Indigo’s Q1FY19 PAT declines by 97%; misses analysts estimate

The low-cost carrier, Interglobe Aviation (Indigo), saw a weak June 2018 quarter, as the company posted a massive 96.6% decline in net profit to Rs 27.8 crore in Q1FY19. This is not even half to what Indigo had posted in Q1FY18 wherein the PAT stood at Rs 811.1 crore. The airline even missed analysts estimate with massive margin, as Bloomberg poll of experts had estimated Indigo’s PAT to come in at Rs 514 crore this quarter.
 
Following the announcement of result, the share price of Indigo has been trading on a negative note and has dropped so far over 1% on exchanges. The company is currently trading at Rs 1004.25 per piece, down by 0.23% on the BSE at around 1631 hours. 

Rahul Bhatia co-founder and interim chairman of Indigo said, “While we faced headwinds during the quarter, we remain focused on executing our long term plan. We added capacity into new routes and destinations domestically and also continued to connect international destinations to various cities in India.”

In its financial audit report, Indigo blamed adverse impact of foreign exchange, high fuel prices and the competitive fare environment  as a reason for their weak performance. 

The company’s EBITDAR (operating profit) was also down by 42.4% to Rs 1,130.1 crore in Q1FY19 compared to Rs 1,961.8 crore in Q1FY18. While EBITDAR margin was at 17.4% for the quarter ended June 2018, compared to 34.1 % for the same period last year. 

Indigo’s fuel cost during this quarter rose by 54.4% to Rs 2,715.6 crore as against Rs 1,759.2 crore in similar quarter of the previous year. 

This led to increase in total expenses for the quarter ended June 2018 to Rs 6,787 crore, an increase of 40.5% over the same quarter last year. CASK excluding fuel was Rs 2.17, an increase of 13 .3% over the same quarter last year. 

Indigo said, “Our CASK excluding fuel was majorly impacted by the adverse movement in foreign exchange in the quarter.”

For the period April-June 2018, the company had a Technical Dispatch Reliability of 99.85%, on-time performance of 83.9% at four key metros and flight cancellation rate of 0.33%. 

The total income of the airline was at Rs 6,818.3 crore which was higher by  14.5% over the same period last year. 

For the quarter, Indigo’s passenger ticket revenues were Rs 5,769.4 crore, an increase of 13 .6% and ancillary revenues were Rs 682.7 crore, an increase of 16.0% compared to the same period last year. 

Basic Earnings per share was Rs 0.72 for the quarter ended June 2018.  

As of June 2018, IndiGo had a total cash balance of Rs 13,205.6 crore comprising Rs 6,104.9 crore of free cash and Rs 7,100.7 crore of restricted cash. 

Total debt as on June 2018 was Rs 2,521.9 crore. The entire debt for IndiGo is aircraft related. lndiGo does not have any working capital debt. 

Going ahead, Indigo expects second quarter fiscal 2019 year-over-year capacity increase in ASKs to 28%. While for full year fiscal 2019 year-over-year capacity increase in ASKs is expected to be 25%.