Chorus Aviation (CHR) Q2 2024 earnings summary

Executive summary

• Second quarter 2024 results reflect a strong, reliable business with improved cash generation and leverage ratio following the reclassification of the RAL segment to discontinued operations.

• Jazz has approximately CAD 1 billion in contracted revenue under its CPA, and Voyageur is experiencing steady growth, highlighted by a CAD 4.8 million revenue increase over Q2 2023.

• The sale of the RAL segment is progressing, expected to close before year-end, and is anticipated to significantly deleverage the capital structure and enhance financial flexibility.

• 1.4 million common shares were repurchased and cancelled under the NCIB during the quarter at an average price of CAD 2.15 per share.

• Reported net loss of $180.6 million, including a $187 million impairment on discontinued operations; net income from continuing operations was $8.5 million.

Financial highlights

• Operating revenue rose to $351.2 million in Q2 2024, up 7.3% year-over-year; six-month revenue was $709.8 million, up 9.6%.

• Adjusted EBITDA for continuing operations was CAD 51 million in Q2 2024, with year-to-date at CAD 105 million.

• Free cash flow for the quarter was CAD 28.2 million, primarily from operating activities.

• Adjusted net income available to common shareholders from continuing operations was CAD 0.01 per share, including debt and preferred equity costs.

• Pro forma adjusted net income per share from continuing operations would be CAD 0.08 for Q2 and CAD 0.17 for the first half, over five times the reported figures.

Outlook and guidance

• No consolidated 2024 guidance due to planned RAL sale; guidance for Jazz CPA and capital expenditures remains unchanged.

• Jazz's CPA provides a fixed margin regardless of flying levels, ensuring predictable earnings and Free Cash Flow.

• 2024 capital expenditures expected between $40.5 million and $55.5 million, including maintenance and aircraft improvements.

• Voyageur is on track to reach CAD 150 million in revenue by 2025, with continued contract growth expected.

• Focus remains on closing the RAL transaction, returning capital to shareholders, measured growth, and managing corporate costs.