SpiceJet dips 2% after reporting Rs 593 crore loss in June quarter

Shares of SpiceJet dipped 2 per cent to Rs 52.40 on the BSE on Wednesday after the company reported a consolidated net loss of Rs 593 crore in the April-June quarter (Q1FY21), with air travel segment reporting loss of Rs 642 crore for the quarter. It had posted a net profit of Rs 261.7 crore in the same quarter of the previous year.

In the past three months, SpiceJet has underperformed the market by gaining 4 per cent, against 16 per cent rally in the S&P BSE Sensex.

The company’s operating revenue declined to Rs 515 crore for the reported quarter as against Rs 3,002 crore in the same quarter last year as flight operations remained suspended for most part of the quarter following the nationwide lockdown.

During the quarter, the company increased its focus on cargo as a result of which revenues from cargo increased by 144 per cent year on year (YoY) to Rs 166 crore while air transport service registered a degrowth of 88 per cent YoY to Rs 349 crore.

On the Ebitda (earnings before interest, taxes, depreciation, and amortization) front, loss was Rs 11 crore for the reported quarter as against profit of Rs 748 crore for the corresponding quarter last year. On an Ebitdar (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) basis, the profit was Rs 13.5 crore for the reported quarter as against profit of Rs 812 crore for the same quarter last year. 

The management said the present operating environment on account of Covid‐19 though does not reflect the true comparison of the current results with those of corresponding quarter last year.

“During the quarter the company maintained its 16 per cent market share with a load factor of 66 per cent despite the Covid-19 impact which resulted in 90 per cent year on year contraction in available seat kilometer or ASKM.  The numbers were along expected lines as it was expected that the company would post a loss in Q1FY21 given sharp fall in air traffic,” said Jyoti Roy - DVP- Equity Strategist, Angel Broking.

“SpiceJet was in urgent need of capital infusion even prior to Covid and the present crisis has only accentuated the liquidity crunch. SpiceJet continues to aggressively cut costs, re-negotiate contract terms and defer payments. However, there are material uncertainties on its ability to continue deferring its obligations and unwind them making the risk reward unfavorable,” analysts at Centrum Broking said in report dated July 31.