Annual Highlights:
- Completed the sale of the RAL business with net proceeds of US $607.7 million in cash.
- Leverage Ratio improved to 1.4 at December 31, 2024 from 3.3 at December 31, 2023.
- Net loss from continuing operations of $15.8 million.
- Adjusted Earnings available to Common Shareholders of $28.5 million.
- Adjusted Earnings available to Common Shareholders of $1.04 per Common Share, basic.
- Adjusted EBITDA of $211.6 million.
- Free Cash Flow of $118.8 million.
- Parts sales, contract flying, MRO and other revenue of $128.3 million primarily driven by Voyageur.
Q4 Financial Highlights:
- Net loss of $6.6 million.
- Net loss from continuing operations of $49.4 million.
- Adjusted Earnings available to Common Shareholders of $10.6 million.
- Adjusted Earnings available to Common Shareholders of $0.39 per Common Share, basic.
- Adjusted EBITDA of $52.7 million.
- Free Cash Flow of $27.5 million.
- Parts sales, contract flying, MRO and other revenue of $35.9 million primarily driven by Voyageur.
Share Consolidation
- Effective February 5, 2025, Chorus consolidated its Common Shares on the basis of one post-consolidation Common Shares for every seven pre-consolidation Common Shares (the “Share Consolidation”). Unless otherwise stated, all per-Common Share figures in this new release are reported on a post-Share Consolidation basis.
HALIFAX, NS, Feb. 19, 2025 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) today announced its fourth quarter and year-end 2024 financial results.
“We took a significant step this past year to strengthen Chorus and unlock value with the sale of the RAL business in December,” said Colin Copp, President and Chief Executive Officer, Chorus. “Combined with the significant reduction in debt and corporate financings, reduced interest and preferred dividend costs, the transaction positions Chorus for improved earnings and cash flows, as we renew our focus on growing our aviation services business.”
“Our fourth quarter delivered strong and consistent results that were in line with our expectations,” said Mr. Copp. “The Jazz team continued to deliver strong cash flows under its CPA with Air Canada, while Voyageur grew its position within the special mission, parts sales and specialty MRO spaces, delivering on its growth targets for the year. Cygnet, our pilot aviation academy, made great progress welcoming its seventh cohort recently and graduating pilots who moved into careers with Jazz as first officers, as it also builds key industry partnerships for future growth.”
“Since the sale of the RAL business, we have accelerated the pace of share repurchases under our NCIB, investing $10.0 million during this period,” said Mr. Copp. “With a stronger balance sheet and cash flows post the RAL sale, we are monitoring market conditions and evaluating opportunities to best enhance shareholder returns. As we move forward, we are committed to driving long-term value for our shareholders while strengthening our overall business.”
Fourth Quarter Summary
In the fourth quarter of 2024, Chorus reported Adjusted EBITDA from continuing operations of $52.7 million, a decrease of $2.0 million compared to the fourth quarter of 2023 primarily due to:
- a decrease in aircraft leasing revenue under the CPA of $2.4 million primarily due to a change in lease rates on certain aircraft; and
- an increase in general administrative expenses primarily attributable to increased operations; and
- an increase in stock-based compensation of $1.4 million due to an increase in the Common Share price offset by the change in fair value of the Total Return Swap; partially offset by
- an increase in Voyageur’s parts sales, contract flying and MRO activity;
- an increase in capitalization of major maintenance overhauls on owned aircraft of $2.4 million; and
- an improvement in the Controllable Cost Guardrail of $2.0 million.
Adjusted Net Income from continuing operations was $10.6 million for the quarter, in line compared to the fourth quarter of 2023 primarily due to:
- a $2.0 million decrease in Adjusted EBITDA as previously described; and
- an increase in depreciation expense of $4.0 million primarily attributable to a change in depreciation estimates on certain aircraft and capital expenditures; partially offset by
- a positive change in foreign exchange of $3.2 million;
- a decrease of $1.7 million in income tax expense; and
- a decrease in net interest costs of $0.8 million, inclusive of a $3.7 million interest charge related to the acceleration of the amortization of the deferred financing costs related to the Series B Debentures and Series C Debentures.
Net loss from continuing operations increased $77.7 million compared to the fourth quarter of 2023 primarily due to:
- a realized foreign exchange loss on the settlement of Preferred Shares of $31.3 million;
- a reduction in realized foreign exchange gains related to the settlement of intercompany loans in 2023 of $26.4 million;
- a negative change in net unrealized foreign exchange of $13.8 million;
- impairment provisions of $10.5 million primarily related to planned part-out of Voyageur’s non-operational owned aircraft;
- interest accretion on Preferred Shares of $10.4 million; and
- an increase in employee separation program costs of $1.0 million; partially offset by
- a realized foreign exchange gain of $13.7 million related to US dollar denominated cash held between the dates December 6, 2024 and December 31, 2024 being the dates Chorus received the net proceeds from the Transaction and the redemption of the Preferred Shares, respectively; and
- an increase in income tax recovery on adjusted items of $2.2 million.
Annual Summary
Chorus reported Adjusted EBITDA from continuing operations of $211.6 million for the year ended December 31, 2024, a decrease of $10.0 million compared to the same prior year period primarily due to:
- a decrease in aircraft leasing revenue under the CPA of $15.7 million primarily due to a change in lease rates on certain aircraft;
- an increase in stock-based compensation of $3.6 million due to an increase in the Common Share price offset by the change in fair value of the Total Return Swap; and
- an increase in general administrative expenses primarily attributable to increased operations; partially offset by
- an increase in capitalization of major maintenance overhauls on owned aircraft of $6.4 million;
- an improvement in the Controllable Cost Guardrail of $4.0 million; and
- an increase in Voyageur’s parts sales, contract flying and MRO activity.
Adjusted Net Income from continuing operations of $46.3 million, a decrease of $5.7 million compared to the same prior year period primarily due to:
- a $10.0 million decrease in Adjusted EBITDA as previously described; and
- an increase in depreciation expense of $14.4 million primarily attributable to a change in depreciation estimates on certain aircraft and capital expenditures; partially offset by
- a decrease of $11.9 million in income tax expense; decrease in net interest costs of $3.7 million, inclusive of a $3.7 million interest charge related to the acceleration of the amortization of the deferred financing costs related to the Series B Debentures and Series C Debentures.; and
- a positive change in net foreign exchange of $2.9 million.
Net loss from continuing operations of $15.8 million, an increase of $117.4 million compared to the same prior year period primarily due to:
- the previously noted decrease in Adjusted Net Income of $5.7 million;
- a realized foreign exchange loss on the settlement of Preferred Shares of $31.3 million;
- the Defined Benefit Pension Revenue recognized in 2023 of $29.9 million (Air Canada agreed to compensate Jazz for the one-time impact of the wage increase on the Jazz defined benefit pension plan);
- a reduction in realized foreign exchange gains related to the settlement of intercompany loans in 2023 of $26.4 million;
- a negative change in net foreign exchange of $26.0 million;
- impairment provisions of $10.5 million primarily related to planned part-out on Voyageur non-operational owned aircraft;
- interest accretion on Preferred Shares of $10.4 million; and
- an increase in employee separation program costs of $1.1 million; partially offset by
- a realized foreign exchange gain of $13.7 million related to US dollar denominated cash held between the dates December 6, 2024 and December 31, 2024 being the dates Chorus received the net proceeds from the Transaction and the redemption of the Preferred Shares, respectively; and
- an increase in income tax recovery on adjusted items of $10.3 million.
Portfolio of Aircraft Leasing under the CPA
- Current fleet of 48 wholly-owned aircraft and five spare engines
- Current net book value of $793.4 million
- Future contracted lease revenue US $385.4 million
- Current weighted average fleet age of 8.5 years
- Current weighted average remaining lease term of 4.9 years
- Long-term debt of $347.3 million (US $241.4 million)
- 100% of debt has a fixed rate of interest
- Current weighted average cost of borrowing of 3.32%
About Chorus Aviation Inc.
Chorus is a Canadian company focused on aviation services businesses. Our operating subsidiaries are: Jazz Aviation, the largest regional operator in Canada and provider of regional air services under the Air Canada Express brand; Voyageur Aviation, a leading provider of specialty charter, aircraft modifications, parts provisioning and in-service support services; and Cygnet Aviation Academy, an industry leading accredited training academy preparing pilots for direct entry into airlines. Together, Chorus’ subsidiaries provide services that encompass every stage of an aircraft’s lifecycle, including: aircraft acquisition and leasing; aircraft refurbishment, engineering, modification, repurposing and transition; contract flying; aircraft and component maintenance, disassembly, and parts provisioning; and pilot training.