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Chorus reports Q1, earnings loss, strong liquidity
“The Chorus team has overcome significant challenges in the past, and I’m confident this crisis will be no different.”
May 15, 2020 By Wings Staff
Chorus Aviation Inc. on May 14 reported its first quarter 2020 financial results and provided an update of its measures in relation to COVID-19. Headquartered in Halifax, Nova Scotia, Chorus is comprised of Chorus Aviation Capital, its global lessor of regional aircraft, as well as aircraft operators Jazz Aviation and Voyageur Aviation.
“Our company started this year in the strongest position in our history, having a strong balance sheet, customer base and growth prospects,” said Joe Randell, president and CEO, Chorus. “Our growth trajectory generated increases in adjusted net income and adjusted EBITDA of approximately 31.2 per cent and 18.7 per cent, respectively, quarter over quarter.”
Beyond its adjust EBITDA numbers, Chorus posted a net loss of $17.3 million for the first quarter, ended March 31. When compared with earnings of $33.5 million in last year’s corresponding quarter, net income fell $50.7 million – 151 per cent – year over year. The company points to a change in net unrealized foreign exchange losses of $55.1 million as the primary reason for the drop. Chorus reported adjusted net income of $25 million, up from $19 million last year, again relating these positive numbers to its strong start to 2020 before the COVID-19 pandemic hit.
In its 2020 first quarter statement, Chorus notes it is planning to begin operation of a Dash 8-400 Simplified Package Freighter under the Air Canada Express banner, allowing Chorus to transport loose load cargo like medical supplies, personal protective equipment and other goods needed to support the ongoing fight against COVID-19.
Jazz to operate Dash 8-400s reconfigured for freight
“The Chorus team has overcome significant challenges in the past, and I’m confident this crisis will be no different,” said Randell, noting a series of cost-reduction actions to combat the economic impact of COVID-19, including the measure first announced in early April to temporarily lay off approximately 3,000 employees. “We have a strong liquidity position, with combined cash and committed facilities of over $265 million, providing liquidity to navigate through this period and emerge positively on the other side,” said Randell.
On April 28, 2020, Chorus further increased its liquidity by obtaining a US$100 million unsecured revolving credit facility for general corporate purposes, repayable in two years. Chorus is also in the process of raising approximately US$30 to US$50 million in financing to be secured by up to four unencumbered aircraft – anticipated to close in the second quarter.
Chorus states its first quarter results were also impacted by a reduction in other revenue due to reduced contract flying and a decrease in third-party maintenance, repair and overhaul activity.
