Jet Airways Ltd.’s posted an unexpected loss in the quarter ended March on account of higher fuel expenses and currency fluctuations.
The airline’s net loss stood at Rs 1,036 crore as compared with a profit of Rs 602.4 crore in the same quarter last year, it said in a stock exchange filing. That compares with the a Rs 20.57 crore profit estimate by analysts tracked by Bloomberg. The bottom line was hit by a 30.5 percent increase in fuel expenses to Rs 2,063 crore as international oil prices rallied.
“Financial performance during the quarter was weaker due to the continuing increase in the price of Brent fuel without a corresponding increase in air fares, as well as mark-to-market adjustments due to a weaker rupee,” Vinay Dube, chief executive officer at Jet Airways said in a separate media statement.
Besides, a one-time maintenance charge of Rs 253 crore weighed on the net profit. The airline also suffered an impairment loss of Rs 46.1 crore during the quarter on the loans advanced to subsidiary Jet Lite (India) Ltd.
Revenue increased 8.7 percent to Rs 5,925 crore as compared to the same quarter last year. This too fell short of the Rs 6,412 crore estimated.
Auditors’ Red Flag
Jet Airways’ net worth turned negative in March 2018 after it reported a quarterly loss for the first time in eleven quarters.
The company’s auditors said the financial statement was prepared on a “going concern basis” as they expect various initiatives – from cutting costs to enhancing ancillary revenues – to improve its operating performance.
“The appropriateness of assumption of going concern is dependent upon realisation of the various initiatives undertaken by the Company and/or the Company’s ability to raise requisite finance or generate cash flows in future to meet its obligations, including financial support to its subsidiary companies,” according to the Independent Auditor's Report attached with the financial results.
Ahead of the earnings announcement, shares rose 0.23 percent on the BSE.