Cebu Air, Inc. st 1 Quarter 2016 Results of Operations
cebupacificair.com
Disclaimer 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 expected events will occur, that projections will be achieved, or that the Company and its management’s assumptions are correct.
16 May 2016
2
Business Updates
Operating Statistics • CEB flew 4.8M passengers in 1Q16, up 13.0% YOY • SLF posted at 86.7% from 78.9% in 1Q15
• ASK grew 8.0% to 6.5B while RPK grew faster to 5.4B, up 19.5% YOY • We utilized our airbus fleet 12.6 hours per day and turned them 6.2x per day • On-time performance (OTP) posted at 62.5% for 1Q16 • As of March 31, 2016: 64 destinations, 98 routes, and 2,641 weekly flights Load Factor
78.9%
5.4
84.5%
80.8%
5.8 4.9
1Q15
2Q15
4.7
3Q15 Passengers
86.7%
5.6
5.5
5.5 4.4
4.3
86.0%
4Q15
4.8
1Q16
Capacity
Passenger and capacity in millions
16 May 2016
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Domestic Market Average Domestic Market Share
59.5%
59.6%
59.0%
CEB Group PAL Group AirAsia Group
• • • • (1)1Q16
28.9%
28.6%
29.3%
11.1%
11.2%
11.2%
FY15
1Q15
1Q16
Highest market share at 59.0% in 1Q16(1) Most number of passengers carried and highest load factor Competitive performance index above 1 and highest among all carriers 34 destinations, 56 routes, and 2,147 weekly flights figures are based on internal estimates, the rest are from CAB
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Short Haul International
• • • •
Destination
Seat Share(1)
Hong Kong
29.5%
Singapore
32.9%
China
20.3%
CEB joins the world’s first pan-regional LCC alliance
SLF posted at 80.8% in 1Q16, up 3 ppts from 77.7% in 1Q15 25 short haul destinations, 37 routes, and 452 weekly flights Cebu Pacific and Cebgo, together with seven other low cost carriers in the region, form Value Alliance, the world’s largest LCC alliance. Firmed by 9 market champions, Value Alliance brings extensive networks together: 1. Cebu Pacific 4. Nok Air 7. Tigerair Singapore 2. Cebgo 5. NokScoot 8. Tigerair Australia 3. Jeju Air 6. Scoot 9. Vanilla Air
(1) From CAPA route capacity data for week of May 2, 2016
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Long Haul International Destination
Seat Share(1)
Dubai
31.3%
Sydney
38.5%
Kuwait
76.2%
Riyadh
18.8%
Doha
14.6%
•
Long haul posted 74.5% SLF in 1Q16, up 13.9 ppts from 60.6% in 1Q15
•
5 long haul destinations, 5 routes, and 42 weekly flights
•
Increase in Manila-Doha flights from 2x weekly to 3x weekly in July
(1) From CAPA route capacity data for week of May 2, 2016
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Financial Results
Income Statement Highlights Total Revenue (Php Million) Passenger Revenue Ancillary Revenue Cargo Revenue
1Q15 14,198 10,808 2,618 773
1Q16 16,106 12,022 3,248 836
YOY Change 13.4% 11.2% 24.1% 8.3%
Average Yield per Passenger Average Fare Ancillary/Passenger Cargo Yield per kg
3,137 2,525 612 21
3,158 2,486 672 24
0.7% -1.6% 9.8% 10.5%
Cost/ASK (CASK) CASK ex-Fuel
1.887 1.169
1.827 1.274
-3.2% 8.9%
(PHP million) EBITDAR EBIT Pre-tax Core Net Income Net Income
5,162 2,831 2,565 2,225
7,054 4,218 4,000 4,037
36.7% 49.0% 55.9% 81.4%
Margins EBITDAR Margin EBIT Margin Pre-tax Core Net Income Margin Net Income Margin
36.4% 19.9% 18.1% 15.7%
43.8% 26.2% 24.8% 25.1%
7.4 ppts 6.3 ppts 6.8 ppts 9.4 ppts
CASK down 3.2% from last year, driven by decline in fuel prices: •
Average MOPS down 39% from $68.98/bbl in 1Q15 to $42.10/bbl in 1Q16
CASK ex-Fuel up 8.9% driven by: •
Peso depreciation from P44.42/USD in 1Q15 to P47.27/USD in 1Q16 which also increased fuel, maintenance, and aircraft and traffic servicing costs, among others
•
Higher asset retirement obligation estimates and accruals
•
Higher aircraft and traffic servicing costs from growing international operations
16 May 2016
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Balance Sheet Highlights As at Dec 31, 2015
As at Mar 31, 2016
Current assets Noncurrent assets Total Assets
9,763 75,066 84,829
13,076 77,283 90,359
Total debt(1) Other liabilities Total Liabilities Total Equity
36,589 23,284 59,873 24,955
37,336 24,031 61,367 28,992
1.28x 2.48x 8% 47.06
0.99x 2.07x 15% 46.07
Php Millions
Net debt-to-equity(2) Adjusted net debt-to-equity(3) Cash-to-sales-LTM ratio Forex, closing
•
Cash level at P4.7B in 2015 vs. P8.6B in 1Q16
•
Property and equipment at P74.5B vs. P72.1B in 2015 due to two A320 aircraft additions and 1 A319 disposal
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 Php Millions CASHFLOWS FROM OPERATING ACTIVITIES Income after noncash adjustments Net changes in working capital Interest and taxes paid – net Net cash provided by operating activities
1Q2016 5,814 1,224 (344) 6,694
CASHFLOWS FROM INVESTING ACTIVITIES Acquisition of and proceeds from disposal of property and equipment and other noncurrent assets Increase in investment in joint venture Net cash used in investing activities
(4,306) (50) (4,356)
CASHFLOWS FROM FINANCING ACTIVITIES Availments of long term debt Repayments of long term debt Net cash provided by financing activities
3,421 (1,844) 1,577
Net foreign exchange difference NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, beginning
(40) 3,876 4,706
CASH AND EQUIVALENTS, END
8,582
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Outlook
Fuel, Forex and, Forward Bookings Fuel • As of May 13, 2016, Jet Kero at $53.84/bbl from $43.44/bbl in December 31, 2015 • Hedge ratio at 34% for 2016, 30% for 2017, and 11% for 2018.
LTM Jet Kero Spot Price Index 90 80 70 60 50 40
Forex • As of May 13, 2016, USDPHP at 46.56, from 47.06 in December 31, 2015 • We have no outstanding FX hedges. Forward bookings • As of May 16, 3-month forward bookings are at 27.6% of total available seats. Total bookings for the period is up by 12.3% YOY
30
Data source: Bloomberg
LTM USDPHP Closing Rates 49 48 47 46
45 44
Data source: Bloomberg
16 May 2016
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Fleet Expansion 69
59
12
10
11
6
Ave. fleet age(1)
6 -
6 3
15
4.82 years
36
38
36
8
4
2015
2016
1 2017
2018
55
56
8 6 33
A319
• • •
A320
A321
A330
ATR
Current fleet of 57: 36 A320, 7 A319, 8 ATR 72-500, and 6 A330 Remaining order book of 2 A320, 30 A321 NEO, and 16 ATR 72-600 For balance of 2016 to 2022: • 2 A320 CEO for delivery in 2017 • 7 A319 to be sold between 2016-2018 • 7 A320 for lease return in 2018-2019 • 16 ATR 72-600 for delivery from 2016-2020 • 30 A321 NEO to be delivered between 2017-2021 (1) As of May 12, 2016 16 May 2016
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Thank you
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