Rex has reported an after-tax loss of $11.3 million for the six months ending December 31, 2022. Rex posted its financial transactions in the first half of financial year FY23 ending on June 30, 2023. The airline said that while the loss is disappointing, the result is a 55% improvement as compared to the same time last year (1HFY22).
"A negative impact of $15.7 million related to mark-to-market valuation of the Convertible Note and Warrant facility entered into with PAG in 2020. This loss is not cash in nature and was brought about by the increase in value of Rex's shares," said Rex in a statement.
Rex further added that its cash in the bank almost doubled as compared to the same time last year.
For the six months, revenue excluding government grants improved by 282% year on year, and the government grants and subsidies declined by 93% to $1.3 million. Passenger revenue was $199.1 million, and total group revenue excluding joint-venture reached $231.7 million.
Meanwhile, Rex has resumed its domestic services on Boeing 737 since has been recording profts since September 2022. Rex currently operates seven Boeing 737-800s on domestic routes, but based on surging demand, it has added two more 737s to its fleet in June and July.
On the regional side, Rex has time and again blamed Qantas for entering the regional routes that Rex was operating forcing Rex to close a number of routes due to predatory pricing anf capacity dumping. Qantas has denied this and the two airlines are at loggerheads ever since.
“Our regional operations had been affected due to Qantas' predatory behaviour in entering routes that are too small to support two operators,” Rex said in a statement.
Commenting on the overall results, Lim Kim Hai, Executive Chairman said: “The results are pleasing considering that domestic jet services only really operated in a relatively COVID-free environment since late February 2022. To achieve profitability in such a short period under a normal environment is fairly unprecedented in the world."
Rex Group has shown an optimistic outlook going ahead. In the investor presentation submitted to the Australian Stock Exchange, Rex said: "barring any further external shocks, the Rex Board is cautiously optimistic that the Rex Group will be operationally profitable in FY23 due to the positive developments cited."