cebu air, inc. 4th quarter and full year 2015 results …...4th quarter and full year 2015 results...
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cebupacificair.com
Cebu Air, Inc.4th Quarter and Full Year 2015 Results of Operations
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Disclaimer
30 March 2016 2
This information provided in this presentation is provided only for your reference. Such information has not been independently verified and, as such, is not guaranteed to be accurate nor complete. Neither Cebu Air, Inc. (“CEB” or the “Company”) nor any of its affiliates, shareholders, directors, employees, agents or advisers makes expressed or implied representations or warranties as to the accuracy or completeness of the information contained herein and neither of them shall accept any responsibility or liability (including any third party liability) for any loss or damage, whether or not arising from any error or omission in compiling such information or as a result of any party’s reliance or use of such information. The information and opinions in this presentation are subject to change without notice.
EBITDAR, EBITDA, EBITDAR Margin, EBIT and core net income are not measures of performance under the Philippine Financial Reporting Standards (“PFRS”), and should not be considered in isolation or as alternatives to net income as an indicator of CEB’s operating performance or to cash flow from operating, investing and financing activities as a measure of liquidity, or any other measures of performance under PFRS. Because there are various EBITDAR, EBITDA, EBITDAR Margin, EBIT and core net income calculation methods,CEB’s presentation of these measures may not be comparable to similarly titled measures used by other companies.
This presentation also contains certain “forward-looking statements.” These forward-looking statements include words or phrases such as CEB or its management “believes”, “expects”, “anticipates”, “intends”, “plans”, “foresees”, or other words or phrases of similar import. Similarly, statements that describe CEB’s objectives, plans or goals are also forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Such forward looking statements are made based on management’s current expectations or beliefs as well as assumptions made by, and information currently available to, management. There is no assurance that expectedevents will occur, that projections will be achieved, or that the Company and its management’s assumptions are correct.
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Business Updates
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Operating Statistics
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• CEB flew 4.7M passengers in 4Q15, up 8.8% YOY, and 18.4M in FY15, up 8.9%
• For 4Q15, ASK grew 6.7% while RPK grew faster at 18.2% YOY. This brings full year ASK to 24.9B, up 21.5% YOY, and RPK to 19.9B, up 22.6%.
• We posted 86.0% seat load factor in 4Q15 and 82.6% in FY15
• As of December 31, 2015: 63 destinations, 97 routes, and 2,685 weekly flights
• We utilized our airbus fleet 12.6 hours per day and turned them 6.5x per day for FY15
• On-time performance (OTP) posted at 65.1% for FY15
LoadFactor
82.9% 86.0% 83.9% 82.6%
4.3 4.7
5.2 5.5
4Q14 4Q15
16.9 18.4
20.1 22.2
FY14 FY15
Passenger and capacity in millions
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Domestic Market
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• Highest market share at 60.0% in 4Q15(1) and 59.5% for FY15
• Most number of passengers carried and highest load factor
• Only airline with competitive performance index above 1
• 34 destinations, 56 routes, and 2,177 weekly flights
(1)4Q15 figures are based on internal estimates
7.6% 10.4% 9.7% 11.1%
28.9% 29.3% 29.1% 29.0%
63.2% 60.0% 60.8% 59.5%
4Q14 4Q15 FY14 FY15
Average Domestic Market Share
CEB Group
PAL Group
AirAsia Group
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Short Haul International
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Destination Seat Share(1)
Hong Kong 29.8%
Singapore 32.9%
South Korea 8.3%
• SLF posted at 80.3% in 4Q15, and 78.5% for FY15
• 24 short haul destinations, 36 routes, and 466 weekly flights
• Hong Kong, Singapore, and South Korea are our largest short haul international markets in terms of revenue, followed by China and Japan
• Launched direct flights from Manila to Guam last March 15, 2016
o Guam is CEB’s first US destination
o CEB is the first low cost carrier to operate this route
(1) From CAPA route capacity data for week of October 26, 2015
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Long Haul Operations
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• Long haul posted 77.3% SLF in 4Q15, and 73.0% for FY15
• 5 long haul destinations, 5 routes, and 42 weekly flights
• Manila-Dubai posted 29.9% YOY passenger growth in 2015 with 79.5% SLF
• CEB is still the largest carrier to operate Manila-Sydney, capturing 40.1% market share for FY15.
Destination Seat Share(1)
Dubai 22.4%
Sydney 42.4%
Kuwait 100%
Riyadh 21.2%
Doha 15.7%
(1) From CAPA route capacity data for week of October 26, 2015
30,348
138,793 86,068
105,847 96,670
91,075
213,086
335,715
2014 2015
Sydney Passenger YOY Traffic Growth
Qantas
PAL
Cebu Pacific
Source: Australia BITRE
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Financial Results
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4Q14 4Q15 FY14 FY15YOY Change
4Q FYTotal Revenue (Php Million) 13,554 14,243 52,000 56,502 5% 9%
Passenger Revenue 10,464 10,555 40,188 42,681 1% 6%Ancillary Revenue 2,203 2,714 8,665 10,359 23% 20%Cargo Revenue 888 974 3,146 3,461 10% 10%
Average Yield per passenger 2,919 2,809 2,896 2,886 -4% 0%Average fare 2,411 2,235 2,382 2,323 -7% -3%Ancillary/passenger 508 575 514 564 13% 10%
Cargo yield per kg 21 22 20 22 5% 6%
Cost/ASK (CASK) 2.085 1.846 2.334 1.880 -11% -19%CASK ex-fuel 1.107 1.193 1.202 1.170 8% -3%
(PHP million)EBITDAR 3,472 5,384 12,418 19,700 55% 59%EBIT 1,303 2,665 4,157 9,700 105% 133%Pre-tax Core Net income 1,065 2,433 3,320 8,746 128% 163%Net income (1,226) 831 853 4,387 168% 414%
MarginsEBITDAR Margin 25.6% 37.8% 23.9% 34.9% 12 ppts 11 pptsEBIT Margin 9.6% 18.7% 8.0% 17.2% 9 ppts 9 pptsPre-tax Core Net Income Margin 7.9% 17.1% 6.4% 15.5% 9 ppts 9 pptsNet income margin -9.0% 5.8% 1.6% 7.8% 15 ppts 6 ppts
Income Statement Highlights
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Balance Sheet Highlights
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As at Dec 31, As at Dec 31,Php Millions 2014 2015
Current assets 8,526 9,763Noncurrent assets 67,536 75,066Total Assets 76,062 84,829
Total debt(1) 33,850 36,589Other liabilities 20,674 23,284Total Liabilities 54,523 59,873Total Equity 21,539 24,955
Net debt-to-equity(2) 1.39x 1.28xAdjusted net debt-to-equity(3) 2.58x 2.48xCash-to-sales-LTM ratio 8% 8%Forex, closing 44.72 47.06
• Cash level at P4.71B in 2015 vs. P3.96B in 2014
• Property and equipment at P72.1B in 2015 vs. P65.2B in 2014 due to two net aircraft additions in our fleet
NOTE:(1) Includes current and noncurrent portion of long-term debt(2) Net debt is total debt less cash and cash equivalents(3) Adjusted net debt is net debt plus capitalized lease and ARO liability
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Cash Flows
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Php Millions FY2015CASHFLOWS FROM OPERATING ACTIVITIESIncome after noncash adjustments 15,189Net changes in working capital (1,738)Interest and taxes paid – net (1,056)Net cash provided by operating activities 12,395
CASHFLOWS FROM INVESTING ACTIVITIESAcquisition of and proceeds from disposal of property and equipment and other noncurrent assets (11,906)Dividends received from joint venture 101Net cash used in investing activities (11,805)
CASHFLOWS FROM FINANCING ACTIVITIESAvailments of long term debt 6,467Repayments and pre-termination of long term debt (5,518)Dividends paid (909)Net cash provided by financing activities 40
Net foreign exchange difference 113
NET INCREASE IN CASH AND CASH EQUIVALENTS 742CASH AND CASH EQUIVALENTS, beginning 3,964
CASH AND EQUIVALENTS, END 4,706
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Outlook
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Fuel, Forex and, Forward Bookings
Fuel
• As of March 28, 2016, Jet Kero at $48.12/bbl
from $43.44/bbl in December 31, 2015
• Hedge ratio at 24% for 2016, 30% for 2017,
and 5% for 2018.
Forex
• As of March 28, 2016, USDPHP at 46.34, from
47.06 in December 31, 2015
• We have no outstanding FX hedges.
Forward bookings
• As of March 28, 3-month forward bookings are
at 32.4% of total available seats. Total bookings
for the period is flat with only 0.1% increase
YOY
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Data source: Bloomberg
Data source: Bloomberg
43
44
45
46
47
48
49
LTM USDPHP Closing Rates
30
40
50
60
70
80
90
LTM Jet Kero Spot Price Index
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Fleet Expansion
• Current fleet of 56: 35 A320, 7 A319, 8 ATR 72-500, and 6 A330
• For balance of 2016 to 2022:
• Remaining order book of 3 A320, 30 A321 NEO, and 16 ATR 72-600• 7 A319 to be sold (2016-2018)• 7 A320 for lease return (2018-2019)• 8 ATR 72-500 to be replaced (2017-2018)
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Ave. fleet age(1)
4.84 years
(1) As of March 16, 2016
8 4 3 -
33 36 38
36
- -3 15 6 6 6
6 8 10
11
12 55 56
61
69
2015 2016 2017 2018
A319 A320 A321 A330 ATR
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