Published on : Tuesday, October 31, 2017
WestJet today announced its third quarter results for 2017, with record net earnings of $138.4 million, or $1.18 per fully diluted share, as compared with the net earnings of $116.0 million, or $0.97 per fully diluted share reported in the third quarter of 2016, up 19.4 per cent and 21.6 per cent, respectively. WestJet achieved its 50th consecutive quarter of profitability and flew an all-time quarterly record of 6.5 million guests. Based on the trailing twelve months, the airline achieved a return on invested capital of 10.2 per cent, up compared to the 9.8 per cent reported in the previous quarter.
“Today we reported our 50th consecutive profitable quarter, which included record earnings, margin expansion, positive year over year RASM growth, and improved return on invested capital, as we achieved the highest ever quarterly load factor in our 21-year history and flew an all-time quarterly record number of guests. Our business fundamentals continue to strengthen, which combined with new strategic initiatives, including the launching of Swoop in the summer of 2018 and Boeing Dreamliner service starting in 2019, gives us great confidence in our ability to deliver sustainable profitable growth and earnings expansion,” said WestJet President and CEO Gregg Saretsky. “I want to thank our more than 13,000 WestJetters for their dedication and energy in delivering our award-winning brand of friendly caring service, and I especially look forward to celebrating our success at the November profit share event.”
Operating highlights (stated in Canadian dollars)
|Q3 2017||Q3 2016||Change||Year-to-date 2017||Year-to-date 2016||Change|
|Net earnings (millions)||$138.4||$116.0||19.4%||$235.1||$240.3||(2.1%)|
|Diluted earnings per share||$1.18||$0.97||21.6%||$2.00||$1.98||1.0%|
|Total revenue (millions)||$1,215.6||$1,124.3||8.1%||$3,384.9||$3,105.1||9.0%|
|Operating margin||16.6%||15.1%||1.5 pts||10.7%||11.4%||(0.7 pts)|
|ASMs (available seat miles) (billions)||8.077||7.635||5.8%||23.339||22.045||5.9%|
|RPMs (revenue passenger miles) (billions)||6.922||6.414||7.9%||19.575||18.152||7.8%|
|Load factor||85.7%||84.0%||1.7 pts||83.9%||82.3%||1.6 pts|
|Yield (revenue per revenue passenger mile) (cents)||17.56||17.53||0.2%||17.29||17.11||1.1%|
|RASM (revenue per available seat mile) (cents)||15.05||14.73||2.2%||14.50||14.09||2.9%|
|CASM (cost per available seat mile) (cents)||12.55||12.50||0.4%||12.96||12.48||3.8%|
|Fuel costs per litre (cents)||62||57||8.8%||63||53||18.9%|
|CASM, excluding fuel and employee profit share (cents)*||9.26||9.38||(1.3%)||9.78||9.72||0.6%|
|*Refer to reconciliations in the accompanying tables for further information regarding calculations.|
On October 30, 2017, WestJet’s Board of Directors declared a cash dividend of $0.14 per common voting share and variable voting share for the fourth quarter of 2017, to be paid on December 29, 2017, to shareholders of record on December 13, 2017. 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 the launching of Swoop in the summer of 2018, the launching of Boeing Dreamliner service starting in 2019, WestJet’s ability to deliver sustainable profitable growth and earnings expansion, and payment of future dividends, is forward-looking information within the meaning of applicable securities laws. 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. 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.
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 nine months ended September 30, 2017, which is available under WestJet’s profile on SEDAR, 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.