Airline achieves 41st consecutive profitable quarter, record return on invested capital and record quarterly earnings per share of $0.49, up 23 per cent for the second quarter
CALGARY, July 28, 2015 /CNW/ – WestJet (TSX: WJA) today announced its second quarter results for 2015, with net earnings of $61.6 million, or $0.49 per fully diluted share, as compared with the net earnings of $51.8 million, or $0.40 per fully diluted share reported in the second quarter of 2014. WestJet achieved an on-time performance rate of 91.3 per cent in the second quarter, a year-over-year improvement of 6.8 percentage points, placing WestJet as the top performing North American airline during the quarter. Based on the trailing twelve months, the airline achieved a return on invested capital of 16.0 per cent, up 0.2 percentage points from the 15.8 per cent reported in the previous quarter.
“I would like to congratulate our more than 10,000 WestJetters on these exceptional second quarter results which marked our 5th quarter of consecutive record adjusted net earnings,” said WestJet President and CEO Gregg Saretsky. “The second quarter is historically our most challenging quarter as capacity is transitioned from southern to domestic markets, so it is particularly rewarding to turn in a double digit margin this quarter. With another quarter of record earnings, and after having exceeded our ROIC target for 12 consecutive quarters, we are pleased to announce that we are increasing our target to 13 to 16 per cent, while continuing our commitment to our brand of friendly, caring service and affordable fares.”
Operating highlights (stated in Canadian dollars)
| Q2 2015 | Q2 2014 | Change | Year-to-date 2015 | Year-to-date 2014 | Change | |
| Net earnings (millions) | $61.6 | $51.8 | 18.9% | $202.3 | $141.1 | 43.4% |
| Diluted earnings per share | $0.49 | $0.40 | 22.5% | $1.58 | $1.09 | 45.0% |
| Total revenue (millions) | $942.0 | $930.3 | 1.3% | $2,025.5 | $1,972.4 | 2.7% |
| Operating margin | 10.7% | 8.4% | 2.3 pts | 14.7% | 10.6% | 4.1 pts |
| ASMs (available seat miles) (billions) | 6.655 | 6.193 | 7.5% | 13.473 | 12.707 | 6.0% |
| RPMs (revenue passenger miles) (billions) | 5.199 | 4.930 | 5.5% | 10.765 | 10.347 | 4.0% |
| Load factor | 78.1% | 79.6% | (1.5 pts) | 79.9% | 81.4% | (1.5 pts) |
| Segment guests | 4,956,488 | 4,772,324 | 3.9% | 9,871,067 | 9,579,009 | 3.0% |
| Yield (revenue per revenue passenger mile) (cents) | 18.12 | 18.87 | (4.0%) | 18.82 | 19.06 | (1.3%) |
| RASM (revenue per available seat mile) (cents) | 14.16 | 15.02 | (5.7%) | 15.03 | 15.52 | (3.2%) |
| CASM (cost per available seat mile) (cents) | 12.65 | 13.76 | (8.1%) | 12.83 | 13.87 | (7.5%) |
| CASM, excluding fuel and employee profit share (cents)* | 9.28 | 9.23 | 0.5% | 9.23 | 9.26 | (0.3%) |
*Refer to reconciliations in the accompanying tables for further information regarding calculations.
Normal course issuer bid?Today, WestJet also announced that the Toronto Stock Exchange has approved WestJet’s amendment to its existing normal course issuer bid to increase the maximum number of shares the Company is authorized to purchase from 2.0 million shares to 4.0 million shares during the period of May 13, 2015 to May 12, 2016.
Dividend declaration?On July 27, 2015, WestJet’s Board of Directors declared a cash dividend of $0.14 per common voting share and variable voting share for the third quarter of 2015, to be paid on September 30, 2015, to shareholders of record on September 16, 2015. All dividends paid by WestJet are, pursuant to subsection 89(14) of the Income Tax Act, designated as eligible dividends, unless indicated otherwise. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit.
Caution regarding forward-looking information?Certain information set forth in this news release, including, without limitation, information regarding our return on invested capital target and our intention to amend our existing normal course issuer bid is forward-looking information within the meaning of applicable Canadian securities law. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond WestJet’s control. The forward-looking information contained in this news release is based on WestJet’s current forecasts and strategy, the expected demand environment, the utilization of our fleet, the forward-curve for jet fuel price, the expected exchange rate of the Canadian dollar to the U.S. dollar, agreements and bookings, but may vary due to factors including, but not limited to, changes in guest demand, changes in fuel prices, delays in aircraft delivery, general economic conditions, competitive environment, ability to effectively implement and maintain critical systems and other factors and risks described in WestJet’s public reports and filings which are available under WestJet’s profile at sedar.com. Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. WestJet does not undertake to update, correct or revise any forward-looking information as a result of any new information, future events or otherwise, except as may be required by applicable law.
Non-GAAP measures?This news release contains disclosure respecting non-GAAP performance measures including, without limitation, CASM, excluding fuel and employee profit share and return on invested capital. These measures are included to enhance the overall understanding of WestJet’s current financial performance and to provide an alternative method for assessing WestJet’s operating results in a manner that is focused on the performance of WestJet’s ongoing operations, and to provide a more consistent basis for comparison between reporting periods. These measures are not calculated in accordance with, or an alternative to, GAAP and do not have standardized meanings. Therefore, they may not be comparable to similar measures provided by other entities. Readers are urged to review the section entitled “Reconciliation of non-GAAP and additional GAAP measures” in WestJet’s management’s discussion and analysis of financial results for the three and six months ended June 30, 2015, which is available under WestJet’s profile on SEDAR at sedar.com, for a further discussion of such non-GAAP measures and a reconciliation of such measures to GAAP. The financial information accompanying this news release was prepared in accordance with International Financial Reporting Standards unless otherwise noted.
Management’s discussion and analysis of financial results and condensed consolidated financial statements and notes for the three and six months ended June 30, 2015, are available through the Internet in the Media and Investor Relations section of www.westjet.com or under WestJet’s SEDAR profile at www.sedar.com.
Analyst conference call?WestJet will hold its quarterly analysts’ conference call today, July 28, 2015, at 9 a.m. MDT (11 a.m. EDT). President and CEO Gregg Saretsky and Interim CFO Candice Li will discuss WestJet’s second quarter results and answer questions from financial analysts and members of the media. The conference call will be available in Toronto by calling 416-915-3239, in Vancouver by calling 604-638-5340 and across Canada and the United States through the toll-free telephone number 1-800-319-4610. The call can also be heard live through an Internet webcast accessible via the Media and Investor Relations section of www.westjet.com.
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