SpiceJet loss widens 59% to Rs 275 cr

SpiceJet’s net loss in the quarter ending December 31, 2014, widened 59 per cent to Rs 275 crore (Rs 2.75 billion) on a decline in revenue, higher finance costs and aircraft redelivery expenses.

The low-cost airline has sharply reduced operations on the back of financial troubles, but expects to get back on track from April, with investment of Rs 1,500 crore (Rs 15 billion) coming from founder-promoter Ajay Singh.

Net sales in the quarter fell 28 per cent to Rs 1,301 crore (Rs 13.01 billion), while the airline took a hit of Rs 295 crore towards one-off expenses in the quarter.

Re-delivery costs, or costs attached towards early termination of 17 aircraft leases, amounted to Rs 172 crore (Rs 1.72 billion).

“The last quarter was an extremely challenging quarter for SpiceJet as legacy issues, accumulated losses, and delays in expected and required re-capitalisation eventually led to aircraft fleet reductions and consequential cancellations of flights in what is traditionally one of the best quarters of the year,” said Sanjiv Kapoor, chief operating officer.

Excluding one-off charges and exceptional costs, unproductive lease rentals, provisions for impact of fleet reductions, and early contract termination, the carrier would have achieved net profit of Rs 20 crore (Rs 200 million) for the quarter.

“Despite all the aircraft and fleet reduction-related challenges, the company achieved a five per cent higher unit revenue (revenue per available seat km) on a year-on-year basis,”Kapoor said.

On December 31, SpiceJet’s accumulated losses had grown to Rs 3,233 crore (Rs 32.33 billion).

Total liabilities (net of total assets) stood at Rs 1,635 crore (Rs 16.35 billion).

In January, SpiceJet’s revival plan was approved by the civil aviation ministry, under which promoter Kalanithi Maran would transfer his entire 58 per cent stake to Singh.

Of the Rs 1,500 crore (Rs 15 billion) worth of investments that Singh is bringing in, in four tranches, Rs 100 crore (Rs 1 billion) was infused in January; Rs 400 crore (Rs 4 billion) is expected this month.

SpiceJet also said it is in the process of evaluating other means of raising funds, including options for “strategic funding”. Outgoing promoters are also expected to pump in Rs 375 crore (Rs 3.75 billion) through share warrants.

SpiceJet’s auditors, S R Batliboi & Associates, have again highlighted that the results “indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern”.

The SpiceJet scrip at the BSE closed 0.25 per cent up on Thursday, at Rs 20.05 a share. The results came after market hours.