Volaris Reports Third Quarter 2019 Results: 17.9% Operating Margin, up 9.7 percentage points year over year
MEXICO CITY, Oct. 25, 2019 /PRNewswire/ -- Volaris* (NYSE: VLRS and BMV: VOLAR), the ultra-low-cost airline serving Mexico, the United States and Central America, today announces its financial results for the third quarter 2019.
The following financial information, unless otherwise indicated, is presented in accordance with the International Financial Reporting Standards (IFRS).
Third Quarter 2019 Highlights
- Total operating revenues were Ps.9,502 million for the third quarter, an increase of 29.9% year over year.
- Total ancillary revenues were Ps.3,030 million for the third quarter, an increase of 36.4% year over year. Total ancillary revenues per passenger for the third quarter reached Ps.539, an increase of 13.6% year over year. Total ancillary revenues represented 31.9% of total operating revenues for the third quarter 2019, increasing 1.5 percentage points with respect to the same period of last year.
- Total operating revenues per available seat mile (TRASM) were Ps.150.3 cents for the third quarter, an increase of 11.4% year over year.
- Operating expenses per available seat mile (CASM) were Ps.123.4 cents for the third quarter, a decrease of 0.3% year over year; with an average economic fuel cost per gallon of Ps.44.9 for the third quarter, an increase of 3.2% year over year.
- Operating expenses excluding fuel, per available seat mile (CASM ex-fuel) reached Ps.77.5 cents for the third quarter, an increase of 2.9% year over year.
- Operating income was Ps.1,703 million for the third quarter, a significant increase compared with the operating income of Ps.601 million for the same period of last year. Operating margin for the third quarter was 17.9%, an improvement in margin of 9.7 percentage points year over year.
- Net income was Ps.713 million (Ps.0.70 per share / US$0.36 per ADS), for a net margin of 7.5% for the third quarter.
- At the close of the third quarter, the Mexican peso depreciated 2.4% against the U.S. dollar with respect to the exchange rate at the close of the previous quarter (Ps.19.17 per US dollar). The Company booked a foreign exchange loss of Ps.173 million derived from our U.S. dollar net monetary liability position, as result of the adoption of IFRS16.
- Net cash flows generated by operating activities were Ps.2,207 million. The net cash flows used in investing activities reached Ps.1,072 million. The net cash flows used in financing activities were Ps.1,606, which included Ps.1,657 million of aircraft rental payments. The positive net foreign exchange difference was Ps.156 million, with net cash used in the third quarter of Ps.314 million. As of September 30, 2019, cash and cash equivalents were Ps.7,810 million.
Stable Macroeconomics and Domestic Consumer Demand, with Peso Depreciation and Fuel Price Pressures
- Stable macroeconomics and domestic consumer demand: The macroeconomic indicators in Mexico during the third quarter were stable, with same store sales[1] increasing 2.4% year over year; remittances[2] increased 15.7% year over year during July and August 2019; and the Mexican Consumer Confidence Balance Indicator (BCC) [3] increased 3.1% in the third quarter year over year.
- Air traffic volume increase: The Mexican Federal Civil Aviation Agency reported an overall passenger volume growth for Mexican carriers of 8.4% year over year during July and August of 2019; the domestic overall passenger volume increased 7.3%, while the international overall passenger volume increased 1.7%.
- Exchange rate volatility: The Mexican peso depreciated 2.3% year over year against the US dollar, from an average exchange rate of Ps.18.98 per US dollar in the third quarter of 2018 to Ps.19.42 per US dollar during the third quarter of 2019. At the end of the third quarter of 2019, the Mexican peso depreciated 4.4% with respect to the exchange rate at the end of the same period of the last year. The Company booked a foreign exchange loss of Ps.173 million derived from our US dollar net monetary liability position, resulting from the adoption of IFRS16.
- Increased fuel prices: The average economic fuel cost per gallon increased 3.2% in the third quarter of 2019, year over year, reaching Ps.44.9 per gallon (US$2.3).
Passenger Traffic Stimulation, Further Ancillary Revenue Expansion, and Positive TRASM Growth
- Passenger traffic stimulation: Volaris booked 5.6 million passengers in the third quarter of 2019, an increase of 20.1% year over year. Volaris traffic (measured in terms of revenue passenger miles, or RPMs) increased 19.3% year over year. System load factor during the third quarter increased 1.6 percentage points year over year, reaching 85.1%.
- Positive TRASM growth: For the third quarter of 2019, TRASM increased 11.4% year over year. During the third quarter of 2019, the total capacity, in terms of ASMs, increased 16.9% year over year.
- Total ancillary revenue growth: For the third quarter of 2019, total ancillary revenue increased 36.4% year over year. Total ancillary revenue per passenger for the third quarter of 2019 increased 13.6% year over year. The total ancillary revenue generation continues to grow with new and mature products, appealing to customers' needs, representing 31.9% of total operating revenue of the third quarter, an increase of 1.5 percentage points year over year.
- New routes: Volaris began operations in two new international routes from El Salvador, San Salvador to Mexico City and Guadalajara, Jalisco, respectively. Additionally, Volaris launched one domestic route from Tapachula, Chiapas to Tijuana, Baja California and one international route from Leon, Guanajuato to Fresno, California.
Total Unit Cost Reduction, Despite Peso Depreciation and Fuel Price Pressures
- CASM and CASM ex-fuel for the third quarter of 2019 reached Ps.123.4 (US$6.4 cents) and Ps.77.5 cents (US$4.0), respectively. This represented a decrease of 0.3% and an increase of 2.9%, respectively, year over year; mainly driven by cost control discipline and the average exchange rate depreciation of 2.3%.
Young and Fuel-efficient Fleet
- During the third quarter of 2019, the Company incorporated two aircraft (A320 neo) to its fleet. As of September 30, 2019, Volaris' fleet was composed of 80 aircraft (8 A319s, 57 A320s and 15 A321s), with an average age of 4.9 years. At the end of the third quarter of 2019, Volaris' fleet had an average of 186 seats, 76% of which were in sharklet-equipped aircraft, and 24% were NEO.
Solid Balance Sheet and Good Liquidity
- Net cash flows generated by operating activities were Ps.2,207 million. The net cash flows used in investing activities reached Ps.1,072 million. The net cash flows used in financing activities were Ps.1,606 million, which included Ps.1,657 million of aircraft rental payments. The positive net foreign exchange difference was Ps.156 million, while the net cash used in the third quarter was Ps.314 million. As of September 30, 2019, cash and cash equivalents were Ps.7,810 million, representing 23.7% of last twelve months of the operating revenue. Volaris registered a negative net debt (or a positive net cash position) of Ps.3,533 million (excluding lease liability recognized under the IFRS16 adoption) and total equity of Ps.4,144 million.
Transition to IFRS 16
- The Company adopted IFRS 16 as of January 1, 2019, using the full retrospective method. The cumulative effect of adopting IFRS 16 has been recognized as an adjustment to the opening balance as of January 1, 2017 as an increase in assets and liabilities and an adjustment in the retained earnings. The full disclosure and the estimated unaudited figures of this initial adoption are included in the Company´s 2018 annual report.
- This quarterly earnings release includes supplemental information for comparable purposes, with recast, estimated unaudited 2018 figures with the IFRS 16 adoption effects. These figures were derived from unaudited financial statements included in the quarterly reports on Form 6-K reported during the year ended as of December 31, 2018.
- Starting on March 25, 2019, the Company established a hedge on its USD denominated revenues, through a non-derivative financial instrument, using the lease liabilities denominated in USD as a hedge instrument. This hedging relationship is designated as a cash flow hedge of forecasted revenues to mitigate the volatility of the foreign exchange variation arising from the revaluation of its lease liabilities. During 2019, the impacts of this hedge for the third quarter and year to date were Ps.29 million and Ps.40 million, respectively; which has been presented as part of the total operating revenue.
- Additionally, on the same date, the Company established a hedge on a portion of its forecasted fuel expense, through a non-derivative financial instrument, using as hedge instrument a portion of its USD denominated monetary assets. This hedging relationship is designated as a cash flow hedge of forecasted fuel expense to mitigate the volatility of the foreign exchange variation arising from the revaluation of this portion of USD denominated monetary asset. During 2019, the impacts of this hedge for the third quarter and year to date were Ps.26 million and Ps.40 million, respectively; which has been presented as part of the total fuel expense.
Investors are urged to carefully read the Company's periodic reports filed with or furnished to the Securities and Exchange Commission, for additional information regarding the Company.
Conference Call/Webcast Details:
Presenters for the Company:
Date: |
Mr. Enrique Beltranena, President & CEO Mr. Holger Blankenstein, Airline EVP Ms. Sonia Jerez Burdeus, VP & CFO Friday, October 25, 2019 |
Time: |
10:00 am U.S. EDT (9:00 am Mexico City Time) |
United States dial in (toll free): |
1-877-830-2576 |
Mexico dial in (toll free): |
001-800-514-6145 |
Brazil dial in (toll free): |
0-800-891-6744 |
International dial in: |
+ 1-785-424-1726 |
Participant passcode: |
VOLARIS (8652747) |
Webcast will be available at: |
https://services.choruscall.com/links/vlrs191025tLO3gSxu.html |
About Volaris:
*Controladora Vuela Compañía de Aviación, S.A.B. de C.V. ("Volaris" or the "Company") (NYSE: VLRS and BMV: VOLAR), is an ultra-low-cost carrier, with point-to-point operations, serving Mexico, the United States and Central America. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. Since the beginning of operations in March 2006, Volaris has increased its routes from five to more than 191 and its fleet from four to 81 aircraft. Volaris offers more than 388 daily flight segments on routes that connect 40 cities in Mexico and 25 cities in the United States and Central America with the youngest fleet in Mexico. Volaris targets passengers who are visiting friends and relatives, cost-conscious business and leisure travelers in Mexico, the United States and Central America. Volaris has received the ESR Award for Social Corporate Responsibility for ten consecutive years. For more information, please visit: www.volaris.com.
Forward-looking Statements:
Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations, beliefs or projections concerning future events and financial trends affecting the financial condition of our business. When used in this release, the words "expects," "intends," "estimates," "predicts," "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "potential," "outlook," "may," "continue," "will," "should," "seeks," "targets" and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe the Company's objectives, plans or goals, or actions the Company may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company's intentions and expectations regarding the delivery schedule of aircraft on order, announced new service routes and customer savings programs. Forward-looking statements should not be read as a guarantee or assurance of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements are subject to a number of factors that could cause the Company's actual results to differ materially from the Company's expectations, including the competitive environment in the airline industry; the Company's ability to keep costs low; changes in fuel costs; the impact of worldwide economic conditions on customer travel behavior; the Company's ability to generate non-ticket revenues; and government regulation. Additional information concerning these, and other factors is contained in the Company's Securities and Exchange Commission filings. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date of this release. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
||||
Financial and Operating Indicators |
||||
Unaudited |
Three months (US Dollars)* |
Three months |
Three months |
Variance (%) |
(In Mexican pesos, except otherwise indicated) |
||||
Total operating revenues (millions) |
484 |
9,502 |
7,316 |
29.9% |
Total operating expenses (millions) |
397 |
7,799 |
6,715 |
16.1% |
EBIT (millions) |
87 |
1,703 |
601 |
>100% |
EBIT margin |
17.9% |
17.9% |
8.2% |
9.7 pp |
Depreciation and amortization |
69 |
1,363 |
1,162 |
17.3% |
Aircraft and engine rent expense |
12 |
226 |
214 |
5.5% |
Net income (millions) |
36 |
713 |
1,105 |
(35.5%) |
Net income margin |
7.5% |
7.5% |
15.1% |
(7.6) pp |
Income per share: |
||||
Basic (pesos) |
0.04 |
0.70 |
1.09 |
(35.5%) |
Diluted (pesos) |
0.04 |
0.70 |
1.09 |
(35.5%) |
Income per ADS: |
||||
Basic (pesos) |
0.36 |
7.05 |
10.92 |
(35.5%) |
Diluted (pesos) |
0.36 |
7.05 |
10.92 |
(35.5%) |
Weighted average shares outstanding: |
||||
Basic |
- |
1,011,876,677 |
1,011,876,677 |
0.0% |
Diluted |
- |
1,011,876,677 |
1,011,876,677 |
0.0% |
Available seat miles (ASMs) (millions) (1) |
- |
6,341 |
5,422 |
16.9% |
Domestic |
- |
4,328 |
3,752 |
15.3% |
International |
- |
2,014 |
1,670 |
20.6% |
Revenue passenger miles (RPMs) (millions) (1) |
- |
5,398 |
4,526 |
19.3% |
Domestic |
- |
3,785 |
3,230 |
17.2% |
International |
- |
1,613 |
1,295 |
24.5% |
Load factor (2) |
- |
85.1% |
83.5% |
1.6 pp |
Domestic |
- |
87.5% |
86.1% |
1.4 pp |
International |
- |
80.1% |
77.6% |
2.5 pp |
Total operating revenue per ASM (TRASM) (cents) (1) (5) |
7.7 |
150.3 |
134.9 |
11.4% |
Total ancillary revenue per passenger (4) (5) |
27.4 |
539 |
474 |
13.6% |
Total operating revenue per passenger (5) |
86.4 |
1,696 |
1,563 |
8.5% |
Operating expenses per ASM (CASM) (cents) (1) (5) |
6.3 |
123.4 |
123.8 |
(0.3%) |
Operating expenses per ASM (CASM) (US cents) (3) (5) |
- |
6.4 |
6.5 |
(2.6%) |
CASM ex fuel (cents) (1) (5) |
3.9 |
77.5 |
75.3 |
2.9% |
CASM ex fuel (US cents) (3) (5) |
- |
4.0 |
4.0 |
0.6% |
Booked passengers (thousands) (1) |
- |
5,620 |
4,680 |
20.1% |
Departures (1) |
- |
35,777 |
30,391 |
17.7% |
Block hours (1) |
- |
90,323 |
82,977 |
8.9% |
Fuel gallons consumed (millions) |
- |
64.9 |
60.5 |
7.2% |
Average economic fuel cost per gallon (5) |
2.3 |
44.9 |
43.5 |
3.2% |
Aircraft at end of period |
- |
80 |
73 |
9.6% |
Average aircraft utilization (block hours) |
- |
13.2 |
13.1 |
0.6% |
Average exchange rate |
- |
19.42 |
18.98 |
2.3% |
End of period exchange rate |
- |
19.64 |
18.81 |
4.4% |
*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only (1) Includes schedule and charter (3) Dollar amounts were converted at average exchange rate of each period |
||||
(2) Includes schedule (4) Includes "Other passenger revenues" and "Non-passenger revenues" (5) Excludes non-derivatives financial instruments |
||||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
||||
Financial and Operating Indicators |
||||
Unaudited |
Nine months |
Nine months |
Nine months |
Variance |
(In Mexican pesos, except otherwise indicated) |
(US Dollars)* |
(%) |
||
Total operating revenues (millions) |
1,274 |
25,023 |
19,396 |
29.0% |
Total operating expenses (millions) |
1,153 |
22,635 |
19,503 |
16.1% |
EBIT (millions) |
122 |
2,388 |
(106) |
NA |
EBIT margin |
9.5% |
9.5% |
(0.5%) |
10.0 pp |
Depreciation and amortization |
203 |
3,990 |
3,368 |
18.5% |
Aircraft and engine rent expense |
39 |
769 |
636 |
20.9% |
Net income (loss) (millions) |
69 |
1,352 |
(200) |
NA |
Net income (loss) margin |
5.4% |
5.4% |
(1.0%) |
6.4 pp |
Income (loss) per share: |
||||
Basic (pesos) |
0.07 |
1.34 |
(0.20) |
NA |
Diluted (pesos) |
0.07 |
1.34 |
(0.20) |
NA |
Income (loss) per ADS: |
||||
Basic (pesos) |
0.68 |
13.36 |
(1.97) |
NA |
Diluted (pesos) |
0.68 |
13.36 |
(1.97) |
NA |
Weighted average shares outstanding: |
||||
Basic |
- |
1,011,876,677 |
1,011,876,677 |
0.0% |
Diluted |
- |
1,011,876,677 |
1,011,876,677 |
0.0% |
Available seat miles (ASMs) (millions) (1) |
- |
18,199 |
15,538 |
17.1% |
Domestic |
- |
12,549 |
10,687 |
17.4% |
International |
- |
5,650 |
4,851 |
16.5% |
Revenue passenger miles (RPMs) (millions) (1) |
- |
15,511 |
13,017 |
19.2% |
Domestic |
- |
10,983 |
9,227 |
19.0% |
International |
- |
4,528 |
3,790 |
19.5% |
Load factor (2) |
- |
85.3% |
83.8% |
1.5 pp |
Domestic |
- |
87.5% |
86.3% |
1.2 pp |
International |
- |
80.2% |
78.2% |
2.0 pp |
Total operating revenue per ASM (TRASM) (cents) (1) (5) |
7.0 |
137.7 |
124.8 |
10.3% |
Total ancillary revenue per passenger (4) (5) |
26.7 |
524 |
467 |
12.0% |
Total operating revenue per passenger (5) |
78.6 |
1,544 |
1,444 |
6.9% |
Operating expenses per ASM (CASM) (cents) (1) (5) |
6.3 |
124.6 |
125.5 |
(0.7%) |
Operating expenses per ASM (CASM) (US cents) (3) (5) |
- |
6.5 |
6.6 |
(1.8%) |
CASM ex fuel (cents) (1) (5) |
3.9 |
76.8 |
78.9 |
(2.6%) |
CASM ex fuel (US cents) (3) (5) |
- |
4.0 |
4.1 |
(3.7%) |
Booked passengers (thousands) (1) |
- |
16,237 |
13,434 |
20.9% |
Departures (1) |
- |
102,823 |
87,076 |
18.1% |
Block hours (1) |
- |
260,858 |
237,485 |
9.8% |
Fuel gallons consumed (millions) |
- |
186.6 |
168.7 |
10.6% |
Average economic fuel cost per gallon (5) |
2.4 |
46.6 |
43.0 |
8.4% |
Aircraft at end of period |
- |
80 |
73 |
9.6% |
Average aircraft utilization (block hours) |
- |
13.0 |
13.4 |
(3.0%) |
Average exchange rate |
- |
19.26 |
19.04 |
1.1% |
End of period exchange rate |
- |
19.64 |
18.81 |
4.4% |
*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only (1) Includes schedule and charter (3) Dollar amounts were converted at average exchange rate of each period |
||||
(2) Includes schedule (4) Includes "Other passenger revenues" and "Non-passenger revenues" (5) Excludes non-derivatives financial instruments |
||||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
||||
Consolidated Statement of Operations |
||||
Unaudited |
Three months |
Three months ended September |
Three months |
Variance |
(In millions of Mexican pesos) |
(US Dollars) * |
(%) |
||
Operating revenues: |
||||
Passenger revenues |
472 |
9,271 |
7,137 |
29.9% |
Fare revenues |
331 |
6,501 |
5,096 |
27.6% |
Other passenger revenues (1) |
141 |
2,770 |
2,042 |
35.7% |
Non-passenger revenues |
13 |
260 |
179 |
45.2% |
Other non-passenger revenues (1) |
11 |
208 |
124 |
68.1% |
Cargo |
3 |
51 |
55 |
(6.6%) |
Non-derivatives financial instruments |
(1) |
(29) |
- |
NA |
Total operating revenues |
484 |
9,502 |
7,316 |
29.9% |
Other operating income |
(7) |
(141) |
(243) |
(42.1%) |
Total fuel expense, net (2) |
147 |
2,884 |
2,631 |
9.6% |
Depreciation and amortization |
69 |
1,363 |
1,162 |
17.3% |
Landing, take-off and navigation expenses |
66 |
1,304 |
1,148 |
13.6% |
Salaries and benefits |
46 |
909 |
834 |
9.0% |
Maintenance expenses |
21 |
406 |
389 |
4.2% |
Sales, marketing and distribution expenses |
21 |
417 |
340 |
22.8% |
Aircraft and engine rent expense |
12 |
226 |
214 |
5.5% |
Other operating expenses |
22 |
432 |
240 |
79.7% |
Operating expenses |
397 |
7,799 |
6,715 |
16.1% |
Operating income |
87 |
1,703 |
601 |
>100% |
Finance income |
4 |
79 |
37 |
>100% |
Finance cost |
(30) |
(591) |
(487) |
21.3% |
Exchange (loss) gain, net |
(9) |
(173) |
1,396 |
NA |
Comprehensive financing result |
(35) |
(684) |
946 |
NA |
Income before income tax |
52 |
1,019 |
1,547 |
(34.2%) |
Income tax expense |
(16) |
(306) |
(442) |
(30.9%) |
Net income |
36 |
713 |
1,105 |
(35.5%) |
* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only (1) 3Q 2018 figures include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.80 million, as result of the IFRS 15 adoption (2) 3Q 2019 figures include a benefit from non-derivatives financial instruments by an amount of Ps.26 million |
||||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
||||
Consolidated Statement of Operations |
||||
Unaudited |
Nine months |
Nine months ended September 30, |
Nine months ended |
Variance |
(In millions of Mexican pesos) |
(US Dollars) * |
(%) |
||
Operating revenues: |
||||
Passenger revenues |
1,237 |
24,286 |
18,737 |
29.6% |
Fare revenues |
843 |
16,562 |
13,118 |
26.3% |
Other passenger revenues (1) |
393 |
7,724 |
5,619 |
37.4% |
Non-passenger revenues |
40 |
778 |
659 |
17.9% |
Other non-passenger revenues (1) |
31 |
613 |
503 |
21.8% |
Cargo |
8 |
165 |
156 |
5.5% |
Non-derivatives financial instruments |
(2) |
(40) |
- |
NA |
Total operating revenues |
1,274 |
25,023 |
19,396 |
29.0% |
Other operating income |
(13) |
(264) |
(475) |
(44.4%) |
Total fuel expense, net (2) |
441 |
8,654 |
7,250 |
19.4% |
Depreciation and amortization |
203 |
3,990 |
3,368 |
18.5% |
Landing, take-off and navigation expenses |
190 |
3,725 |
3,422 |
8.9% |
Salaries and benefits |
135 |
2,648 |
2,330 |
13.6% |
Maintenance expenses |
57 |
1,128 |
1,111 |
1.5% |
Sales, marketing and distribution expenses |
53 |
1,038 |
1,079 |
(3.8%) |
Aircraft and engine rent expense |
39 |
769 |
636 |
20.9% |
Other operating expenses |
48 |
948 |
781 |
21.3% |
Operating expenses |
1,153 |
22,635 |
19,503 |
16.1% |
Operating income (loss) |
122 |
2,388 |
(106) |
NA |
Finance income |
8 |
153 |
108 |
41.1% |
Finance cost |
(81) |
(1,594) |
(1,325) |
20.3% |
Exchange gain, net |
50 |
985 |
1,034 |
(4.7%) |
Comprehensive financing result |
(23) |
(457) |
(183) |
>100% |
Income (loss) before income tax |
98 |
1,931 |
(290) |
NA |
Income tax (expense) benefit |
(30) |
(579) |
90 |
NA |
Net income (loss) |
69 |
1,352 |
(200) |
NA |
* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only (1) September YTD 2018 figures include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.217 million, as result of the IFRS 15 adoption (2) September YTD 2019 figures include a benefit from non-derivatives financial instruments by an amount of Ps.40 million |
||||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
||||
Reconciliation of total ancillary revenue per passenger |
||||
The following table shows quarterly additional detail about the components of total ancillary revenue: |
||||
Unaudited |
Three months (US Dollars)* |
Three months |
Three months |
Variance (%) |
(In millions of Mexican pesos) |
||||
Other passenger revenues (1) |
141 |
2,770 |
2,042 |
35.7% |
Non-passenger revenues (1) |
13 |
260 |
179 |
45.2% |
Total ancillary revenues |
154 |
3,030 |
2,221 |
36.4% |
Booked passengers (thousands) |
- |
5,620 |
4,680 |
20.1% |
Total ancillary revenue per passenger |
27.4 |
539 |
474 |
13.6% |
* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only |
||||
(1) 3Q 2018 figures include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.80 million, as result of the IFRS 15 adoption |
||||
The following table shows the September YTD additional detail about the components of total ancillary revenue: |
||||
Unaudited |
Nine months (US Dollars)* |
Nine months |
Nine months |
Variance (%) |
(In millions of Mexican pesos) |
||||
Other passenger revenues (1) |
393 |
7,724 |
5,619 |
37.4% |
Non-passenger revenues (1) |
40 |
778 |
659 |
17.9% |
Total ancillary revenues |
433 |
8,502 |
6,278 |
35.4% |
Booked passengers (thousands) |
- |
16,237 |
13,434 |
20.9% |
Total ancillary revenue per passenger |
26.7 |
524 |
467 |
12.0% |
* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only |
||||
(1) September YTD 2018 figures include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.217 million, as result of the IFRS 15 adoption |
||||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
|||
Consolidated Statement of Financial Position |
|||
(In millions of Mexican pesos) |
September 30, 2019 |
September 30, 2019 |
December 31, |
(US Dollars)* |
|||
Assets |
|||
Cash and cash equivalents |
398 |
7,810 |
5,863 |
Accounts receivable |
115 |
2,266 |
1,467 |
Inventories |
15 |
294 |
297 |
Prepaid expenses and other current assets |
28 |
557 |
443 |
Financial instruments |
2 |
32 |
62 |
Guarantee deposits |
40 |
781 |
791 |
Total current assets |
598 |
11,739 |
8,923 |
Rotable spare parts, furniture and equipment, net |
347 |
6,816 |
5,782 |
Right of use assets |
1,679 |
32,965 |
31,986 |
Intangible assets, net |
8 |
162 |
179 |
Financial instruments |
- |
4 |
- |
Deferred income taxes |
156 |
3,064 |
2,864 |
Guarantee deposits |
349 |
6,852 |
6,337 |
Other assets |
6 |
127 |
155 |
Other accounts receivable |
6 |
123 |
74 |
Total non-current assets |
2,552 |
50,115 |
47,378 |
Total assets |
3,150 |
61,854 |
56,301 |
Liabilities |
|||
Unearned transportation revenue |
184 |
3,614 |
2,439 |
Accounts payable |
50 |
980 |
1,103 |
Accrued liabilities |
146 |
2,858 |
2,318 |
Lease liabilities |
240 |
4,712 |
4,970 |
Other taxes and fees payable |
121 |
2,373 |
1,932 |
Income taxes payable |
- |
1 |
4 |
Financial instruments |
- |
- |
123 |
Financial debt |
87 |
1,709 |
1,212 |
Other liabilities |
16 |
316 |
26 |
Total short-term liabilities |
843 |
16,563 |
14,127 |
Financial debt |
131 |
2,568 |
2,311 |
Accrued liabilities |
7 |
138 |
137 |
Lease liabilities |
1,839 |
36,119 |
34,586 |
Other liabilities |
20 |
398 |
328 |
Employee benefits |
1 |
22 |
18 |
Deferred income taxes |
97 |
1,902 |
1,096 |
Total long-term liabilities |
2,095 |
41,147 |
38,476 |
Total liabilities |
2,939 |
57,710 |
52,603 |
Equity |
|||
Capital stock |
151 |
2,974 |
2,974 |
Treasury shares |
(7) |
(141) |
(123) |
Contributions for future capital increases |
- |
- |
- |
Legal reserve |
15 |
291 |
291 |
Additional paid-in capital |
92 |
1,815 |
1,837 |
Retained earnings |
7 |
143 |
(1,208) |
Accumulated other comprehensive losses (1) |
(48) |
(938) |
(73) |
Total equity |
211 |
4,144 |
3,698 |
Total liabilities and equity |
3,150 |
61,854 |
56,301 |
Total shares outstanding fully diluted |
1,011,876,677 |
1,011,876,677 |
|
* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only |
|||
(1) As of September 30, 2019, the figures include a negative foreign exchange effect of Ps.934 million related to non-derivatives financial instruments |
|||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
|||
Consolidated Statement of Cash Flows – Cash Flow Data Summary |
|||
Unaudited |
Three months ended September |
Three months ended September |
Three months |
(In millions of Mexican pesos) |
(US Dollars)* |
||
Net cash flow generated by operating activities |
112 |
2,207 |
1,263 |
Net cash flow (used in) generated by investing activities |
(55) |
(1,072) |
20 |
Net cash flow used in financing activities** |
(82) |
(1,606) |
(1,646) |
Decrease in cash and cash equivalents |
(24) |
(470) |
(363) |
Net foreign exchange differences |
8 |
156 |
(327) |
Cash and cash equivalents at beginning of period |
414 |
8,124 |
6,771 |
Cash and cash equivalents at end of period |
398 |
7,810 |
6,082 |
* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only |
|||
**Includes aircraft rental payments of Ps.1,657 million and Ps.1,399 million for the three months ended period September 30, 2019 and 2018, respectively |
|||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
||||
Consolidated Statement of Cash Flows – Cash Flow Data Summary |
||||
Unaudited |
Nine months ended September |
Nine months |
Nine months |
|
(In millions of Mexican pesos) |
(US Dollars)* |
|||
Net cash flow generated by operating activities |
380 |
7,465 |
4,580 |
|
Net cash flow used in investing activities |
(65) |
(1,280) |
(641) |
|
Net cash flow used in financing activities** |
(216) |
(4,239) |
(1) |
(4,502) |
Increase (decrease) in cash and cash equivalents |
99 |
1,946 |
(563) |
|
Net foreign exchange differences |
- |
- |
(306) |
|
Cash and cash equivalents at beginning of period |
299 |
5,863 |
6,951 |
|
Cash and cash equivalents at end of period |
398 |
7,810 |
6,082 |
|
* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only **Includes aircraft rental payments of Ps.4,787 million and Ps.4,116 million for the nine months ended period September 30, 2019 and 2018, respectively (1) Includes inflows of Ps.1,500 million related to the issuance of 15,000,000 asset backed trust notes (certificados bursátiles fiduciarios) |
||||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
|||||
The following table shows estimated and adjusted balances after the adoption of IFRS 16 "Leases", on the quarterly statements of operations for each quarter of 2018. These recast amounts were derived from unaudited financial statements included in the quarterly reports on Form 6-K during the year ended December 31, 2018. |
|||||
Unaudited
(In millions of Mexican pesos) |
Three |
Three months |
Three months |
Three months |
Full Year 2018 |
Operating revenues: |
|||||
Passenger revenues |
5,610 |
5,990 |
7,138 |
7,643 |
26,381 |
Fare revenues |
3,886 |
4,137 |
5,096 |
5,370 |
18,488 |
Other passenger revenues (1) |
1,724 |
1,853 |
2,042 |
2,273 |
7,892 |
Non-passenger revenues |
240 |
240 |
179 |
265 |
924 |
Other non-passenger revenues (1) |
192 |
187 |
124 |
194 |
697 |
Cargo |
49 |
53 |
55 |
71 |
227 |
Total operating revenues |
5,850 |
6,230 |
7,317 |
7,908 |
27,305 |
Other operating income |
(1) |
(231) |
(243) |
(147) |
(622) |
Fuel |
2,175 |
2,445 |
2,631 |
2,885 |
10,135 |
Landing, take-off and navigation expenses |
1,124 |
1,149 |
1,149 |
1,157 |
4,579 |
Depreciation and amortization |
1,071 |
1,136 |
1,162 |
1,256 |
4,625 |
Salaries and benefits |
746 |
750 |
834 |
795 |
3,125 |
Sales, marketing and distribution expenses |
357 |
382 |
340 |
422 |
1,501 |
Maintenance expenses |
346 |
376 |
388 |
387 |
1,499 |
Aircraft and engine rent expense |
317 |
105 |
215 |
55 |
692 |
Other operating expenses |
258 |
283 |
239 |
277 |
1,058 |
Operating expenses |
6,395 |
6,395 |
6,715 |
7,087 |
26,592 |
Operating (loss) income |
(545) |
(165) |
602 |
821 |
713 |
Operating margin |
(9.3%) |
(2.6%) |
8.2% |
10.4% |
2.6% |
Finance income |
34 |
37 |
37 |
45 |
153 |
Finance cost |
(395) |
(439) |
(487) |
(478) |
(1,798) |
Exchange gain (loss), net |
1,564 |
(1,926) |
1,395 |
(1,137) |
(106) |
Comprehensive financing result |
1,202 |
(2,328) |
945 |
(1,570) |
(1,751) |
Income (loss) before income tax |
658 |
(2,493) |
1,547 |
(749) |
(1,038) |
Income tax (expense) benefit |
(196) |
728 |
(442) |
187 |
277 |
Net income (loss) |
461 |
(1,765) |
1,105 |
(562) |
(761) |
Earnings (loss) per share: |
|||||
Basic (pesos) |
0.46 |
(1.74) |
1.09 |
(0.56) |
(0.75) |
Diluted (pesos) |
0.46 |
(1.74) |
1.09 |
(0.56) |
(0.75) |
Earnings (loss) per ADS: |
|||||
Basic (pesos) |
4.56 |
(17.44) |
10.92 |
(5.55) |
(7.52) |
Diluted (pesos) |
4.56 |
(17.44) |
10.92 |
(5.55) |
(7.52) |
(1) The annual figures of 2018 include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.271 million, as result of the IFRS 15 adoption |
|||||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
||||||
The following table shows quarterly estimated adjustments made due to the adoption of IFRS 16 "Leases", on the statements of operations for 2018. |
||||||
Unaudited |
Full Year 2018 |
Three months |
Three months |
Three months |
Three months |
Full Year 2018 |
(In millions of Mexican pesos) |
||||||
Operating revenues: |
||||||
Passenger revenues |
26,381 |
- |
- |
- |
- |
26,381 |
Fare revenues |
18,488 |
- |
- |
- |
- |
18,488 |
Other passenger revenues (1) |
7,892 |
- |
- |
- |
- |
7,892 |
Non-passenger revenues |
924 |
- |
- |
- |
- |
924 |
Other non-passenger revenues (1) |
227 |
- |
- |
- |
- |
227 |
Cargo |
697 |
- |
- |
- |
- |
697 |
Total operating revenues |
27,305 |
- |
- |
- |
- |
27,305 |
Other operating income |
(622) |
- |
- |
- |
- |
(622) |
Fuel |
10,135 |
- |
- |
- |
- |
10,135 |
Aircraft and engine rent expense |
6,315 |
(1,278) |
(1,400) |
(1,378) |
(1,567) |
692 |
Landing, take-off and navigation expenses |
4,583 |
(1) |
(1) |
(1) |
(1) |
4,579 |
Salaries and benefits |
3,125 |
- |
- |
- |
- |
3,125 |
Maintenance expenses |
1,518 |
(4) |
(5) |
(5) |
(5) |
1,499 |
Sales, marketing and distribution expenses |
1,501 |
- |
- |
- |
- |
1,501 |
Other operating expenses |
1,130 |
(17) |
(18) |
(18) |
(19) |
1,058 |
Depreciation and amortization |
501 |
939 |
1,012 |
1,047 |
1,126 |
4,625 |
Operating expenses |
28,186 |
(361) |
(412) |
(355) |
(466) |
26,592 |
Operating (loss) income |
(881) |
361 |
412 |
355 |
466 |
713 |
Operating margin |
(3.2%) |
2.6% |
||||
Finance income |
153 |
- |
- |
- |
- |
153 |
Finance cost |
(120) |
(361) |
(408) |
(423) |
(486) |
(1,798) |
Exchange (loss) gain, net |
(72) |
2,255 |
(2,581) |
1,814 |
(1,521) |
(106) |
Comprehensive financing result |
(40) |
1,894 |
(2,989) |
1,391 |
(2,007) |
(1,751) |
(Loss) income before income tax |
(921) |
2,255 |
(2,577) |
1,746 |
(1,541) |
(1,038) |
Income tax benefit (expense) |
238 |
(676) |
775 |
(523) |
463 |
277 |
Net (loss) income |
(683) |
1,579 |
(1,802) |
1,223 |
(1,078) |
(761) |
Basic (loss) earnings per share |
(0.67) |
1.56 |
(1.78) |
1.21 |
(1.07) |
(0.75) |
Diluted (loss) earnings per share |
(0.67) |
1.56 |
(1.78) |
1.21 |
(1.07) |
(0.75) |
(1) The annual figures of 2018 include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.271 million, as result of the IFRS 15 adoption |
||||||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
|||||
The following table shows unaudited balances before the adoption of IFRS 16 "Leases", on the quarterly statements of operations for each quarter of 2018. |
|||||
Unaudited
(In millions of Mexican pesos) |
Three (Reported) |
Three (Reported) |
Three (Reported) |
Three (Reported) |
Full Year (Reported) |
Operating revenues: |
|||||
Passenger revenues |
5,610 |
5,990 |
7,138 |
7,643 |
26,381 |
Fare revenues |
3,886 |
4,137 |
5,096 |
5,370 |
18,489 |
Other passenger revenues (1) |
1,724 |
1,853 |
2,042 |
2,273 |
7,892 |
Non-passenger revenues |
240 |
240 |
179 |
265 |
924 |
Other non-passenger revenues (1) |
192 |
187 |
124 |
194 |
697 |
Cargo |
49 |
53 |
55 |
71 |
227 |
Total operating revenues |
5,850 |
6,230 |
7,316 |
7,909 |
27,305 |
Other operating income |
(1) |
(231) |
(243) |
(147) |
(622) |
Fuel |
2,175 |
2,445 |
2,631 |
2,885 |
10,135 |
Aircraft and engine rent expense |
1,596 |
1,504 |
1,593 |
1,622 |
6,315 |
Landing, take-off and navigation expenses |
1,125 |
1,150 |
1,150 |
1,158 |
4,583 |
Salaries and benefits |
746 |
750 |
834 |
795 |
3,125 |
Sales, marketing and distribution expenses |
357 |
382 |
340 |
422 |
1,501 |
Maintenance expenses |
351 |
381 |
393 |
392 |
1,518 |
Other operating expenses |
274 |
301 |
257 |
297 |
1,130 |
Depreciation and amortization |
132 |
124 |
115 |
130 |
501 |
Operating expenses |
6,757 |
6,805 |
7,070 |
7,554 |
28,186 |
Operating (loss) income |
(906) |
(575) |
246 |
355 |
(881) |
Operating margin |
(15.5%) |
(9.2%) |
3.4% |
4.5% |
(3.2%) |
Finance income |
34 |
37 |
37 |
45 |
153 |
Finance cost |
(34) |
(31) |
(64) |
8 |
(120) |
Exchange (loss) gain, net |
(691) |
653 |
(419) |
384 |
(73) |
Comprehensive financing result |
(691) |
660 |
(446) |
437 |
(40) |
(Loss) income before income tax |
(1,597) |
85 |
(200) |
792 |
(921) |
Income tax benefit (expense) |
479 |
(47) |
81 |
(276) |
238 |
Net (loss) income |
(1,118) |
38 |
(119) |
516 |
(683) |
(Loss) earnings per share: |
|||||
Basic (pesos) |
(1.10) |
0.04 |
(0.12) |
0.51 |
(0.67) |
Diluted (pesos) |
(1.10) |
0.04 |
(0.12) |
0.51 |
(0.67) |
(Loss) earnings per ADS: |
|||||
Basic (pesos) |
(11.05) |
0.38 |
(1.18) |
5.10 |
(6.75) |
Diluted (pesos) |
(11.05) |
0.38 |
(1.18) |
5.10 |
(6.75) |
(1) The annual figures of 2018 include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.271 million, as result of the IFRS 15 adoption |
|||||
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
|||
Consolidated Statement of Financial Position |
|||
The following table shows estimated annual adjustments made due to the adoption of IFRS 16 "Leases", on the Consolidated Statement of Financial Position as of December 31, 2018. |
|||
Unaudited
(In millions of Mexican pesos) |
December 31, 2018 (Reported) |
IFRS 16 Adjustments |
December 31, 2018 |
Assets |
|||
Cash and cash equivalents |
5,863 |
- |
5,863 |
Accounts receivable |
1,467 |
- |
1,467 |
Inventories |
297 |
- |
297 |
Prepaid expenses and other current assets |
710 |
(267) |
443 |
Financial instruments |
62 |
- |
62 |
Guarantee deposits |
791 |
- |
791 |
Total current assets |
9,190 |
(267) |
8,923 |
Rotable spare parts, furniture and equipment, net |
5,782 |
- |
5,782 |
Right of use assets |
- |
31,986 |
31,986 |
Intangible assets, net |
179 |
- |
179 |
Deferred income taxes |
593 |
2,271 |
2,864 |
Guarantee deposits |
6,337 |
- |
6,337 |
Other assets |
155 |
- |
155 |
Other accounts receivable |
74 |
- |
74 |
Total non-current assets |
13,121 |
34,257 |
47,378 |
Total assets |
22,311 |
33,990 |
56,301 |
Liabilities |
|||
Unearned transportation revenue |
2,439 |
- |
2,439 |
Accounts payable |
1,103 |
- |
1,103 |
Accrued liabilities |
2,318 |
- |
2,318 |
Lease liabilities |
- |
4,970 |
4,970 |
Other taxes and fees payable |
1,932 |
- |
1,932 |
Income taxes payable |
4 |
- |
4 |
Financial instruments |
123 |
- |
123 |
Financial debt |
1,212 |
- |
1,212 |
Other liabilities |
118 |
(92) |
26 |
Total short-term liabilities |
9,249 |
4,878 |
14,127 |
Financial debt |
2,311 |
- |
2,311 |
Accrued liabilities |
137 |
- |
137 |
Lease liabilities |
- |
34,586 |
34,586 |
Other liabilities |
328 |
- |
328 |
Employee benefits |
18 |
- |
18 |
Deferred income taxes |
1,096 |
- |
1,096 |
Total long-term liabilities |
3,890 |
34,586 |
38,476 |
Total liabilities |
13,139 |
39,464 |
52,603 |
Equity |
|||
Capital stock |
2,974 |
- |
2,974 |
Treasury shares |
(123) |
- |
(123) |
Contributions for future capital increases |
- |
- |
- |
Legal reserve |
291 |
- |
291 |
Additional paid-in capital |
1,837 |
- |
1,837 |
Retained earnings |
4,266 |
(5,474) |
(1,208) |
Accumulated other comprehensive losses |
(73) |
- |
(73) |
Total equity |
9,172 |
(5,474) |
3,698 |
Total liabilities and equity |
22,311 |
33,990 |
56,301 |
Total shares outstanding fully diluted |
1,011,876,677 |
1,011,876,677 |
|
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries |
|||
Consolidated Statement of Cash Flows – Cash Flow Data Summary |
|||
The following table shows third quarter estimated adjustments made due to the adoption of IFRS 16 "Leases", on the Consolidated Statement of Cash Flow for the three months ended September 30, 2018. |
|||
Unaudited |
Adjustments |
Three months |
|
(In millions of Mexican pesos) |
Three months (Reported) |
||
Net cash flow (used in) generated by operating activities |
(136) |
1,399 |
1,263 |
Net cash flow generated by investing activities |
20 |
- |
20 |
Net cash flow used in financing activities |
(247) |
(1,399) |
(1,646) |
Decrease in cash and cash equivalents |
(363) |
- |
(363) |
Net foreign exchange differences |
(327) |
- |
(327) |
Cash and cash equivalents at beginning of period |
6,771 |
- |
6,771 |
Cash and cash equivalents at end of period |
6,082 |
- |
6,082 |
The following table shows the YTD September 2018 estimated adjustments made due to the adoption of IFRS 16 "Leases", on the Consolidated Statement of Cash Flow for the nine months ended September 30, 2018. |
|||
Unaudited |
Adjustments |
Nine months |
|
(In millions of Mexican pesos) |
Nine months ended (Reported) |
||
Net cash flow generated by operating activities |
464 |
4,116 |
4,580 |
Net cash flow used in investing activities |
(641) |
- |
(641) |
Net cash flow used in financing activities |
(386) |
(4,116) |
(4,502) |
Decrease in cash and cash equivalents |
(563) |
- |
(563) |
Net foreign exchange differences |
(306) |
- |
(306) |
Cash and cash equivalents at beginning of period |
6,951 |
- |
6,951 |
Cash and cash equivalents at end of period |
6,082 |
- |
6,082 |
[1] |
Source: Asociación Nacional de Tiendas de Autoservicio y Departamentales, A. C. (ANTAD) |
||
[2] |
Source: Banco de México (BANXICO) |
||
[3] |
Source: Instituto Nacional de Estadística y Geografía (INEGI) |
||
SOURCE Volaris
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