Alliance Aviation Services Ltd (ASX:AQZ) Full Year 2024 Earnings Call Highlights: Strong ...

GuruFocus News
3 min read

In This Article:

  • Revenue: $646.8 million, a significant increase from the previous year.

  • EBITDA: $178.4 million.

  • Profit Before Tax (PBT): $86.3 million, slightly above consensus.

  • Operating Cash Flows: $109.3 million.

  • Flight Hours: Increased by 39% to 104,545 hours.

  • Operating Fleet: 72 aircraft in service, with a total fleet of 86 aircraft.

  • Contract Charter Revenue Growth: 4% increase.

  • Wet Lease Revenue: Grew by $102 million to $266 million, up 62%.

  • Aviation Services Revenue: Increased to $29.4 million.

  • Net Debt: $305.9 million as of June 30.

  • Borrowings: Increased from $227 million to $329 million.

  • Market Capitalization: $473 million as of August 27.

  • Employee Count: Increased to 1,413 employees.

Release Date: August 28, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Alliance Aviation Services Ltd (ASX:AQZ) reported a significant increase in revenue to $646.8 million, marking a substantial growth from the previous year.

  • The company achieved a 39% increase in flight hours, reaching 104,545 hours, which highlights operational expansion.

  • Wet lease revenue saw a remarkable growth of 62%, contributing $266 million, driven by increased operations with Qantas.

  • Alliance successfully renewed seven major contracts during FY24, ensuring long-term stability and revenue continuity.

  • The company expanded its fleet with 72 aircraft in service, including a mix of Embraer and Fokker aircraft, supporting increased operational capacity.

Negative Points

  • Alliance Aviation Services Ltd (ASX:AQZ) faces increased finance costs due to debt drawn for aircraft transactions, impacting overall financials.

  • The company has a high level of borrowings, which increased from $227 million to $329 million, raising concerns about leverage.

  • There is a reduction in available capacity for Ad-hoc charter services due to high demand for contract and wet lease services.

  • The company is not paying dividends currently, with plans to revisit this only after completing its capital expenditure program.

  • Potential revenue impact from the Nickel West contract, which could result in an $8 million to $9 million earnings hit over the next two financial years.

Q & A Highlights

Q: Can you provide the timeline for the deployment of aircraft to Qantas and the activation of inventory aircraft? A: Two aircraft will go to Qantas in mid-September, another in late October, and the final one in mid-December. Additional aircraft from inventory will likely become active in the latter half of the financial year due to a shuffle involving dry lease aircraft.

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