WestJet reports first quarter results

Airline flies a record number of guests and achieves its 48th consecutive profitable quarter

CALGARY, May 2, 2017 /PRNewswire/ - WestJet (TSX: WJA) today announced its 48th consecutive profitable quarter, with first quarter 2017 net earnings of $48.3 million, or $0.41 per diluted share. This compares with quarterly net earnings of $87.6 million, or $0.71 per diluted share reported in the first quarter of 2016. These first quarter 2017 results include a pre-tax non-cash adjustment to its maintenance provision of $18.5 million and irregular operations related costs of $7.0 million due to severe winter weather experienced in the quarter. Based on the trailing twelve months, the airline achieved a return on invested capital of 10.0 per cent, compared with the 11.3 per cent reported in the previous quarter.

"We are pleased to report strong topline revenue growth and our first positive unit revenue (RASM) performance in eight quarters. We are seeing good results from Plus, our premium economy product, growth in our WestJet Rewards program and penetration into the business traveller segment all of which gives us confidence that RASM will continue to improve for the remainder of the year," said WestJet President and CEO Gregg Saretsky. "I want to thank our over 12,000 WestJetters for their continued dedication to safely providing our growing number of guests with WestJet's award-winning brand of friendly caring service, especially given the challenging winter weather conditions we endured in the quarter."

Operating highlights (stated in Canadian dollars)

 

Dividend declarationOn May 1, 2017, WestJet's Board of Directors declared a cash dividend of $0.14 per common voting share and variable voting share for the second quarter of 2017, to be paid on June 30, 2017, to shareholders of record on June 14, 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 informationCertain information set forth in this news release, including, without limitation, information regarding us seeing good results from Plus, our premium economy product, growth in our WestJet Rewards program and penetration into the business traveller segment all of which gives us confidence that RASM will continue to improve for the remainder of the year, 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 at sedar.com. 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.

Non-GAAP measuresThis 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 months ended March 31, 2017, which is available under WestJet's profile on SEDAR at sedar.com, 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.

Management's discussion and analysis of financial results and consolidated financial statements and notes for the three months ended March 31, 2017, are available through the Internet in the Media and Investor Relations section of westjet.com or under WestJet's SEDAR profile at sedar.com.

Analyst conference callWestJet will hold its quarterly analysts' conference call today, May 2, 2017, at 8 a.m. MDT (10 a.m. EDT). President and CEO Gregg Saretsky and Executive Vice-President of Finance and CFO Harry Taylor will discuss WestJet's first quarter results and answer questions from financial analysts and members of the media. The conference call will be available in Toronto by calling 416-915-3239, in Vancouver by calling 604-638-5340 and across Canada and the United States through the toll-free telephone number 1-800-319-4610. The call can also be heard live through an Internet webcast accessible via the Media and Investor Relations section of westjet.com.

Annual meeting of shareholders (AGM)WestJet will hold its AGM today, May 2, 2017, at 10 a.m. MDT (12 p.m. EDT) at WestJet's Calgary Campus at 22 Aerial Place NE. The AGM webcast will be available live in the Media and Investor Relations section of westjet.com.

About WestJetWe are proud to be Canada's most trusted airline, powered by an award-winning culture of care and recognized as one of the country's top employers. We offer scheduled service to more than 100 destinations in North America, Central America, the Caribbean and Europe. Through our regional airline, WestJet Encore, and with partnerships with airlines representing every major region of the world, we offer our guests more than 150 destinations in more than 20 countries. Leveraging WestJet's extensive network, flight schedule and remarkable guest experience, WestJet Vacations delivers affordable, flexible travel experiences with a variety of accommodation options for every guest. Members of our WestJet Rewards program earn WestJet dollars on flights, vacation packages and more. Our members use WestJet dollars towards the purchase of WestJet flights and vacations packages on any day, at any time, to any WestJet destination with no blackout periods  ̶  even on seat sales. For more information about everything WestJet, please visit westjet.com. 

Recent recognition includes:2017 Best Airline in Canada and Travellers' Choice Winner Mid-Sized and Low-Cost Airlines – North America (TripAdvisor Travellers' Choice awards for airlines)2016 Canada's Most Trusted Airline (Gustavson School of Business at the University of Victoria)2016 Canada's most reputable company for Corporate Social Responsibility (Reputation Institute)2016/2015/2014/2013/2012 Ranked top three for Canadian Brands (Canadian Business Magazine)2016/2015/2014/2013 WestJet RBC World Elite MasterCard ranked #1 in Canada (MoneySense magazine)2015/2011/2010/2008/2007/2006/2005 Canada's Most Admired Corporate Culture (Waterstone Human Capital)2015 Best Employers in Canada (Aon Hewitt)

Connect with WestJet on Facebook at facebook.com/westjetFollow WestJet on Twitter at twitter.com/westjetSubscribe to WestJet on YouTube at youtube.com/westjetRead the WestJet blog at blog.westjet.com

Condensed Consolidated Statement of EarningsFor the three months ended March 31(Stated in thousands of Canadian dollars, except per share amounts)(Unaudited)

 

Condensed Consolidated Statement of Financial Position(Stated in thousands of Canadian dollars)(Unaudited)

 

Condensed Consolidated Statement of Cash FlowsFor the three months ended March 31 (Stated in thousands of Canadian dollars)(Unaudited)

 

CASM, excluding fuel and employee profit share

(Stated in thousands of Canadian dollars, except percentage, mile and per unit data)(Unaudited)

WestJet excludes the effects of aircraft fuel expense and employee profit share expense to assess the operating performance of the business. Fuel expense is excluded from operating results due to the fact that fuel prices are impacted by a host of factors outside WestJet's control, such as significant weather events, geopolitical tensions, refinery capacity and global demand and supply. Excluding this expense allows WestJet to analyze its operating results on a comparable basis. Employee profit share expense is excluded from operating results due to its variable nature and excluding this expense allows greater comparability.

 

Return on invested capital

(Stated in thousands of Canadian dollars, except percentages)(Unaudited)

ROIC is a measure commonly used to assess the efficiency with which a company allocates its capital to generate returns. Return is calculated based on our earnings before tax, excluding special items, finance costs and implied interest on our off-balance-sheet aircraft leases. Invested capital includes average long-term debt, average finance lease obligations, average shareholders' equity and off-balance-sheet aircraft operating leases.

 

SOURCE WestJet