IndiGo's parent InterGlobe Aviation saw its profit slump 25% to Rs 440.31 crore in the three months ended March 2017 as steep rise in fuel costs trimmed the bottom line even as revenues rose.
IndiGo's parent InterGlobe Aviation saw its profit slump 25% to Rs 440.31 crore in the three months ended March 2017 as steep rise in fuel costs trimmed the bottom line even as revenues rose.
Its profit after tax stood at Rs 583.78 crore in the January-March period of 2016.
The carrier -- which has inked a pact to purchase 50 ATR aircraft worth $1.3 billion as part of the regional air connectivity push -- had higher revenue from operations to the tune of Rs 4,848.22 crore during the latest January-March quarter.
In the year-ago period, the same stood at Rs 4,090.68 crore, according to a release.
For the latest quarter, total revenue rose over 20% to Rs 5,141.99 crore while passenger revenue climbed nearly 21% to Rs 4,258.45 crore.
However, significant jump in total expenses -- primarily fuelled by increased fuel costs -- pulled down the profit.
The company's total expenses in the fourth quarter of the last fiscal jumped nearly 31% to Rs 4,523.04 crore as against Rs 3,458.20 crore in the same period a year ago.
According to the release, fuel costs in the fourth quarter surged 71% to Rs 1,750.51 crore.
"For the last quarter, despite a 38% year-over- year increase in fuel prices, we have reported a profit after tax of Rs 4.4 billion," IndiGo President and Whole Time Director Aditya Ghosh said.
The company's board has recommended a dividend of Rs 34 per share for the fiscal 2017.
Revenue from operations went up 15% to Rs 18,580.5 crore for the year ended March.
During this period, profit after tax stood at Rs 1,659.19 crore. This is a decline of about 17% compared to Rs 1,986.16 crore in the same period a year ago.
IndiGo had a fleet of 131 planes, including 19 A320 neos as on March 31, 2017.
The airline said it expects to have a "fleet of 170 A320 aircraft at the end of fiscal year 2018".
At the end of March 2017, IndiGo's total cash balance stood at Rs 9,343.2 crore -- comprising Rs 4,432.6 crore of free cash and Rs 4,910.6 crore of restricted cash.
During the same period, the total debt was Rs 2,596.2 crore and the entire amount is related to aircraft, according to the release.
A term sheet has been signed between IndiGo and Avions de Transport Regional GIE (ATR) for purchasing 50 ATR 72-600 aircraft worth USD 1.3 billion.
About the performance of A320 neos, which have been facing engine issues, Ghosh said these planes are giving fuel savings of 15% compared to A320 classics.
Noting that there were two significant operational concerns around the neo engines, he said one pertains to combustion chamber and another relates to a bearing in the engine.
"An improved combustion chamber is expected to be available in the fourth quarter of this calendar year.
However, Pratt & Whitney is working on further design improvements which will be retro-fitted on the engines later," he said during an analysts call to discuss the latest quarterly results.
On the second concern, Ghosh said Pratt & Whitney has come out with an improvement package.
"This includes necessary software and hardware changes.
This change has now been carried out on all IndiGo A320 aircraft engines... Pratt & Whitney will continue to work with us to improve operational reliability," he said.
According to him, Pratt & Whitney is working on further design improvements which would be retrofitted in the engines later.
Ace investor Rakesh Jhunjhunwala also participated in the call.
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