LONDON (Alliance News) - Fastjet PLC on Tuesday said its revenue grew significantly in 2018, but earnings in the first quarter of its current financial year were hurt by cyclones and the monetary policy changes in Zimbabwe.
The stock was trading 5.1% higher on Tuesday at 1.50 pence a share.
The low-cost African airline said revenue more than doubled to USD38.3 million in 2018 from USD14.4 million a year earlier, driven by a sharp increase in passenger numbers in Zimbabwe and Mozambique.
Fastjet's fleet currently consists of four 50-seat Embraer ERJ 145 aircraft deployed under the Fastjet brand in Zimbabwe and Mozambique and 14 smaller gauge aircraft, four owned and the remainder leased.
The company said it incurred an operating loss of USD41.2 million for the year, widened compared to USD11.2 million loss in 2017 as a result of one off exceptional items which arose from the capital raise in December 2018. The loss excluding this exceptional item totalled USD17.3 million.
Fastjet's divesture from its operations in Tanzania concluded in November 2018, resulting in the de-consolidation of USD27.2 million in revenue and USD15.8 million in after tax losses.
More positively, future aircraft lease obligations related to Tanzania were terminated, resulting in a saving of USD25.1 million on the E190s and USD41.4 million on the ATR72's being removed from the company's future obligations.
Three months to the end of March represent a seasonally weaker demand period, Fastjet explained, and were further impacted by cyclones Desmond and Idai in Mozambique, and by fuel protests and currency volatility in Zimbabwe.
As a result, underlying net operating loss in the first quarter was USD200,000 on revenue of USD9.5 million versus USD7.8 million loss on revenue of USD13.8 million a year prior.
The underlying loss in the first quarter of 2019 excluded a one-off exchange loss of USD6.2 million in Zimbabwe, the company said, linked to the monetary policy announced by the Reserve Bank of Zimbabwe, introducing a new local RTGS currency, devaluing Fastjet's local bank balances.
Looking ahead, Fastjet said it expects 2019, to be a "marginally profitable year" at an underlying level, excluding the one-off foreign exchange losses in Zimbabwe.
"Despite the impact of cyclones in Mozambique at the start of the current year and continued fuel protests and currency volatility in Zimbabwe, Fastjet is making progress and expects to generate a marginal underlying operating profit for 2019, with further route expansion planned for Zimbabwe in the second half of the coming year, as well as a brand entry into South Africa in 2020," said Chief Executive Nico Bezuidenhout.
The company concluded its investment in charter and shuttle services operator Federal Airlines in October 2018, providing a platform for entry into the South African market.
Fastjet expects to publish its 2018 results in June.
