Tiger Airways profit before tax nearly tripled to $57mn
Profitable results driven by revenue improvement and cost containment as the group underwent re-allocation of capacity in current financial year to capitalize on robust Asian economy.
Tiger Airways Holdings Limited (“the Company”) on Thursday announced its results for the financial year ended 31 March 2011.
Profit before tax for the financial year ended 31 March 2011 was $57.0 million, almost tripling the $19.9 million profit recorded for the financial year ended 31 March 2010. The Group recorded a 9.2% profit before tax margin for the financial year. Profit after tax for the year was $39.9 million, an increase of 41.5% versus the prior year. The tax provision of $17.1 million includes an accounting adjustment of $6.5 million relating to a portion of the previously recognised deferred tax asset for Tiger Airways Australia.
Revenue growth of 28.0% to $622.2 million from $486.2 million was ahead of both passenger and seat capacity growth of 22.5% and 21.6% respectively. Cost per Available Seat Kilometre (CASK) excluding fuel and foreign exchange movements reduced by 2.5%. The Group load factor increased to 85.8% for the financial year, according to a Tiger Airways report.
Profit before tax for the quarter ended 31 March 2011 was $10.2 million, a $2.6 million decrease compared to the quarter ended 31 March 2010, as a result of a 32.9% increase in fuel prices and lower revenues due to the weather events that impacted Tiger Australia’s performance in the final quarter of the financial year.
Tony Davis, President and Group CEO, said: “Given the difficult and uncertain trading conditions, the Group’s full year result represents a solid performance. Almost tripling our profit before tax to $57.0 million, more than doubling last year’s PBT margin from 4.1% to 9.2% and achieving a 20.5% return on equity reflects the firm platform we have prudently built over the last seven years.
“Revenue growth of 28.0% was well ahead of passenger and seat capacity growth of 22.5% and 21.6% respectively, and reflects our established revenue management systems. Ancillary revenue grew by 8.8% to $ 21.0 per passenger with new products such as Stripes, boardmefirst, switchmyflight and web check-in continuing to be well received by customers.
“Total operating costs per seat increased 2.8% over the previous financial year to $82.6 as a result of higher fuel costs, whilst controllable costs per seat (total operating costs excluding fuel and foreign exchange movements) decreased 2.0%, reflecting our ongoing efforts in targeting all non-essential costs.
“Total revenue per passenger, including ancillary revenues, increased by 4.5% to $104.3 versus $99.8 in the prior year.
“Tiger Airways Singapore produced a strong financial performance, highlighting the fact that the airline has the right model to take advantage of the solid demand and robust economic environment in Asia. Tiger Airways Singapore will grow its capacity for the first six months of the year by at least 40%.
Tiger Airways Australia experienced a challenging year and as a consequence seat capacity will now be kept in line with the previous year. This strategy will simplify our domestic Australian operations and focus the business on profitable routes to generate improved returns from our Australian business.
“Looking ahead, we are well placed to continue to expand and evolve our existing businesses, to develop our partnership with South East Asian Airlines in the Philippines, to progress with the establishment Thai Tiger Airways in Thailand, and to commence work with respect to our proposed investment in Mandala Airlines of Indonesia – a planned investment that we announced today,” said Mr. Davis.
Outlook Statement from the Company
Given the growth opportunities in Asia and our ongoing focus to optimise Group profitability, Tiger Airways Singapore has increased its Northern Summer 2011 seat capacity by 41% year-on-year. As part of a strategic network review, Tiger Airways Australia will maintain seat capacity at last year’s level.
Forward load factors continue to track broadly in line with the recent trend. Whilst fuel price volatility remains a concern, the Group has adopted a number of revenue initiatives to mitigate cost pressures.
The Group is maintaining its plan to grow its fleet to 35 Airbus A320-family aircraft by 31 March 2012, a net increase of nine aircraft from the 26 Airbus A320-family aircraft in its fleet as at 31 March 2011.