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A tough operating environment with high fuel costs, weak rupee and low pricing power took a toll on the June 2018 quarter performance of SpiceJet too.
The low-cost carrier’s profit before exceptional items crashed more than 85 per cent y-o-y to ₹25.4 crore in the quarter from ₹175.2 crore year-ago.
Adding to the pain was the exceptional expense of ₹63.5 crore as provision towards an arbitration order pertaining to the share transfer dispute with the Marans, the erstwhile promoters. This pushed the bottom-line into the red with the airline posting a loss after tax of ₹38.1 crore , as against profit of ₹ 175.2 crore in the June 2017 quarter.
In a statement announcing its financial results, the airline said that with this one-time provision, it has now fully provided the maximum amount payable under the arbitration award. The arbitration award shows an interest payable of ₹92.5 crore and an interest receivable of ₹29 crore for the airline.
Arbitration tribunal
Recently, the arbitration tribunal, while rejecting the Marans’ ₹1,323-crore claim for loss on account of non-issuance of shares ruled that SpiceJet had to refund them₹308 crore, explore the possibility of allocating preference shares, failing which a refund of another ₹271 crore will have to be made along with the interest of ₹92.5 crore. SpiceJet was also entitled to ₹29 crore as interest receivable. Last year, the airline had deposited ₹579 crore in bank guarantee and cash with the registrar of the Delhi High Court.
In addition to the exceptional item, the airline accounted for ₹51 crore as forex losses (including the provision of ₹25.2 crore of forex revaluation) due to the depreciation of the Rupee.
SpiceJet’s income for the quarter was ₹2,270.8 crore (₹1,886.3 crore). In the same period, its expenses were ₹2,245.4 crore from ₹1,711 crore last year. EBITDA before exceptional items was ₹118.7 crore (₹248.4 crore). EBITDAR before exceptional items was ₹398.4 crore (₹479.4 crore).
The airline additionally paid ₹203 crore on account of increase in cost of aviation turbine fuel and ₹44 crore on account of foreign exchange losses as compared to the same period previously.
In percentage terms, SpiceJet’s income per available seat kilometer (ASKM) grew by 6 per cent as compared to the same quarter last year due to increase in passenger load factor and an increase in average fares and ancillary revenues. Operating expenses per ASKM increased by 15 per cent on account of 34 per cent increase in ATF and 4 per cent increase in exchange rate.
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