Atlas Air posts 2Q loss but upbeat on remainder of the year

Atlas Air Worldwide Inc
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Atlas Air Worldwide Holdings is upbeat on the remainder of the year after reporting a second-quarter net loss of USD 21.2 million, down from 2Q 2017’s $38.9 million.

This then turned 2017’s $38.2 million profit into an $11.5 million loss for the first six months of the year 2018.

The loss, it said, was from an unrealised loss on outstanding warrants of $50 million, as well as a special charge of $9.4 million related to engines held for sale.

After adjustments, the company saw a 70.8 per cent increase in adjusted net income, to $49.7 million. Operating income rose 4.2 per cent to $60.9 million and total operating revenues increased 28.8 per cent to $666 million.

“Our volumes and revenue grew to new records in the second quarter, and while reported results were impacted by warrant accounting, our adjusted income and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were sharply higher,” said Bill Flynn, president and chief executive.

Revenue growth was supported by substantial growth in block hours for the ACMI, Cargo Charter, and Passenger Charter segments, Atlas said.

ACMI
ACMI block hours increased 18.8 per cent during the quarter as a result of increased flying for Amazon, the start-up of B747-400F flying for several new customers, and redeployment of a B747-8F from the charter segment to ACMI.

Atlas now has fifteen freighter-converted B767-300s operating for Amazon, and still plans to add five more into service for the e-commerce giant by the end of 2018.

Charter
Cargo charter block hours increased 23 per cent to 13,887 with Flynn noting that the nature of charter activity has changed for the company from what was typically a seasonal business peaking during the fourth quarter out of Asia, to what has now become a “52-week business” driven by robust commerce activity (particularly newly released consumer electronics), and serving other markets, as well as Asia.

Dry leasing
Dry leasing revenues increased 39.9 per cent during the quarter to $40.0 million, thanks to placement of additional B767-300Fs through the second half of 2017 and first-half 2018, as well as a B777F earlier in 2018.

Looking forward
“We expect to continue to build on our strong performance in the second half of 2018. Airfreight demand is solid and the global economy is growing. As a result of our strategic initiatives to grow and diversify our fleet, expand our customer base and enhance our business mix, we are meeting the growing needs of our customers, driving our results and extending our leadership in global aviation outsourcing,” he added.

For the full year, Flynn said he now expects revenue to exceed $2.6 billion. We project adjusted EBITDA to increase to more than $520 million. He also anticipates full-year adjusted net income will grow by 45-50 per cent compared with 2017, up from the company’s prior outlook of 35-40 per cent growth.

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