Alliance Aviation Services (AQZ) H2 2024 earnings summary

Executive summary

• Revenue reached AUD 646.8 million, up 25% year-over-year, with EBITDA at AUD 178.4 million and PBT at AUD 86.3 million, slightly above consensus, driven by fleet expansion and increased asset utilization.

• Flight hours surged 39% to 104,545, with 72 aircraft in service and 86 owned as of June 2024.

• 97% of flights operated under long-term contracts, with significant growth in wet lease and aviation services revenue.

• On-time performance remained strong at 94%, supporting contract renewals and competitive advantage.

Financial highlights

• Wet lease revenue grew by 62% to AUD 266 million, with 26 E190s operating for Qantas.

• Contract charter revenue rose 4%, with a 5% increase in flight hours and seven major contract renewals.

• Operating cash flow was AUD 109.3 million, with underlying cash flow at AUD 110 million after adjusting for part-out aircraft; free cash flow was negative at $(90.4)m due to significant capex.

• Net debt as of June 30 was AUD 305.9 million, reflecting ongoing fleet investment.

• Net profit after tax rose 66% to AUD 60.5 million; basic EPS up 66% to 37.61 cents.

Outlook and guidance

• Four additional aircraft to be deployed to Qantas in H1 FY25, with further fleet expansion planned.

• Capital expenditure for FY25 forecast at AUD 351 million, including 12 E190s and new hangar acquisitions.

• Leverage ratio expected to peak at 2.4x in December 2024, then decline as cash flow improves and aircraft purchases complete.

• No dividend declared for FY2024; dividend payments deferred for 12–18 months until capital program concludes.