On the same day that SAA announced another set of disappointing results, Comair issued a trading statement revealing that earnings had more than doubled in the six months to December, which is the first half of financial 2014.
In a Stock Exchange News Service announcement, the company said earnings a share were expected to be between 32c and 35c.
This is more than double the 16.4c a share posted in the first half of the previous year.
Comair chief executive Erik Venter told Business Report that the improvement in the earnings performance in the interim period was in line with the strong performance seen in the second half of financial 2013.
Venter said that the performance in the first half of financial 2014 was helped by the introduction of a new, more efficient fleet of aircraft, which had not been in operation in the first half of financial 2013.
The acquisition of a new fleet made a significant contribution to the strong improvement in results achieved in financial 2013. The performance was also helped by wide-scale cost cutting and improved operating systems.
Venter said the weakness in the rand was expected to result in a significant rise in Comair’s fuel costs. At the current low levels against the dollar the monthly fuel bill could increase by about R20 million, which was equivalent to a rise of 14 percent.
Venter said that it was difficult to anticipate how much of this increase could be recovered through increased fares and increased volumes of passengers. He pointed out that consumers would also be hit hard by the weaker rand and that this might restrict passenger volumes.
With regard to the recent surge in foreign tourists, Venter noted that most of Comair’s business was “domestic point-to-point travel”, which did not include foreign tourists.
The stock rose 4.69 percent to close at R3.35 yesterday.
The current share price compares with the R2.90 a share the company paid when it repurchased 29.8 million shares in November last year.
Last month, Comair repurchased an additional 19 million shares at an average price of R3.23 a share.
These share repurchases followed the sale of large blocks of Comair shares by two of the company’s directors, Atul Gupta and Ronnie Ntuli. Gupta has since resigned from the Comair board. – Business Report