IndiGo Q4 profit drops 73% to Rs 118 crore on surging costs

IndiGo Q4 profit drops 73% to Rs 118 crore on surging costs

After trading hours on Wednesday, the airliner reported a net profit of R 117.64 crore for the quarter ended March 2018, down as much as 73.3% compared to year-ago quarter.

For the quarter, IndiGo saw its passenger ticket revenues at ₹5,019 crore, showing a robust increase of 17.9 per cent and ancillary revenues were ₹666 crore, recording an increase of 21.5 per cent compared to the same period a year ago.

The company announced on Friday that its president, Aditya Ghosh, would step down after 10 years with the company and it would consider naming Gregory Taylor, an airline sector veteran, as his successor in the coming months.

In the March 2018 quarter, higher jet-fuel prices led to a 33 per cent increase in IndiGo's fuel expenses over the same quarter previous year. Profit dropped to Rs 118 crore, from Rs 440 crore a year earlier, dragged down by higher expenses and fuel costs. For fiscal 18, the company's profit and revenue were Rs 2,242 crore and Rs 23,020 crore, registering a growth of 35.1 percent and 23.9 percent, respectively. This was primarily driven by rise in fuel cost, forex losses (booked a loss of Rs 925 million compared to a gain of Rs2.5 billion in the same quarter last year) and fall in passenger yields. These numbers are on a consolidated basis.

Rahul Bhatia, co-founder and interim CEO of the airline, during a conference call with the analysts said, "We have reported our highest-ever annual profits for fiscal 2018".

"We continue to seek route rights and other necessary regulatory approvals as may be required to operate long haul flights", Bhatia said.

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"Results include certain credits received from manufacturers to offset some of the impact of aircraft groundings and delivery delays", IndiGo said in a statement. It had a fleet of 159 planes at the end of March.

For FY19, Indigo expects year over year capacity increase in ASKs at 25%.

The company's Board of Directors recommended a dividend of Rs 6 per share. "We think it's a significant competitive advantage that it would create and would bring down our cost structure", he added.

Share price of Indigo tumbled by Rs 44 or 3.19% on BSE, after finishing at Rs 1,355 per piece.

IndiGo is the country's largest airline with a market share of almost 40 percent and operates around 1,000 flights daily.

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