BOGOTA, Colombia--(BUSINESS WIRE)--Avianca Holdings S.A., (NYSE: AVH) (BVC: PFAVH), the following results pertain to the 4Q 2014, financial and operational information is provided in millions of US dollars unless stated otherwise. The following information is presented in accordance with International Financial Reporting Standards (IFRS). The reconciliation between IFRS and the financial information which is not in these accounting principles can be seen in the financial tables section of this report. Except when noted, all comparisons refer to fourth quarter 2013 (4Q 2013) numbers. Figures and operating metrics of Avianca Holdings S.A. (“Avianca”, “the Company”, “Issuer Entity” or “Issuer”) are presented on a consolidated basis.
AVIANCA HOLDINGS S.A.
NYSE: AVH BVC: PFAVH
Financial Highlights
(12 months ended December 31st)
| 2013 | 2014 | |||
| Revenues | 4.6Bn | 4.7Bn | ||
| EBITDAR | 828.2 | 783.7 | ||
| EBIT | 384.9 | 284.6 | ||
| Net Income | 248.8 | 120.5 | ||
| Net income* | 236.7 | 129.1 |
*Excluding Special Items
| Q4-13 | Q4-14 | |||
| Revenues | 1.20 Bn | 1.24Bn | ||
| EBITDAR | 245.8 | 255.1 | ||
| EBIT | 114.7 | 114.5 | ||
| Net Income | 65.4 | 97.0 | ||
| Net income* | 68.4 | 47.4 |
*Excluding Special Items
Profitability
(12 months ended December 31st)
| 2013 | 2014 | |||
| EBITDAR % | 18.0% | 16.7% | ||
| EBIT % | 8.4% | 6.1% | ||
| Net income % | 5.4% | 2.6% | ||
| Net Income%* | 5.1% | 2.7% |
*Excluding Special Items
| Q4-13 | Q4-14 | |||
| EBITDAR% | 20.4% | 20.5% | ||
| EBIT % | 9.5% | 9.2% | ||
| Net income % | 5.4% | 7.8% | ||
| Net Income%* | 5.7% | 3.8% |
*Excluding Special Items
Operational Highlights
(12 months ended December 31st)
| 2013 | 2014 | |||
| Passengers | 24.6M | 26.23M | ||
| ASKs | 38.8Bn | 41.1Bn | ||
| RPKs | 31.2Bn | 32.6Bn | ||
| Load Factor | 80.5% | 79.4% | ||
| RASK | 11.9 | 11.5 | ||
| CASK | 10.9 | 10.8 |
| Q4-13 | Q4-14 | |||
| Passengers | 6.33M | 6.91M | ||
| ASKs | 9.84Bn | 10.59Bn | ||
| RPKs | 7.94Bn | 8.42Bn | ||
| Load Factor | 80.7% | 79.6% | ||
| RASK | 12.2 | 11.7 | ||
| CASK | 11.1 | 10.6 |
Fourth Quarter 2014 Highlights
- Avianca Holdings would have earned an adjusted net income for the quarter ended December 31, 2014 of $47.4 million, excluding special items, posting an adjusted net income margin of 3.8%. For full year 2014 the Company earned an adjusted net income of $129.1 million, while the adjusted net income margin came in at 2.7%.
- Operating revenues amounted to $1.24 billion, up 3.1% over 4Q 2013, mainly due to a 46% increase in cargo and other revenues as a result of the optimized use of our cargo capacity as well as the continued growth of our loyalty program. For the 4Q of 2014 our Lifemiles program ended the year with more than 5.9 million members. These results were partially offset by a 4.3% decrease in passenger revenues due to the capacity reallocation strategy that was implemented in early 2014. Operating revenues during 2014 totaled $4.7 billion, up 2.0% when compared to the same period of 2013.
- Cost per available seat kilometer (CASK)1 decreased 4.2% to 10.6 cents in 4Q 2014, compared to 11.1 cents in 4Q 2013. As such CASK ex-fuel1 reached 7.6 cents, while cycles rose 18.1% for the quarter. CASK1 for the twelve-month period of 2014 declined 1.5% to 10.7 cents when compared to the same period of 2013. These results were mainly driven by the cost saving initiatives implemented throughout 2014 as well as the drop in fuel prices that the market experienced during the last quarter of this year.
- EBITDAR1 for the 4Q 2014 was $258.1 million, while the EBITDAR1 margin reached 20.8%, 39 bps above the EBITDAR margin reported for 4Q 2013. The EBITDAR1 for 2014 totaled $786.7 million, while the EBITDAR1 margin reached 16.7%.
- Operating income (EBIT1) totaled $118.4 million, and as a result the operating margin for 4Q 2014 reached 9.54%, in line with the margin recorded for the 4Q 2013. The operating income (EBIT1) for the twelve-month period of 2014 was $293.0 million, while the 12-month operating margin in 2014 was 6.2%.
- Capacity, measured in ASKs (available seat kilometers), increased 7.6% during 4Q 2014, mostly due to the continued expansion in our domestic markets, the entry into operation of the Bogota-London route as well as three additional weekly frequencies to Barcelona from Bogota. Furthermore, passenger traffic, measured in RPKs (revenue passenger kilometers), grew 6.1%, reaching a consolidated load factor of 79.6%. During 2014, capacity, measured in ASKs, rose 5.9%, while passenger traffic, measured in RPKs, increased 4.5%, ending the year with an overall load factor of 79.4%.
- In accordance with the fleet renovation and modernization plan, between October and December 2014, the Company took delivery of one A321, one A319 (both equipped with sharklets), three ATR72, one A330, one A330F and four B787 Dreamliners, while phasing-out two Fokker 50. Consequently, Avianca Holdings S.A. and its subsidiaries ended the year with a consolidated operating fleet of 181 aircrafts.
1When indicated during for the 4Q of 2014 the total operating costs exclude incremental costs of ~$860,000 in rent payments (Wet Lease) associated to the delay in the delivery of the B787 Dreamliners as well as onetime expenses of ~$3.0 million associated to the head count optimization project. In addition to the latter the full year figures also exclude the ~$4.6 million related to one-time expenses incurred over the 1Q of 2014 associated to the grounding of the F50 fleet.
CEO's Comment
I am pleased to share with you the results for the year. 2014 was a year of milestones and challenges that the company achieved and overcame. Throughout the year we took steps to strengthen our position in the competitive landscape and better prepare the company for 2015. We expanded our network to new destinations and entered into new commercial agreements, offering further connectivity to our passengers.
As such the company signed a code share agreement with Turkish Airlines extending Avianca’s reach to Asia and the Middle East. In addition our network in Ecuador became part of Star Alliance offering new connectivity to our customers. Furthermore we launched new international routes between Bogota and London, Pereira and Cartagena to New York as well as incremental frequencies to destinations in South America, the Caribbean and Central America. On the domestic front, we opened routes from Lima to Iquitos and Bogota to Villavicencio. As a result during the year capacity in terms of ASKs grew 5.9% when compared to 2013 while our traffic figures in terms of RPKs increased by 4.5%. Therefore our load factor closed at 79.4%, which came in above the upper limit of our guidance for 2014.
Over the course of the year we continued to address the challenges related to our operation in Venezuela, and quickly adopted a more defensive and conservative approach, which enabled us to readjust our network as well as to recover the profitability levels we reached by the end of 2013. Consequently, we successfully reduced our exposure to a difficult market, while allowing us to strengthen our presence on other profitable routes. As such we increased the frequencies from Bogota to Santiago, Puerto Rico, Guatemala City, La Habana, Cancun and Barcelona; Lima to Cali and Bogota; Guatemala City to San Jose, and finally from San Jose to Panama.
During the year, we continued with our fleet renovation plan, which was marked by the incorporation of 32 brand new aircraft, out of which 16 were incremental to the operation. Among the deliveries, the company received fourteen single aisle aircraft of the A320 family, ten ATR 72-600 for regional flights, two A330 passenger aircraft, two A330 freighter aircraft, and four B787-8 Dreamliners for our long haul operation. The renovation included the phase-out of our Fokker 50 aircraft, selling all 10 during the year, as well as the retirement of the ATR42 regional fleet. Finally, we initiated the phase-out of the first two A330 aircraft in accordance with our business plan.
In order to improve service to our clients and optimize capacity utilization we relocated the service of our high density domestic routes to the new terminal T1 at the El Dorado Airport, from where routes to Barranquilla, Cali, Cartagena, Medellin and Pereira are now served. We added new VIP lounges to key international destinations such as San Salvador and Santiago as well as to domestic key cities in Colombia such as Rionegro, Bucaramaga and Cucuta to better assist our corporate travelers and our Lifemiles elite members.
Cargo transportation reported solid growth numbers in 2014, increasing revenues 11.6% when compared to 2013. Our traffic expressed in RTKs grew 25.5%, outperforming our ATK growth year-over-year, resulting in an improvement of 400 basis points in Load Factor over 2013. As with passenger traffic, we focused on expanding our routes and strengthening our partnerships. We acquired a stake in Aerounion in Mexico and signed a new commercial agreement with Etihad, creating a stronger cargo operation and more connectivity from Los Angeles via Mexico, while also improving cargo connectivity to Europe, from Milan and Amsterdam to Bogota.
In terms of our loyalty program, LifeMiles, we launched a Retail Coalition with local restaurants and retailers to grow the reach of the program and provide members with additional options to earn and redeem miles. Finally the year ended with more than 5.9 million members, which represent a 9.6% increase over the same period in 2013.
Lastly, throughout 2014 we managed to get Avianca back on track to the profitability path we had laid out early in the integration as we reached more than US$4.7 billion in operating revenues. As such we managed to expand the profitability of the business quarter after quarter reaching an adjusted EBIT margin for the fourth quarter of 9.5% and of 6.2% for the full year.
As we enter into 2015, we are confident that Avianca will deliver sustainable and long-term profitable growth. We have taken the necessary steps to strengthen the Company for the future. We understand the challenges and opportunities that lie ahead such as the decline in fuel prices as well as the depreciation of local currencies. However, today we are in a better position to seize growth opportunities. We are therefore raising our EBIT margin guidance for 2015 and increasing the range by 200 basis points as we expect to achieve an operational margin between 8% - 10%. We look forward to continue serving our clients while strengthening our strategic position in our key markets as we intend to deliver stronger results to our stakeholders.
Sincerely,
Fabio Villegas Ramirez
Chief Executive Officer
|
Consolidated Financial and Operational |
4Q-13 | 4Q-14 | ∆ Vs. 4Q-13 | |||||
| ASK's (mm) | 9,837 | 10,586 | 7.6% | |||||
| RPK's (mm) | 7,938 | 8,422 | 6.1% | |||||
| Total Passengers (in millions) | 6,327 | 6,909 | 9.2% | |||||
| Load Factor | 80.7% | 79.6% | -1.4% | |||||
| Departures | 62.711 | 74.044 | 18.1 | |||||
| Block Hours | 121.437 | 135.808 | 11.8% | |||||
| Stage length (km) | 1,272 | 1,202 | -5.5% | |||||
| Fuel Consumption Gallons (000's) | 104,166 | 111,267 | 6.8% | |||||
| Yield (cents) | 13.0 | 11.7 | -9.8% | |||||
| RASK (cents) | 12.2 | 11.7 | -4.2% | |||||
| PRASK (cents) | 10.5 | 9.3 | -11.1% | |||||
| CASK (cents) | 11.1 | 10.6 | -3.9% | |||||
| CASK ex. Fuel (cents) | 7.7 | 7.7 | 0.0% | |||||
| CASK Adjusted (cents) 1 | 11.1 | 10.6 | -4.2% | |||||
| CASK ex. Fuel Adjusted (cents) 1 | 7.7 | 7.6 | -0.50% | |||||
| Foreign exchange (average) COP/US$ | $ | 1,913.2 | $ | 2,185.7 | 14.2% | |||
| Foreign exchange (end of period) COP/US$ | $ | 1,925.8 | $ | 2,392.5 | 24.2% | |||
| WTI (average) per barrel | $ | 97.3 | $ | 73.2 | -24.8% | |||
| Jet Fuel Crack (average) per barrel | $ | 24.0 | $ | 18.7 | -22.4% | |||
| US Gulf Coast ( Jet Fuel average) per barrel | $ | 121.4 | $ | 91.8 | -24.4% | |||
| Fuel price per Gallon (including hedge) | $ | 3.23 | $ | 2.84 | -12.0% | |||
| Operating Revenues ($M) | $ | 1,204.4 | $ | 1,241.3 | 3.1% | |||
| EBITDAR ($M) | $ | 245.8 | $ | 255.1 | 3.8% | |||
| EBITDAR Margin | 20.4% | 20.5% | +15 bp | |||||
| EBITDA ($M) | $ | 176.0 | $ | 172.1 | -2.2% | |||
| EBITDA Margin | 14.6% | 13.9% | -75 bp | |||||
| Operating Income ($M) | $ | 114.7 | $ | 114.5 | -0.2% | |||
| Operating Margin ($M) | 9.5% | 9.2% | -30bp | |||||
| Net Income ($M) | $ | 65.4 | 97.0 | +48.2% | ||||
| Net Income Margin | 5.4% | 7.8% | +238pb | |||||
| EBITDAR (Adjusted) ($M) | $ | 245.8 | $ | 258.1 | +5.0% | |||
| EBITDAR Margin (Adjusted) | 20.4% | 20.8% | +39bp | |||||
| EBITDA (Adjusted) ($M) | $ | 176.0 | $ | 176.0 | 0.0% | |||
| EBITDA Margin (Adjusted) | 14.6% | 14.2% | -44bp | |||||
| Operating Income ($M) (Adjusted) | $ | 114.7 | 118.4 | +3.2% | ||||
| Operating Margin (Adjusted) | 9.52% | 9.54% | + 2 bp | |||||
| Adjusted Net Income ($M) | $ | 68.4 | $ | 47.4 | -30.7% | |||
| Net Income Margin (Adjusted) | 5.7% | 3.8% | -186bp | |||||
|
(Adjusted: Excluding non-cash Fx charges, gain or loss on assets as well as derivative instruments and one-time expenses described in footnote (1) |
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MANAGEMENT COMMENTS ON 4Q 2014 RESULTS
Avianca Holdings reached an operating income (EBIT1) of $118.4 million for 4Q 2014, while the operating income (EBIT1) margin came in at 9.5%. These results were mainly driven by an efficient redeployment of capacity (ASKs) as well as strong demand observed in the Colombian domestic market and international routes to Europe and South America. As a result, the Company was able to increase its passenger numbers by 9.2%, partially offset by a 9.8% yield decline given the capacity reallocation efforts. Moreover our cargo business performance continued to yield strong results as the Company was able to optimize the use of the available capacity of our new A330 cargo fleet. Thus, cargo and other revenues1 increased by 46% over 4Q 2013.
Operating revenues amounted to approximately $1.24 billion during 4Q 2014. This represents an increase of 3.1% over the same quarter in 2013, due to the optimized use of our cargo capacity as well as the continued growth of our loyalty program. The latter was partially offset by a 4.3% decrease in passenger revenues as result of the capacity reallocation strategy implemented in early 2014. Cargo and other revenues reached $256.8 million during 4Q 2014, representing 20.7% of total revenues, mainly driven by a 21% rise in RTKs. As a consequence, the cargo Load Factor for the quarter increased 600 basis points, reaching an all-time high of 70%. Operating revenues for the twelve months ending December 31, 2014 totaled $4.7 billion. This represents an increase of 2.0% over the same period in 2013.
Over the 4Q 2014, the Company added to its Bogota Hub twelve weekly incremental frequencies on international routes to La Havana, San Juan and Guatemala as well as one incremental frequency to Caracas (solely sold in USD) leaving the company with two daily flights from this hub. Furthermore, the Company started to operate a daily service from Bogota to Barcelona. Consequently, in 4Q 2014, passenger capacity, expressed in ASKs, increased 7.6% over the same period in 2013, resulting in a 5.9% capacity (ASKs) increase for FY 2014.
Operating expenses1 for the 4Q 2014 increased 3.0%, amounting to $1.12 billion. These results were mainly driven by an increase in maintenance and repair costs, which reached $74.6 million, related to the greater size of the fleet and aircraft return conditions as we continued with our fleet renewal program. Moreover, aircraft rentals rose by $12.4 million due to an increase in the size of the fleet, which passed from 154 aircrafts in 4Q 2013 to 181 aircrafts at the end of 4Q 2014. Ground operations in the quarter rose 18.6% when compared to the same period of 2013, mainly due to an 18.1% increase in cycles as the company added incremental frequencies and new routes. The latter was partially offset by a decrease in the cost associated to insurance premiums, which are accounted under flight operations as well as a 5.9% decrease in fuel costs related to the recent drop in fuel prices.
Total operating expenses1 for 2014 rose 4.4% to $4.4 billion, and were mainly due to the aforementioned increase in maintenance and repairs, which reached $265.9 million for the year and $ 25.7 million increase in depreciation and amortization associated to the changes in the useful life of the A320 aircraft family, passing from 30 to 25 years. All in all, the rise in operating expenses1 was the result of an increase of 11.2% in cycles, a 6.5% increase in passenger numbers and a 7.2% growth in total block hours.
As part of the Company’s on-going fuel hedging strategy, by the end of the 4Q 2014, 174 million gallons were hedged. This represents approximately 35% of the total expected volume to be consumed over the next fifteen months. The average price of such hedges was negotiated at $ 2.57/Gallon. As of December 31, 2014, the total hedged amount was covered through jet fuel derivatives. It is worthwhile mentioning that the hedging strategy from a cash risk perspective outweighs options over swaps as oil price volatility remains high.
In accordance with the fleet renovation and modernization plan, between October and December 2014, the company took delivery of one A321, one A319 (both equipped with sharklets), three ATR72, one A330, one A330F and four B787 Dreamliners while phasing-out two Fokker 50. Consequently, Avianca Holdings and its subsidiaries ended the quarter with a consolidated operating fleet of 181 aircrafts.
The company recorded other non-operating income (expense) of $14.0 million for 4Q 2014, compared to a non-operating expense of $37.9 million for the same quarter of 2013. Non-operating expenses include interest expenses related to incremental aircraft debt and additional debt service related to the bond placement carried in the second quarter of 2014. In addition the Company registered a net profit related to the foreign exchange non-cash translation adjustments of $52.0 million compared to $0.72 million expense for the same period of 2013. This effect is primarily due to a gain in foreign exchange translation adjustments, consisting of the net non-cash gain (or loss from) of our monetary assets and liabilities denominated in Colombian Pesos as well as our Venezuelan Bolivar denominated monetary assets subject to the USD exchange rate. During the first twelve months of 2014, the Company recorded other non-operating expenses of $119.0 million, compared to negative $89.7 million for the same period of 2013.
The Company’s cash and cash equivalents and available-for-sale securities, ended the quarter at $640.8 million. Including short-term certificates and bank deposits, adjusted cash and cash equivalents and available-for-sale securities (other current assets) came in at $673.2 million, equivalent to about 14.3 % of revenues for the last twelve months. Of this cash, we have managed to reduce our balance sheet exposure in Bolivars from ~$325.9 million in cash by the end of 2013 to $281.0 million in bank deposits as of Dec 31st 2014.
As of December 31, 2014, the Company’s leverage position (Net Adjusted debt to EBITDAR2) ended at 5.9x. Furthermore, the Company’s total long term debt amounted to $2.7 billion, while total liabilities came in at $4.9 billion dollars.
2015 – OUTLOOK
Avianca Holdings S.A., through its affiliated airlines, will continue to execute cost saving initiatives as well as revenue enhancing projects that are expected to be implemented over the next two years. Moreover, the Company anticipates a robust development of the network as the redeployed capacity matures in 2015. As such, the Company presents its revised guidance for 2015 as follows:
| Outlook Summary | Full Year 2015 | 2015 Revised Guidance | ||
| Total Passengers increase from 2014 | 6.0% - 8.0% | 6.0% - 8.0% | ||
| Capacity (ASK'S) increase from 2014 | 5.0% - 7.0% | 5.0% - 7.0% | ||
| Load Factor | 78% - 80% | 78% - 80% | ||
| EBIT Margin | 6.0% - 8.0% | 8.0% -10.0% |
Analysis by ASKs
| 4Q 2013 | 4Q 2014 | Var% | ||||
| Operating revenue: | ||||||
| Passenger | 10.46 | 9.30 | -11.1% | |||
| Cargo and other | 1.79 | 2.43 | 35.8% | |||
| Total operating revenues | 12.24 | 11.73 | -4.2% | |||
| Operating expenses: | ||||||
| Flight operations | 0.23 | 0.15 | -33.9% | |||
| Aircraft fuel | 3.42 | 2.99 | -12.6% | |||
| Ground operations | 0.91 | 1.00 | 10.2% | |||
| Aircraft rentals | 0.71 | 0.78 | 10.6% | |||
| Passenger services | 0.38 | 0.36 | -6.5% | |||
| Maintenance and repairs | 0.36 | 0.71 | 95.3% | |||
| Air traffic | 0.48 | 0.43 | -10.1% | |||
| Sales and marketing | 1.55 | 1.55 | 0.2% | |||
| General, administrative, and other | 0.67 | 0.52 | -22.6% | |||
| Salaries, wages and benefits | 1.76 | 1.62 | -7.8% | |||
| Depreciation and amortization | 0.62 | 0.54 | -12.7% | |||
| Total operating expense | 11.08 | 10.64 | -3.9% | |||
| Operating income | 1.17 | 1.08 | -7.2% | |||
| Total CASK | 11.08 | 10.64 | -3.9% | |||
| CASK ex. Fuel | 7.66 | 7.66 | 0.0% | |||
| Total CASK Adjusted | 11.08 | 10.61 | -4.2% | |||
| CASK ex. Fuel Adjusted | 7.66 | 7.62 | -0.5% | |||
| Yield | 12.96 | 11.69 | -9.8% |
EBITDAR Calculation excluding special items
| in US$ Millions | 4Q-13 | 4Q-14 | Var % | |||
| Operating Revenues as reported | 1,204.4 | 1,241.3 | ||||
| Operating Expenses | 753.6 | 810.7 | ||||
| Aircraft Fuel | 336.1 | 316.1 | ||||
| Operating Income as reported | 114.7 | 114.5 | -0.2% | |||
| (-) Indemnization of administrative personnel | - | 3.00 | ||||
| (-) Preoperational costs AVH cargo in Brazil | - | - | ||||
| (-) Incremental costs related to the Wetlease | - | 0.86 | ||||
| Operating Income adjusted | 114.7 | 118.4 | 3.2% | |||
| (+) Depreciation and amortization | 61.3 | 57.6 | ||||
| EBITDA Adjusted | 176.0 | 176.0 | 0.0% | |||
| Margin | 14.6% | 14.2% | ||||
| (+) Aircraft Rentals | 69.7 | 82.1 | ||||
| EBITDAR Adjusted | 245.8 | 258.1 | 5.0% | |||
| Margin | 20.4% | 20.8% |
Non IFRS financial measure reconciliation
|
Reconciliation of Net Income excluding Special Items |
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| In USD$ Millions | 4Q-13 | 4Q-14 | Var % | |||
| Net Income as Reported | 65.44 | 96.99 | 48.2% | |||
| Special items (adjustments): | ||||||
| (-) Indemnization of Administrative Personnel | - | 3.00 | ||||
| (-) Incremental costs related to the Wetlease | - | 0.86 | ||||
| (-) Derivative Instruments | (2.2) | 1.38 | ||||
| (-) Foreign exchange gain (loss) | (0.7) | 52.06 | ||||
| Net Income Adjusted | 68.4 | 47.4 | -30.7% | |||
|
Reconciliation of Operating Cost per ASK excluding special items |
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| in US$ cents | 4Q-13 | 4Q-14 | Var % | |||
| Total CASK as reported | 11.08 | 10.64 | -3.9% | |||
| Aircraft Fuel | 3.42 | 2.99 | ||||
| Total CASK excluding Fuel as reported | 7.66 | 7.66 | 0.0% | |||
| (-) Indemnization of Administrative Personnel | - | (0.03) | ||||
| (-) Incremental costs related to the Wetlease | - | (0.01) | ||||
| Total CASK excluding Fuel and special items | 7.66 | 7.62 | -0.5% | |||
Interim Condensed Consolidated Statement of Comprehensive Income for the twelve month period ended December 31st 2013 and 2014 (Unaudited in USD)
|
For the Year Ended December 31st |
2014 | 2013 | ||
| Operating revenue: | ||||
| Passenger | 3,867,863 | 3,862,397 | ||
| Cargo and other | 834,168 | 747,207 | ||
| Total operating revenues | 4,702,031 | 4,609,604 | ||
| Operating expenses: | ||||
| Flight operations | 56,695 | 82,872 | ||
| Aircraft fuel | 1,345,755 | 1,325,763 | ||
| Ground operations | 399,061 | 343,812 | ||
| Aircraft rentals | 299,220 | 273,643 | ||
| Passenger services | 154,445 | 143,512 | ||
| Maintenance and repairs | 265,894 | 188,659 | ||
| Air traffic | 206,859 | 180,140 | ||
| Sales and marketing | 602,210 | 584,468 | ||
| General, administrative, and other | 165,396 | 257,273 | ||
| Salaries, wages and benefits | 722,011 | 674,951 | ||
| Depreciation, amortization and impairment | 199,900 | 169,580 | ||
| Total operating expense | 4,417,446 | 4,224,673 | ||
| Operating profit | 284,585 | 384,931 | ||
| Other non-operating income (expense): | ||||
| Interest expense | (134,289) | (113,330) | ||
| Interest income | 15,436 | 11,565 | ||
| Derivative instruments | 5,924 | (11,402) | ||
| Foreign exchange | (6,043) | 23,517 | ||
| Profit before income tax | 165,613 | 295,281 | ||
| Income tax expense- current | (33,465) | (40,296) | ||
| Income tax expense- deferred | (11,669) | (6,164) | ||
| Total income tax expense | (45,134) | (46,460) | ||
| Net profit | 120,479 | 248,821 |
Interim Condensed Consolidated Statement of Financial Position (Unaudited in USD)
| Notes |
As of |
As of |
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| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | 7 | $ | 639,310 | $ | 735,577 | ||
| Restricted cash | 7 | 1,987 | 23,538 | ||||
| Available-for-sale securities | 6 | 1,218 | — | ||||
| Accounts receivable, net of provision for doubtful accounts | 8 | 356,060 |
276,963 |
||||
| Accounts receivable from related parties | 9 | 28,997 | 26,425 | ||||
| Expendable spare parts and supplies, net of provision for obsolescence | 10 | 64,844 |
53,158 |
||||
| Prepaid expenses | 11 | 60,453 | 46,745 | ||||
| Assets held for sale | 12 | 1,369 | 7,448 | ||||
| Deposits and other assets | 13 | 168,994 | 125,334 | ||||
| Total current assets | 1,323,232 | 1,295,188 | |||||
| Non-current assets: | |||||||
| Available-for-sale securities | 6 | 237 | 14,878 | ||||
| Deposits and other assets | 13 | 216,763 | 189,176 | ||||
| Accounts receivable, net of provision for doubtful accounts | 8 | 41,090 | 32,441 | ||||
| Accounts receivable from related parties | 9 | 8,437 | — | ||||
| Intangible assets | 15 | 425,369 | 363,103 | ||||
| Deferred tax assets | 30 | 39,936 | 50,893 | ||||
| Property and equipment, net | 14 | 4,130,265 | 3,233,358 | ||||
| Total non-current assets | 4,862,097 | 3,883,849 | |||||
| Total assets | $ | 6,185,329 | $ | 5,179,037 | |||
| Notes |
As of |
As of |
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| Liabilities and equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | 17 | $ | 459,059 | $ | 314,165 | |||
| Accounts payable | 18 | 528,356 | 509,129 | |||||
| Accounts payable to related parties | 9 | 18,552 | 7,553 | |||||
| Accrued expenses | 19 | 176,087 | 134,938 | |||||
| Provisions for legal claims | 31 | 14,157 | 14,984 | |||||
| Provisions for return conditions | 20 | 61,425 | 33,033 | |||||
| Employee benefits | 21 | 48,699 | 52,392 | |||||
| Air traffic liability | 22 | 455,527 | 564,605 | |||||
| Other liabilities | 127,496 | 27,432 | ||||||
| Total current liabilities | 1,889,358 | 1,658,231 | ||||||
| Non-current liabilities: | ||||||||
| Long-term debt | 17 | 2,712,931 | 1,951,330 | |||||
| Accounts payable | 18 | 22,610 | 2,735 | |||||
| Provisions for return conditions | 20 | 72,587 | 56,065 | |||||
| Employee benefits | 21 | 170,177 | 276,284 | |||||
| Deferred tax liabilities | 30 | 15,760 | 7,940 | |||||
| Air traffic liability | 22 | 85,934 | − | |||||
| Other liabilities non-current | 8,467 | 11,706 | ||||||
| Total non-current liabilities | 3,088,466 | 2,306,060 | ||||||
| Total liabilities | 4,977,824 | 3,964,291 | ||||||
| Equity: | 24 | |||||||
| Common stock | 82,600 | 83,225 | ||||||
| Preferred stock | 42,023 | 41,398 | ||||||
| Additional paid-in capital on common stock | 234,567 | 236,342 | ||||||
| Additional paid-in capital on preferred stock | 469,273 | 467,498 | ||||||
| Retained earnings | 346,923 | 351,102 | ||||||
| Revaluation and other reserves | 24,550 | 28,857 | ||||||
| Total equity attributable to the Company | 1,199,936 | 1,208,422 | ||||||
| Non-controlling interest | 7,569 | 6,324 | ||||||
| Total equity | 1,207,505 | 1,214,746 | ||||||
| Total liabilities and equity | $ | 6,185,329 | $ | 5,179,037 | ||||
Notes with regard to the statement of future expectations
This report contains statements of future expectations.
These may include words such as “expect”, “estimate”, “anticipate” “forecast”, “plan”, “believe” and similar expressions. These statements and the statements regarding the Company’s beliefs and expectations do not represent historical facts and are based on current plans, projections, estimates, forecasts and therefore you should not place undue reliance on them. Statements regarding future expectations involve certain risks and uncertainties. Forward-looking statements involve inherent known and unknown risks, uncertainties and other factors, many of which are outside of the Company’s control and difficult to predict. Avianca Holdings S.A. warns that a significant number of factors may cause the actual results to be materially different from those contained in any statement with regard to future expectations. Statements of this kind refer only to the date on which they are made, and the Company does not take responsibility for publicly updating any of them due to the occurrence of future or other events.
Glossary of Operating Performance Terms
This report contains terms relating to operating performance that are commonly used in the airline industry and are defined as follows:
A
Aircraft utilization represents the average number of block hours operated per day per aircraft for an aircraft fleet.
ASK Available Seat Kilometers, represents aircraft seating capacity multiplied by the number of kilometers the seats are flown.
ATK Available Ton Kilometers.
B
Block Hours refers to the elapsed time between an aircraft leaving an airport gate and arriving at an airport gate.
C
CASK Cost per available seat kilometer represents operating expenses divided by available seat kilometers (ASKs).
Code Share
Agreement Refers to our code share agreements with other airlines with whom we have business arrangements to share the same flight. A seat can be purchased on one airline but is actually operated by a cooperating airline under a different flight number or code. The term “code” refers to the identifier used in flight schedules, generally the two-character IATA airline designator code and flight number. Code share alliances allow greater access to cities through a given airline’s network without having to offer extra flights, and makes connections simpler by allowing single bookings across multiple planes.
CASK ex-fuel, represents operating expenses other than fuel divided by available seat kilometers (ASKs).
L
Load Factor represents the percentage of aircraft seating capacity that is actually utilized and is calculated by dividing revenue passenger kilometers by available seat kilometers (ASKs).
R
RASK Operating revenue per available seat kilometer, represents operating revenue divided by available seat kilometers (ASKs).
RPK Revenue passenger kilometers, represent the number of kilometers flown by revenue passengers.
Revenue passengers represents the total number of paying passengers (which do not include passengers redeeming LifeMiles (previously known as AviancaPlus or Distancia) frequent flyer miles or other travel awards) flown on all flight segments (with each connecting segment being considered a separate flight segment).
RTK Revenue ton kilometers, represents the total cargo tonnage uplifted multiplied by the number of kilometers the cargo is flown.
T
Technical dispatch represents the percentage of scheduled flights that are not delayed at Reliability departure more than 15 minutes or cancelled, in each case due to technical problems.
Y
Yield represents the average amount one passenger pays to fly one kilometer, or passenger revenue divided by revenue passenger kilometers (RPKs).
Fourth Quarter 2014 Earnings Results Conference
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The Company has reported the 4Q 2014 numbers to the Colombian Financial Banking Superintendence (Superintendencia Financiera de Colombia) and the SEC on February 27th after market close
For further information please contact the Investor Relations Office at:
1When indicated during for the 4Q of 2014 the total operating costs exclude incremental costs of ~$860,000 in rent payments (Wet Lease) associated to the delay in the delivery of the B787 Dreamliner’s as well as onetime expenses of ~$ 3.0 million associated to the head count optimization project. In addition to the latter the full year figures also exclude the ~$4.6 million related to one-time expenses incurred over the 1Q of 2014 associated to the grounding of the F50 fleet.
2Net Adjusted Debt to EBITDAR: (Current Portion of Long Term debt + Long Term Debt + (Annual Rents Expense x 7) – Cash*) / EBITDAR
*Cash: Cash and cash equivalents + Restricted Cash + Available for sale securities + Short Term Certificates of bank deposits + Long Term Restricted Cash