Chorus Aviation swings to $180 million net loss in second quarter

Chorus Aviation has reported a net loss of C$180.6 million ($131.8 million) in the second quarter of 2024, swinging from its net profit of C$20.3 million ($14.8 million) in the same period last year. The company said the net loss included a ""previously disclosed C$187 million impairment on discontinued operations"". It disclosed at the end of last month that it would sell off its regional aircraft business for C$1.9bn ($1.4bn) to HPS Investment Partners. The net proceeds would equal C$814 million ($594.1 million). The sale is expected to close at the end of the year and will help stabilise and support its growth. Post-transaction, Chorus will have one reportable operating segment. Chorus CEO and president Colin Copp commented: ""While we have seen consistent and steady progress over the last several quarters to help strengthen our balance sheet, the divestiture of the [regional aircraft] segment will, when completed, unlock the embedded equity value in our business and provide the needed catalyst to enable us to invest in future growth and implement a sustainable return of capital program for our shareholders."" Operating revenues climbed 7.3% to C$351.2 million ($256.3 million), while its expenses rose 9.6% to C$326.8 million ($238.5 million). Its operating income was down 16.8% to $24.4 million ($17.8 million). The company said these were driven by a decrease in aircraft leasing revenue due to change in lease rates on certain aircraft, an increase in general administrative costs, and an increase in stock-based compensation. Chorus recorded an adjusted EBITDA of C$51 million ($37.2 million), down 4.5% from last year's second quarter. Adjusted net income was somewhat flat at C$11.2 million ($8.2 million), compared to C$11.7 million ($8.5 million) a year prior. ""We maintained focus on creating shareholder value throughout the quarter, buying back 1.4 million of our common shares under the NCIB,"" commented Copp. ""Our aviation services businesses continued to generate consistent and strong cash flows"". Its services segment Voyageur increased its revenues by C$4.8 million ($3.5 million) in the quarter, compared to the same quarter last year. At the end of the quarter, its adjusted net debt was C$647 million ($472.2 million) with a leverage ratio of 3.0. During the quarter, it generated a free cash flow of C$28.2 million ($20.6 million).