1time posts “satisfactory results”

Alt X-listed 1time Holdings Limited, the company that owns the like-named low-cost airline, has posted what it says are satisfactory results for 2008 - ”the most turbulent year in aviation history.”
The company says the year was characterised by exceptional revenue growth, unprecedented fuel price increases, currency volatility and the global credit crunch.
“We are particularly pleased at the improved performance in the second half of the financial year with EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) increasing from R5.7 million in the first half of the year to R53.8 million in the second half of the year,” the company says.
Group revenue increased by 56% from R674.6 million, in 2007, to break the billion Rand level at R1050 million for 2008. Revenue growth was underpinned by an 18% increase in passenger numbers and a 34% increase in average yields.
Revenue growth was however largely offset by the R230 million increase in fuel costs attributed to the 65% increase in average Rand fuel prices for 2008.
The fall in headline earnings from R29.9 million last year to R0.97 million for the year is largely due to the R17,9 million foreign currency translation charge caused by the dramatic weakening of the Rand in the last quarter of 2008 and a R10.8 million impairment loss on the four DC9 aircraft held for sale.
The weakening of the Rand however also contributed to the R57 million increase in non‐distributable reserves relating to aircraft valuations.
Cash flow generated from operations for the year remained strong at R76.8 million compared to R63.7 million for 2007. Cash generated by operations has largely been applied towards the cost of acquiring additional aircraft.
There will, however, be no dividend in “line with the Group`s strategy to reinvest in the Group to sustain growth…”
Market environment
The domestic air travel market as measured by passenger departures at all ACSA airports decreased by 6% from 13.1 million passengers in 2007 to 12.3 million in 2008. 1time says this is the first contraction in the domestic market after an average 15% increase per year for the previous five years.
The decline in the overall market demand is attributed to a combination of fuel induced higher airfares, lower GDP growth and the credit crunch. The contraction was particularly severe in the second half of 2008.
Despite the market contractions, 1time airline grew its passenger numbers by 18% to 1.6 million for 2008.
These market share gains by 1time have been achieved largely due to a focused strategy to entice business travellers from the higher airfare legacy carriers.
“Our first regional route to Zanzibar is performing well and we have an application pending to expand to Livingstone as well. We await a ruling from the Competition Commission regarding our objection to 1time`s exclusion from operating air services from Lanseria Airport,” the company adds.
Fleet renewal
1time says it has made further progress in its ongoing fleet upgrade program with the acquisition of a further three MD80 type aircraft during the year. The standardised fleet of ten MD80 type aircraft are fully Stage 3 noise and emission compliant
• four 157 seater MD82 aircraft
• three 157 seater MD83 aircraft
• three 130 seater MD87 aircraft
The fleet of four older DC9 aircraft has been sold subsequent to the financial year end.
“Further aircraft acquisitions are planned for 2009 to support the airlines growth plans for Africa and Lanseria.”
The airline says the standardised MD80 fleet continues to provide the lowest operating costs per seat enabling 1time to consistently offer the lowest airfares in the market.
1time adds that its Aeronexus Technical subsidiary performed well in 2008 increasing revenue by 56% to R191,6 million. Third party aircraft maintenance increased from R39.5 million in 2007 to R49.9 million in 2008. The business operated at close to full capacity for the year.
“The planned capacity expansion advised to shareholders last year on the land adjacent to our facility at OR Tambo was not implemented due to the acquisition of Safair Technical.”
1time reminds that it acquired a 72% shareholding in Safair Technical (Pty) Ltd with effect 1 January 2009 for R20 million. The remaining 28% remains held by Aergo SA Three Limited, a global aircraft leasing company based in Ireland.
“It is planned to merge Aeronexus Technical and Safair Technical during the second quarter of 2009”, to create a business employing “approximately 600 highly skilled aircraft maintenance personnel.”
“The merged business is well positioned to become the premier aircraft maintenance provider on the African continent” with a seven-bay hanger facility at OR Tambo International Airport. It also holds all necessary AMO approvals, including the American FAA, the European EASA and the South African CAA.
“1time charters performed below expectations largely due to 1time airline utilising charter aircraft capacity for growth and pursuant to the decision to sell the four DC9 aircraft earmarked for the charter business,” the company concedes.
“Charter demand remains high particularly ahead of the British Lions Tour and 2010 World Cup.” Capacity expansion is expected for the 2009 financial year.