Jet Airways’ Profit More Than Doubles But Margins Hurt By Higher Fuel Costs
- Net profit in the first quarter rose 107.4 percent to Rs 53.5 crore year-on-year.
- Jet Airways set aside Rs 56.5 crore as provisions against the loans given to Jet Lite.
- Operating margin contracted 300 basis points to 2.6 percent on account of a 31 percent rise in fuel costs.
Jet Airways Ltd. saw its profit more than double in the April-June quarter as it reduced provisioning for loans advanced to its subsidiary Jet Lite but higher fuel costs weighed on the margin.
Net profit in the first quarter rose 107.4 percent to Rs 53.5 crore, according to a stock exchange filing. The Bloomberg consensus of analyst estimates had pegged the profit at Rs 50 crore. The carrier set aside Rs 56.5 crore as provisions against the loans given to Jet Lite, which had a negative net worth as of June. The company had provisioned Rs 81 crore for the same in the corresponding quarter last year.
Operating income fell 50.2 percent over last year to Rs 144 crore while the operating margin contracted 300 basis points to 2.6 percent on account of a 31 percent rise in fuel costs.
The airline’s total costs too went up 11.6 percent to Rs 5,840 crore.
Revenue went up 9.9 percent to Rs 5,649 crore compared to the same quarter last year.
Jet Airways held 15.8 percent market share in India's domestic airspace as of July, according to data from the Directorate General of Civil Aviation. Shares closed 1.7 percent higher, ahead of the announcement of results, compared to a 0.87 percent rise in the benchmark BSE Sensex.