("fastjet" or the "Company"; AIM: FJET)
fastjet announces its unaudited interim results for the six months ended 30 June 2013.
· First-half underlying EBIT loss $24.9m including US$13.3m trading losses in the Tanzanian operation.
· Tanzanian operation reported quarterly EBIT loss of US$9.1m in Q1 and US$4.2m in Q2 - a 54% reduction quarter on quarter.
· Net cash at 30th June 2013 was $4.4m. Subsequent to this $9.3m (gross) has been raised via equity issuance.
· fastjet Tanzania achieved US$81 revenue per passenger in June - almost double January's achieved rate of US$46.
· Tanzanian operation is now profitable on an underlying route level basis; and based on current performance once scale increases with additional routes and fully utilised resources the business is expected to become profitable at the EBIT level.
· Growing endorsement of the fastjet brand and low cost airline model by Tanzanian consumers
· Launch of the first international route, from Dar-es-Salaam to Johannesburg is expected imminently, with others planned in the near future.
· Development of an Airline Management Services organisation, enabling the fastjet brand to be rolled-out more rapidly across Africa; reducing shareholder risk and minimising capital requirements is underway.
· Restructuring of the legacy Fly540 businesses progressing well; further progress will be reported in due course; a further $5.7m of goodwill and intangible assets, and $8.8m of investments written down in the period.
fastjet's CEO and Interim Chairman, Ed Winter, commented :
"We are extremely pleased with our operational performance in Tanzania and the endorsement of the fastjet brand by Tanzanian consumers. In response to our consistently high levels of operational reliability, passengers are rapidly adopting fastjet's low-cost model and booking early in order to pay the lowest prices and allowing us to yield manage to high load factors. We are significantly changing the view of air travel and taking the lead in developing the aviation industry in Tanzania.
Building on our existing operation and the strong consumer faith in our brand, we are moving ahead with our growth plans and plan very soon to launch our first international route from Dar es Salaam to Johannesburg. We expect to add further international routes over the next few months, including to destinations in Zambia and Malawi. In addition to this, we will be adding a fifth city, Mbeya, to our Tanzanian domestic network from 1st November following completion of the redevelopment of Songwe airport to accommodate modern jet aircraft.
These interim results include start-up losses associated with launching fastjet Tanzania. Of particular note was that the those losses were more than halved in Q2 compared to Q1. Our performance is expected to considerably improve in the second half of 2013 with yields having grown from US$42 to US $81 between January and June. As our planned network expansion progresses and scale covers fixed operating costs, we fully expect fastjet Tanzania to become profitable.
Once Tanzania is fully established and profitable we will turn our attention again to the South African market. Regional routes from South Africa to Sub-Saharan destinations lack effective competition and are both underserved and overpriced and ready for an alternative to the cosy relationship between South African Airways and the respective national carrier of each country. It can cost the same amount to fly direct between two Southern African cities on a flight of 3-6 hours as it does to fly to Europe on a 10-12 hour flight.
Based on our success in Tanzania to date, fastjet is confident in the potential of its long-term strategy to become the pan-African low cost airline of choice."
For further information, please contact:
fastjet Plc Tel: + 44 203 651 6355
WH Ireland Limited Tel: + 44 207 220 1666
Citigate Dewe Rogerson Tel: + 44 207 638 9571
Posted on 30th September 2013