Chorus Aviation releases another unorganized report
On August 12,2015 Chorus Aviation released it's second quarter report.It was another (in a series of reports) that is difficult to comprehend.Much of the reporting follows categories that are used in their CPA agreement with Air Canada.Investors are not interested in some of the detail included such as CPA performance bonuses.The report could be shorter and have more detail on the points that investors are interested in.And one area that is not covered in enough detail is the amount of revenue and EBITDA that comes from non-regulated sources.This blog counts revenues that come from the CPA agreement as being regulated.The non-regulated portion regulated category is increasing in size as Chorus successfully completed the acquisition of Voyageur Airways in this quarter.
Operational Statistics
Chorus reports that it's operational revenues were $400 million down from $418 million in 2014 and that included $8 million generated from Voyageur Airways ,their new acquisition.But this revenue is up by $25 million from the first quarter.Adjusted EBITDA was reported to be $52 million.This is a complicated statistic as it includes foreign exchange gains and EBITDA from Voyageur.Surprisingly Chorus includes a depreciation charge of $2.5 million.It would be more conventional if this charge was excluded and EBITDAwould then be $55 million.This is slightly larger than EBITDA for the same quarter in 2014.
Maintenance expenses increased from $42 million to $51 million in the second quarter of 2014and operating expenses were higher than in 2014.Still operating income increased from $34 to $38 million in Q2 2014.And it increased significantly from the $28 million reported in the first quarter.More importantly adjusted net earnings improved to $.20 per share from $.13 per share in the same quarter in 2014.So it is on track to meet $.80 to $.90 per share annually.
Details missed
Some important details were missed but there was good coverage of many important items.For example,there was good coverage of their new acquisition Voyageur Airways which is starting off successfully.But there was no coverage of what was a main item in other quarterly reports,that is, their maintenance operation.They were supposed to have moved all maintenance activities to Halifax and improved it.Also they acquired several quarters ago a company called Telesys.What is the operating income from their maintenance operation?What progress do they have in their arrangement with Bombardier?But by far the biggest item missed is a fact covered in another press release.Chorus tells us about several top management changes and then informs us that the CPA agreement calls for an increase in the number of planes leased from 21 to 53 by 2020.This is a potential huge change and may allow for another 16 planes by mid-2018.If this is true then Chorus should have a large increase in revenues and earnings by the beginning of 2016. That would result in Chorus shares trading around $7.00 by yearend.
Operational Statistics
Chorus reports that it's operational revenues were $400 million down from $418 million in 2014 and that included $8 million generated from Voyageur Airways ,their new acquisition.But this revenue is up by $25 million from the first quarter.Adjusted EBITDA was reported to be $52 million.This is a complicated statistic as it includes foreign exchange gains and EBITDA from Voyageur.Surprisingly Chorus includes a depreciation charge of $2.5 million.It would be more conventional if this charge was excluded and EBITDAwould then be $55 million.This is slightly larger than EBITDA for the same quarter in 2014.
Maintenance expenses increased from $42 million to $51 million in the second quarter of 2014and operating expenses were higher than in 2014.Still operating income increased from $34 to $38 million in Q2 2014.And it increased significantly from the $28 million reported in the first quarter.More importantly adjusted net earnings improved to $.20 per share from $.13 per share in the same quarter in 2014.So it is on track to meet $.80 to $.90 per share annually.
Details missed
Some important details were missed but there was good coverage of many important items.For example,there was good coverage of their new acquisition Voyageur Airways which is starting off successfully.But there was no coverage of what was a main item in other quarterly reports,that is, their maintenance operation.They were supposed to have moved all maintenance activities to Halifax and improved it.Also they acquired several quarters ago a company called Telesys.What is the operating income from their maintenance operation?What progress do they have in their arrangement with Bombardier?But by far the biggest item missed is a fact covered in another press release.Chorus tells us about several top management changes and then informs us that the CPA agreement calls for an increase in the number of planes leased from 21 to 53 by 2020.This is a potential huge change and may allow for another 16 planes by mid-2018.If this is true then Chorus should have a large increase in revenues and earnings by the beginning of 2016. That would result in Chorus shares trading around $7.00 by yearend.
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