IndiGo Q4 loss at Rs 871 cr, defers new capacity addition amid Covid-19

For the full fiscal year, the low cost airline’s net loss stood at Rs 233.7 crore.
Private airline IndiGo on Tuesday reported a net loss of Rs 870.8 crore for the March quarter of FY20 (Q4FY20) as air travel remained severely disrupted during the quarter due to the coronavirus (Covid-19) outbreak.

The airline had logged a net profit of Rs 589.6 crore in the year-ago quarter (Q4FY19), and Rs 496 crore in the December quarter of FY20.

"Closure of flight operations during national lockdown on account of Covid-19 significantly impacted revenue for the quarter. IndiGo reports net loss of Rs 8,70.8 crore and EBITDAR of INR 86.7 crore for the quarter ended March 2020. With the prevailing uncertainty due to pandemic, we are not in a position to provide capacity growth guidance," the airline said in a statement. 

The airline added just 5 aircraft in the recently concluded quarter to take the tally at 262 from 257 (December 2019).

For the full fiscal year, the low cost airline’s net loss stood at Rs 233.7 crore. 

The net loss beat Street estimates for net loss which had varied from Rs 2,604.7 crore, pegged by Elara Capital, to Rs 1,015.4 crore, estimated by HSBC.  CLICK HERE TO READ WHAT ANALYSTS EXPECTED

The loss before tax, however, was at Rs 1,289.8 crore compared to profit of Rs 626.1 crore in Q4FY19.

The revenue from operations stood at Rs 8,299.1 crore, up 5.27 per cent year-on-yar (YoY), from Rs 7,883.3 crore earned in Q4FY19. Sequentially, the revenue dropped 16.4 per cent from Rs 9,931.7 crore.

Analysts at Kotak Institutional Equities expected the revenue to come in at Rs 7,345.2 crore.

“We expect 11 per cent YoY decline in passenger revenues on account of around 5 per cent YoY decline in passenger volumes and 6.5 per cent decline in fares. Overall, revenue decline of 7 per cent is lower due to higher contribution of ancillary revenues,” they wrote in their earnings preview report.

Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR), one of the key metrics, to judge the profitability of an airline came in at Rs 86.7 crore for the quarter under review. It was Rs 2,192.6 crore in Q4FY19 and Rs 1,960.7 crore in Q3FY20.

The EBITDAR margin, on the other hand, stood at 1 per cent, down from 27.9 per cent YoY.

Basic EPS turned negative during the quarter at Rs 22.63, the management said in a statement.

The airline's load factor declined to 82.8 per cent for the recently concluded quarter, as against 86 per cent in Q4FY29.

On the cost front, the airline's fuel expenses rose 3 per cent YoY to Rs 2,860.4 crore from Rs 2,781.3 crore in Q4FY19. Besides, its supplementary rental and aircraft repair costs jumped a staggering 75.6 per cent YoY to Rs 1,681 crore.

The country’s largest airline, said in a post-earnings analysts' call, that it will not pay any dividend to its shareholders for the financial year ended 2020. This, along with other cost-saving steps, would help the company generate liquidity of around Rs 4,000 crore to withstand the Covid-19 crisis, it said on Tuesday.

Among the many steps that will help the airline generate savings include cost renegotiation with suppliers and vendors, deferment of supplementary lease rentals to lessors and restructuring employee cost.

“We have approached all our suppliers and vendors to reduce the purchase service cost and I should tell you that we have already successfully renegotiated many of those,” said Ronojoy Dutta, CEO of the airline.

At the end of the March quarter, the airline has free cash reserves of Rs 8,928.1 crore, compared to Rs 6,079.6 crore in Q4FY19. The restricted cash reserves stand at Rs 11,448.8 crore, up 24 per cent YoY, from Rs 9,228.5 crore.

The company's total debt, however, jumped a massive 835 per cent YoY to Rs 22,719.2 crore from Rs 2,429.2 crore in Q4FY19.

On Tuesday, the counter closed at Rs 946 apiece, down 0.8 per cent on the BSE. During the quarter under review, the stock of the Gurgaon-headquartered airline marginally outperformed the market. The stock price of IndiGo slipped 20 per cent, while the benchmark S&P BSE Sensex skid 28.5 per cent during the period, ACE Equity data show.

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