• Ojas Sharma

SpiceJet earning report Q1FY20 - Pass or Fail?

SpiceJet has reported its best-ever quarter with a net profit of Rs. 261.7 crore. The earnings reported for Q1FY20 has improved so much due to various factors like operation efficiency, reimbursement from Boeing, etc. This is considerable improvement considering in the same quarter last year SpiceJet had reported loss of Rs. 38.1 crore.

The revenue from operation increased 35 percent YoY to Rs. 3002.1 crore as compared to Rs. 2220.4 crore last year. Total income increased to Rs. 3145.3 crore in Q1FY20 as compared to Rs. 2253.3 crore from the corresponding quarter last year. The EBITDA (Earnings before interest, tax, depreciation and amortization) profit is Rs. 747.5 crore as opposed to Rs. 100.5 crore for the same quarter last year.

Ajay Singh, Chairman and Managing Director, SpiceJet said, “SpiceJet has been on a spectacular growth journey and this quarter, in particular, has been very special for us. We added 32 aircraft to our fleet expanding at a pace unprecedented for a sector plagued by crisis showcasing our robust business model and proven operational capabilities.”

“We are happy that we were able to minimize passenger inconvenience by quickly filling the capacity gap created in India’s aviation sector. The results would have been vastly better but for the painful grounding of the MAX aircraft. We look forward to their swift return to service in the near future that will help SpiceJet increase its margins and provide a superior level of service.”

One of the ways SpiceJet has improved its operation is by increasing their daily utilization to 15-16 hours for B737 NG fleet and 13-14 hours per day for its Q400 fleet. Also, Boeing has given reimbursement of Rs. 114.1 crore for the grounded 737 Max aircrafts. SpiceJet hopes that Boeing 737 Max aircrafts will resume normal services this month based on the confirmation given by Boeing.

Between the months of April and June this year, SpiceJet has added 27 Boeing 737 NG aircraft, four Bombardier Q400s and one B737 freight. The addition of these 32 aircraft takes SpiceJet’s total aircraft count to 107 aircraft. SpiceJet also continues to have the highest load in India and its average domestic load for this quarter was 93.8 percent.

Overall, the market should look towards these earnings positively and the current stock price, at Friday's market close of 137.95, should see some upward movement.

Image Courtesy: SpiceJet