TORONTO--(BUSINESS WIRE)--Canada Jetlines Operations Ltd. (NEO: CJET) (“Canada Jetlines” or the “Company”) today reported first quarter 2023 interim financial results. All financial figures are in Canadian dollars and in accordance with IFRS as presented in the annual consolidated financial statements.
First Quarter 2023 Interim Financial Results
Total operating revenues for the first quarter 2023 were $5.1 million as compared to $3.2 million in the quarter ended December 31, 2022 (the “Prior Quarter”), an increase of 59%. The Company continues to increase the operations of charters and ACMI (Aircraft, Crew, Maintenance, and Insurance) flights generating revenues of $3.38 million this quarter as compared to $2.4 million in the Prior Quarter, representing an increase of 57%.
Total operating expenses for the first quarter 2023 were $8.15 million as compared to $6.7 million in the Prior Quarter, an increase of 21%. Increases were primarily driven by increased flying activity as a result of higher contract volume and the operation of two aircraft for the entire quarter.
Total assets increased to $28,366,094 from $27,289,573 as at December 31, 2022. The increase in total assets is primarily attributable to an increase in cash from financing activities.
Total liabilities increased to $33,351,536 from $28,948,171 as at December 31, 2022. The increase was made up of the liabilities associated with increase in deferred revenue and increases in accounts payable and accrued liabilities, explained by the timing of payments and invoices received at the end of the period.
Summary of Quarterly Results
|
March 31, 2023 |
December 31, 2022 |
Revenue |
$5,097,249 |
$3,237,680 |
Income (loss) and comprehensive income (loss) |
($3,618,816) |
($4,528,552) |
Earnings (loss) per share (basic and diluted) |
($0.05) |
($0.06) |
Total assets |
$28,336,094 |
$27,289,573 |
Total liabilities |
$33,351,536 |
$28,948,171 |
Management Commentary
Eddy Doyle, CEO and President of Jetlines commented: “We are pleased to report that several key milestones were achieved in Q1 2023, in February 2023 the Company was proud to introduce Las Vegas as its first international scheduled destination, this was followed in March with a new route from Toronto to Cancun, Mexico. Charter flights and ACMI lease contracts continued to grow throughout the first quarter of 2023 and in March the Company announced it was chosen to provide an aircraft and crew for a 5-month ACMI contract beginning at the end of March, 2023.”
Mr. Doyle continued: “In March, Canada Jetlines announced it was in discussion with Qatar Airways for a potential codeshare agreement where Canada Jetlines would provide service between Toronto and Doha, subject to government approval and completing all applicable agreements between the two airlines. This would offer Canadian travelers access to Qatar Airways' unparalleled network via Doha to destinations in the Middle East, Africa, Indian Subcontinent and across Asia. The Company is continuing to work through the Canadian government approval process and definitive documentation with Qatar Airways.”
Mr. Doyle concluded: “Looking forward, Canada Jetlines has recently announced a number of other charter contracts, including with two Canadian football teams. Canada Jetlines 3rd aircraft is expected to be delivered in July 2023 and the Company intends to add up to two additional aircraft to its fleet in 2023 and continue to grow its schedule and Charter/ACMI business.”
Liquidity
The Company ended the first quarter of 2023 with $5.1 million in current assets, an increase of $2 million compared to year end 2022. The increase is mainly due to the increase in cash balances from financing activities.
Current liabilities increased from $8.2 million at the end of the Prior Quarter to $11.8 million in the current quarter, mainly due to an increase of $1.1 million in accounts payable and accrued liabilities. In addition, there is a $2.5 million increase in deferred revenue for cash collected for future flight operations.
Based on the Company’s working capital position, the Company will need to raise additional capital during the next twelve months and beyond to support its business plan. The Company is seeking additional capital in the form of debt, convertible debt or equity in order to further invest in the business and facilitate the continued growth of the fleet, including the acquisition of additional leased aircraft, as well as additional working capital.
This news release should be read in conjunction with Canada Jetlines’ condensed interim consolidated financial statements for the three month period ended March 31, 2023 and Management’s Discussion and Analysis available at www.sedar.com.
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Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" concerning anticipated developments and events that may occur in the future. Forward-looking information contained in this news release includes but is not limited to the Company’s intention to operate as a leisure airline, the details of future ACMI contracts including their duration and the frequency of flights, future charter flights, the number of aircraft the Company intends to operate, the potential agreement with Qatar Airways and business of Canada Jetlines.
In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the receipt of financing to continue airline operations, the accuracy, reliability and success of Jetlines’ business model; the continued compliance with the terms of governmental approvals; Jetlines concluding definitive agreements for additional aircraft; the success of operations by Jetlines; the legislative and regulatory environments of the jurisdictions where Jetlines will carry on business or have operations; the impact of competition and the competitive response to Jetlines’ business strategy; and the availability of aircraft. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks related to, the ability to obtain financing at acceptable terms, the impact of general economic conditions, domestic and international airline industry conditions, the failure of the Company to conclude definitive agreements to acquire additional aircraft, supply chain disruptions causing delays in expected timelines, the impact of the global uncertainty created by COVID-19, future relations with shareholders, volatility of fuel prices, increases in operating costs, terrorism, pandemics, natural disasters, currency fluctuations, interest rates, risks specific to the airline industry, the ability of management to implement Jetlines’ operational strategy, the ability to attract qualified management and staff, labour disputes, regulatory risks, including risks relating to the acquisition of (or compliance with) the necessary licenses from regulatory agencies, and the additional risks identified in the "Risk Factors" section of the Company's reports and filings with applicable Canadian securities regulators. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update any forward-looking information.