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Cargojet in second quarter loss despite revenue surge

Canada-based Cargojet, overnight airfreight operator, saw 2015 second-quarter revenues leap 69.6% to C$75.2m, due mainly to its new domestic airlift contract with Canada Post.

But the Toronto-listed company recorded a C$6.1m loss for the quarter and a C$14.4m for the half year to June 2015.

Ajay Virmani, president and chief executive, said: “Cargojet has successfully completed the integration of its new major customer in 2015, which has contributed to revenue growth in the quarter.

"Overall customer demand for Cargojet’s primary overnight network services and its air cargo charter services were softer than expected in the quarter and we continue to match capacity to actual demand, in order to keep operating costs in line.”

Gross margin was C$7.3m, an increase of 39.3% versus the previous year, and adjusted ebitda before one-time costs was C$10.9m, an increase 147.7%.

Virmani added: "One-time costs related to the expansion of our core overnight network that started in March 2015, for a major customer were in line with our planned expenditures.”

Cargojet operates its network across North America, using a fleet of all-cargo aircraft consisting of six Boeing 767-300ERFs, three 767-200ERFs, five Boeing 757-200ERFs and nine Boeing 727Fs.

As part of the Canada Post commitment, Cargojet took delivery in January this year of a leased 767-300 freighter and a second 767-300 freighter in March under an six year operating lease with a purchase option.

In an outlook, Cargojet said that it expects to retain all of its major customers and that demand on its core overnight network “will further improve with a stronger economy”.


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