In This Article:
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Aggregate Consideration from Sale: $2 billion.
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Net Proceeds from Sale: USD 607.7 million.
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Repayment of Series A Debentures: $86.3 million.
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Redemption of Preferred Shares: USD 363 million.
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Leverage Ratio: Reduced to 1.4 from 3.3 at the end of 2023.
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Free Cash Flow (Q4 2024): $27.5 million.
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Annual Free Cash Flow (2024): $118.8 million.
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Adjusted EBITDA (Q4 2024): $52.7 million.
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Adjusted EBITDA (2024): $211.6 million.
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Adjusted Earnings per Share (Q4 2024): $0.39.
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Adjusted Earnings per Share (2024): $1.04.
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Impairment Provisions: $10.5 million on Dash 8-300's.
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Covered Aircraft Reduction (2024-2026): From 114 to 80 minimum covered aircraft.
Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Cygnet Aviation, Chorus Aviation Inc's pilot training academy, is expanding its industry partnerships and growing its free agent enrollment, contributing to a solid flow of airline-ready first officers.
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The company successfully consolidated its shares, which is expected to make them more attractive to a wider range of potential investors.
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Chorus Aviation Inc has a strong balance sheet with low leverage and strong contracted cash flows, positioning it well during economic uncertainty.
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The sale of the leasing segment resulted in significant proceeds, allowing the company to repay outstanding debts and improve its financial flexibility.
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Voyageur, a subsidiary of Chorus Aviation Inc, is experiencing growth in parts sales and defense contracts, contributing to diversified sales avenues.
Negative Points
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The company recorded impairment provisions of $10.5 million on non-operational Dash 8-300 aircraft, indicating potential asset write-downs.
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There is uncertainty regarding the future use of aircraft coming off lease with Air Canada, which could impact asset utilization and revenue.
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The reduction in covered aircraft under the CPA from 114 to 80 by 2026 could affect operational scale and revenue generation.
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The company faces challenges in optimizing the value of unused aircraft if CPA leases are not extended, which could impact financial returns.
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Despite strong financial performance, the company is still in the process of stabilizing and cleaning up its balance sheet post-sale, which may delay new growth initiatives.
Q & A Highlights
Q: Can you discuss Chorus Aviation's medium and long-term strategy, particularly regarding opportunities outside of the CPA and potential M&A activities? A: Colin Copp, President and CEO, explained that the company has been focused on cleaning up its balance sheet following a recent sale transaction. In the short term, the focus is on strengthening existing businesses. For the long term, they are exploring growth opportunities, including potential acquisitions, although nothing specific is currently planned.