Alliance Aviation Services (AQZ) H2 2024 earnings summary

Executive summary

• Revenue reached AUD 646.8 million (USD 646.8m), a 25% year-over-year increase, with EBITDA at AUD 178.4 million and profit before tax at AUD 86.3 million, driven by fleet expansion and increased asset utilization.

• Flight hours surged 39% to 104,545, with 97% under long-term contracts, and the operating fleet expanded to 72 aircraft out of 86 owned as of June 2024.

• Wet lease operations were the primary growth driver, with significant contract renewals and new client additions.

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

Financial highlights

• Wet lease revenue grew by 62% year-over-year to AUD 266 million (USD 265.7m), with 26 E190s operating for Qantas.

• Contract charter revenue rose 4% to AUD 309.8 million, with a 5% increase in flight hours and seven major contract renewals.

• Operating cash flow (excluding aircraft inventory) was AUD 109.3 million, with underlying cash flow at AUD 110 million after adjustments.

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

• EBITDA margin improved to 27.6%, up from 23.6% in FY2023.

Outlook and guidance

• Four additional aircraft to be deployed to Qantas in H1 FY25, with 12 aircraft deliveries expected in FY25 and further expansion planned through mid-2026.

• Capital expenditure for FY25 forecast at AUD 351 million (USD 282.2m), 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.

• Dividend payments deferred for 12–18 months until capital program concludes.

• Rockhampton maintenance facility to commence operations in October 2024, expected to deliver operational and financial benefits.