Chorus Aviation announces fourth quarter and year-end 2021 financial results

posted on 17th February 2022 by Eddie Saunders
Chorus Aviation announces fourth quarter and year-end 2021 financial results

Chorus Aviation Inc. today announced fourth quarter and year end 2021 financial results.

Q4 2021 Key Metrics

  • Net income of $10.2 million, or $0.06 per basic share; a quarter-over-quarter increase of $1.0 million primarily due to lower impairment and expected credit loss provisions of $31.0 million in the Regional Aircraft Leasing (‘RAL’) segment in addition to increased revenue in the Regional Aviation Services (‘RAS’) segment, partially offset by a reduction in unrealized foreign exchange gains of $35.4 million.

  • Adjusted net income1 of $21.5 million, or $0.12 per basic share; an increase of $13.8 million quarter-over-quarter primarily due to additional aircraft earning leasing revenue, lower depreciation, and a reduction in realized foreign exchange losses.

  • Adjusted EBITDA1 of $90.5 million; an increase of $8.5 million over fourth quarter 2020 due to additional aircraft earning leasing revenue and a lower expected credit loss provision partially offset by decreased earnings due to a lower US dollar exchange rate.

  • Collected approximately 83% (67% in Q2’21, 77% in Q3’21) of the RAL segment’s lease revenue recognized in the fourth quarter.

  • Liquidity of $188.5 million.

2021 Year-End Key Metrics & Highlights

  • Net loss of $20.5 million, or $0.12 per basic share; a year-over-year decrease in net income of $62.0 million primarily due to capacity purchase agreement (‘CPA’) restructuring costs of $58.9 million net of tax recoveries in accordance with the 2021 CPA amendments.

  • Adjusted net income1 of $63.9 million, consistent with the prior year, or $0.37 per basic share.

  • Adjusted EBITDA1 of $329.4 million; a decrease of $18.0 million over 2020, primarily due to lower lease revenue attributable to off-lease aircraft, negotiated lease amendments (including extensions) and decreased Fixed Margin, partially offset by additional aircraft earning leasing revenue and a lower expected credit loss provision.

  • Revised CPA with Air Canada, enhancing Jazz’s position as the exclusive Air Canada Express operator of 70-78 seat regional capacity until the end of 2025 with the addition of 25 Embraer 175s to the Covered Fleet, and is the sole provider of Air Canada Express services.

  • Completed a public offering and concurrent private placement for gross proceeds of $145.1 million.

  • Remarketed all 13 off-lease aircraft repossessed in 2020 by Chorus Aviation Capital (‘CAC’):
    • two Dash 8-400s to Sky Alps of Italy.
    • one Dash 8-400 to National Jet Express, a subsidiary of Australian aviation operator, Cobham Aviation Services.
    • two Dash 8-400s to Waltzing Matilda Aviation of Boston, doing business as Connect Airlines.
    • six ATR 72-600s to Emerald Airlines of Dublin.
    • two CRJ900s to City Jet of Dublin (in February 2022).

  • Secured a three-year contract with Purolator for air cargo charter services, executing on Chorus’ growing capabilities in this market segment.

  • Awarded a three-year contract to upgrade and modify Transport Canada’s National Aerial Surveillance Program fleet of Dash 8-100 and Dash 7 aircraft with new surveillance equipment.

  • Awarded a new five-year contract extension to provide fixed-wing air ambulance service for Ambulance New Brunswick further extending its 25-year relationship.

  • Awarded, in partnership with General Dynamics Mission Systems – Canada, an eight-year contract for the in-service support of the Canadian Armed Forces manned airborne intelligence surveillance and reconnaissance program.

  • Established new three-year $75.0 million revolving committed credit facility, plus a $25.0 million uncommitted accordion.

“I’m proud and encouraged by our accomplishments in 2021, especially in light of a prolonged pandemic,” stated Joe Randell, President and Chief Executive Officer, Chorus Aviation Inc.

“We strategically managed our liquidity through successful capital raises and reduced our net debt by approximately $240 million or 12% to recharge our financial flexibility.

“Further, our newly awarded specialized contracts and new aircraft leasing agreements served to strengthen our organization.

“While airlines around the world are still challenged to return to pre-COVID-19 financial levels, our fourth quarter yielded positive returns to our shareholders of $0.06 in net earnings.

“Our employees have shown tremendous resilience throughout this crisis and have provided safe and high-quality services to our customers; I’m deeply grateful for their perseverance and dedication.”

“The CAC team has done well, in a challenging environment, remarketing all 13 aircraft repossessed in 2020, and collecting 83% of lease revenue recognized in the fourth quarter, an improvement over the previous quarter,” concluded Mr. Randell.

“Our Air Canada Express flying grew to 76% of pre-COVID-19 fourth quarter flying levels and is now projected to reduce in the first quarter due to the current decrease in passenger travel demand.

“While our flying activity under the CPA doesn’t impact our fixed fee compensation, it is indicative of the market sentiment on air travel.

“Voyageur is relatively unaffected by the pandemic and is executing well on the new contracts it was awarded in 2021.

“The momentum they gained last year will continue to positively impact earnings throughout 2022 and beyond.

“Our accomplishments over the last two years have proven we have the expertise and resilience to manage through this crisis and we are well poised to seize new growth opportunities”.