY12.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Jet Airways
High fuel cost mars 4Q results
„Cut PO on higher ATF assumptions; Retain Buy
We have cut our EBITDAR estimates by ~5% for FY12-13E to reflect higher average
ATF assumptions of +10%/5% over FY12E/13E. However we have raised our traffic
assumptions by 3%-5% over FY12E-13E on account of strong demand. We also
tweak our yield assumptions and load factors on account of higher fuel surcharge. We
have cut our PO to Rs650 (from Rs750) which is based on an unchanged target
multiple of 8x FY12E EV/EBITDAR on our lower EBITDAR estimate.
Exceptional items boost 4QFY11 results
On account of higher fuel cost, Jet (ex-sub Jetlite) reported net loss of Rs1.25bn
in Q4FY11 (vs. Rs586mn profit in Q4FY10). Also, excluding exceptional items the
net loss was higher at Rs2bn. On a full year basis Jet has reported a net profit of
Rs97mn vs. a loss of Rs4.7bn in the previous year. Subsidiary JetLite posted net
loss of Rs1.1bn in FY11.
De-leveraging plans back in action
Post the verdict of the Jet-Sahara court case, management has guided that the
BKC plot monetization is expected to be completed in Q1FY12. Jet is also
evaluating the possible sale & leaseback of its B737 aircraft. On account of these
efforts, management has guided the reduction of debt by Rs19bn in FY12.
Outlook improves but highly dependant on softer ATF price
With the onset of holiday season, Jet along with industry has been able to raise fuel
surcharge in May. We expect yields to grow 6%-7% for domestic & 3%-4% for
international segment on a QoQ basis. Coupled with higher utilization on account of
holiday season should bring Jet closer to breakeven in Q1FY12. However lack in
softening of ATF price could prevent reaching profitability. Our assumptions are
based on ATF prices at ~$120/bbl in 1HFY12 and ~$110/bbl in 2HFY12.
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