Strong results announced by Atlas Air Worldwide

victoria@aviationnews-online.com
By victoria@aviationnews-online.com August 2, 2018 14:15

Strong results announced by Atlas Air Worldwide

Atlas Air Worldwide has announced strong second-quarter 2018 business growth and raised its outlook for full-year 2018, driven by market strength and increased customer demand.

“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 EBITDA were sharply higher,” said President and Chief Executive Officer William J. Flynn. “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.

“For the full year, we now expect our revenue to exceed $2.6 billion. We project adjusted EBITDA to increase to more than $520 million. And we anticipate our full-year adjusted net income will grow by 45% to 50% compared with 2017, up from our prior outlook of 35% to 40% growth.”

Volumes in the second quarter of 2018 increased 19% to a record 72,660 block hours, with revenue growing 29% to a record $666.1 million.

A reported loss from continuing operations, net of taxes, of $21.1 million, or $0.83 per diluted share, during the period compared with reported income of $39.0 million, or $0.92 per diluted share, in the second quarter of 2017. Reported results in the second quarter of 2018 included an unrealized loss on outstanding warrants of $50.0 million compared with an unrealized gain on outstanding warrants of $13.8 million in the year-ago period, as well as a special charge of $9.4 million related to engines held for sale.

On an adjusted basis, income from continuing operations, net of taxes, in the second quarter of 2018 increased $20.6 million to $49.7 million, or $1.75 per diluted share, from $29.1 million, or $1.09 per diluted share, in the year-ago quarter. Adjusted EBITDA increased $23.1 million over the year-ago period to $125.5 million.

Reported and adjusted results for the second quarter included an after-tax benefit of $6.8 million related to a refund of aircraft rent paid in previous years. Reported and adjusted results for the period also included an after-tax benefit of $3.1 million mainly related to the timing of non-heavy maintenance expense initially expected to occur in the second quarter that is now anticipated to take place in the third quarter.

ACMI segment contribution in the second quarter of 2018 was relatively unchanged from the prior-year period, as a significant increase in block-hour volumes and a higher average rate per block hour were offset by higher heavy maintenance expense and amortization of deferred maintenance costs. Block hours grew 19% during the period, reflecting increased 767 flying for Amazon, the start-up of 747-400 flying for several new customers, and the redeployment of 747-8F aircraft from the Charter segment to ACMI. The increase in the average rate during the quarter primarily reflected the impact of increased 747-8F and 747-400F flying for new customers.

Higher Charter segment contribution during the period was primarily driven by increases in military cargo and passenger demand, an increase in commercial cargo volumes, and higher aircraft utilization, partially offset by the redeployment of 747-8 aircraft to the ACMI segment. Higher average rates during the quarter primarily reflected higher fuel prices and the impact of Charter capacity purchased from ACMI customers that had no associated Charter block hours.

In Dry Leasing, higher segment contribution primarily reflected the placement of additional 767-300 converted freighter aircraft throughout the second half of 2017 and first half of 2018, as well as the placement of a 777-200 freighter in early 2018.

Higher unallocated income and expenses, net during the quarter primarily reflected an increase in unallocated interest expense, fleet growth initiatives, and amortization of a customer incentive asset.

victoria@aviationnews-online.com
By victoria@aviationnews-online.com August 2, 2018 14:15