Johannesburg - SA Express had returned to profitability after a period of losses, the state-owned domestic and regional airline that operates as part of the SAA group reported yesterday.
At its annual general meeting SA Express reported a net profit of R650 000 for the year to March, up from a restated loss of R365.9 million last year.
The dramatic turnaround was attributed mainly to an increase of more than R270m in turnover to R2.295bn this year, while operating costs remained stable, and to a recognition of a deferred tax asset of R158m based on future profits.
Inati Ntshanga, the chief executive, reported that its operating results improved from a loss of R288.3m last year to an operating loss of R25.1m in 2012/13.
Cash used in operations was also reduced, from R234.2m last year to R133m this year.
SA Express reported that operations were expected to be sustainable based on expected future growth and implementation of the 20:20 Vision policy in line with SAA’s long-term turnaround strategy. This has resulted in SA Express clearing the disclaimed audit opinion from previous years.
Ntshanga said team commitment and hard work drove initiatives that amounted to a cost savings of R129m, exceeding a target of R70m.
“Although the business is making the right decisions and heading in the right direction we cannot afford to be complacent as a lot still needs to be done to ensure that we champion a sustainable operational and financial performance.”
Andile Mabizela, who was appointed chairman of the SA Express board last year, said that in the past financial year the new board, together with the executive management of SA Express, had invested significant resources to deliver value to the shareholder (the government) “amid tough internal and external pressures”.
He said SA Express was gearing itself up for growth in accordance with its strategy. It expected to update its fleet in the second half of next year with next generation aircraft that would offer a comprehensive route network and reduce operational costs. - Business Report