SpiceJet Ltd.’s profit missed analyst estimates on account of a rise in fuel costs in the quarter ended March.
Net profit rose 9.5 percent year-on-year to Rs 46 crore in the quarter ended March, SpiceJet said in its filing to the stock exchanges. That’s much lower than Rs 78.6 crore estimated by analysts Bloomberg tracks. The bottom line took a hit due to an over 31 percent surge in aviation turbine fuel prices as crude prices rallied. However, the airline managed to report the thirteenth successive quarter of profit.
Revenue increased 25 percent to Rs 2,029.4 crore as compared with the same quarter last year. The top line was aided by an 8 percent increase in passenger yields – the revenue per available seat kilometer– and record domestic load factor of 95.4 percent in the quarter. These two factors offset a significant rise in fuel costs.
Higher passenger yields helped the carrier report an operating profit in the quarter. Earnings before interest, tax, depreciation, amortisation and rent costs rose 16 percent to Rs 367 crore on a year-on-year basis. The operating margin expanded 130 points to 18.1 percent during the same period.
“With the fuel efficient B737 MAX joining our fleet in the coming months we will continue to expand at home and abroad and strive to improve profitability and operating performance,” Ajay Singh, chairman and managing director of SpiceJet said in the press release accompanying the earnings filing.
The carrier had inked a $12.5 billion pact with CFM International for the purchase of LEAP-1B engines to power its 155 Boeing 737 MAX fleet. “This upcoming fiscal 2019 will witness an induction of 19 737 MAX aircraft which will reduce the costs by 8-9 percent on this aircraft class,” Singh added.
The airline launched operations five destinations across the country including Kandla, Porbandar, Puducherry, Jaisalmer and Adampur during the financial year 2017-18 under the regional connectivity scheme. During the current quarter, SpiceJet will start operations on some other UDAN sectors like Kanpur and Hubli, the press release said.