Chorus Aviation has a good quarter
Chorus Aviation reported it's first quarter earnings for 2014 on May 15.It had EBITDA of $47 million, up 38% from Q1 2013.Also it had adjusted net income of $20 million or $.17 per share or up $.05 per share from Q1 2013.On an annual basis this makes earnings per share of almost $.75.In addition,Chorus is going to change it's dividend from a quarterly payment to a monthly basis.Chorus is starting to get a little more room to raise it's dividend back to what it used to be,that is, $.60 per share.But it is a little early to make that call yet.
Operating revenue decreased slightly but operating expenses decreased by 3 % or $12 million.This would indicate only a minor increase in operating income but it actually increased by 50% to $31 million.It also produced a positive cash flow of $45 million. $20 million of which will be used to redeem the remaining balance of their convertible debenture series.Chorus does not want to dilute earnings of their shareholders.In addition, Chorus wants to buy up to 10% of their outstanding shares.This may help to pull up their share price put together with the results from this quarter.
Non-operating income
Chorus is in a competitive environment and has fairly tight restraints on it's revenues.It also has a Capacity Purchase Agreement with Air Canada.This agreement sets it's rates and determines it's routes to a large extent.However it appears to have some freedom in setting secondary routes(from a regulated centre to a non-regulated centre).So Chorus may have some room to add to it's revenues on non-regulated venues.Whether this would be profitable is not clear but it is likely the return would be lower than on a regulated route.This is a way of increasing operating revenues but it might have little increase for operating income.
Chorus reports that EBITDA(in this quarter) increased by $13.1 million while operating income increased by $10.4 million.So $2.7 million of the increase in EBITDA is non operating income.This is an area that Chorus must add to.If revenues are only slowly increasing and new secondary routes are not yet profitable then it must increase it's non-operating income.Chorus gets revenues now from it's maintenance operations in Halifax and it just bought a new maintenance company called Telesys.Hopefully these operations are now or soon profitable.Also Chorus makes some revenue from charters now and with some improvements can make a little more profit here as well.These are areas that Chorus will surely make increases in the coming quarters.However for this quarter $31 million of operating income makes for a very good quarter.
Operating revenue decreased slightly but operating expenses decreased by 3 % or $12 million.This would indicate only a minor increase in operating income but it actually increased by 50% to $31 million.It also produced a positive cash flow of $45 million. $20 million of which will be used to redeem the remaining balance of their convertible debenture series.Chorus does not want to dilute earnings of their shareholders.In addition, Chorus wants to buy up to 10% of their outstanding shares.This may help to pull up their share price put together with the results from this quarter.
Non-operating income
Chorus is in a competitive environment and has fairly tight restraints on it's revenues.It also has a Capacity Purchase Agreement with Air Canada.This agreement sets it's rates and determines it's routes to a large extent.However it appears to have some freedom in setting secondary routes(from a regulated centre to a non-regulated centre).So Chorus may have some room to add to it's revenues on non-regulated venues.Whether this would be profitable is not clear but it is likely the return would be lower than on a regulated route.This is a way of increasing operating revenues but it might have little increase for operating income.
Chorus reports that EBITDA(in this quarter) increased by $13.1 million while operating income increased by $10.4 million.So $2.7 million of the increase in EBITDA is non operating income.This is an area that Chorus must add to.If revenues are only slowly increasing and new secondary routes are not yet profitable then it must increase it's non-operating income.Chorus gets revenues now from it's maintenance operations in Halifax and it just bought a new maintenance company called Telesys.Hopefully these operations are now or soon profitable.Also Chorus makes some revenue from charters now and with some improvements can make a little more profit here as well.These are areas that Chorus will surely make increases in the coming quarters.However for this quarter $31 million of operating income makes for a very good quarter.
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