Cargojet (CJT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 14.8% year-over-year to $245.6 million, driven by strong charter and international demand, with domestic network, ACMI, and charter revenues up 15.6% to $205.4 million.

• Adjusted EBITDA grew 17.4% year-over-year to $82.2 million, with adjusted EPS at CAD 1.48 versus CAD 0.15 last year.

• Net earnings surged 182.9% to $29.7 million compared to Q3 2023.

• Block hours increased nearly 15% with no net fleet growth, reflecting high utilization and operational efficiency.

• Maintained best-in-class on-time performance at 98.7% for Q3.

Financial highlights

• Free cash flow reached CAD 47.8 million, up 60.4% year-over-year.

• Gross margin improved to 25.4% from 15.7% in Q3 2023, a 9.7 percentage point increase.

• Adjusted net earnings reached $23.6 million, up from $2.6 million, and adjusted EPS was $1.48 versus $0.15 year-over-year.

• Net cash from operating activities was $96.2 million, up from $38.5 million in Q3 2023.

• SG&A expenses rose to CAD 24.3 million from CAD 15.2 million, mainly due to IT, professional services, and increased salaries.

Outlook and guidance

• Expect continued strong peak season volumes in Q4, with additional scheduled charters and robust domestic demand.

• Two 767-300 aircraft to join the fleet in 2025, providing further growth flexibility.

• Growth CapEx for FY 2024 projected at CAD 70–80 million, slightly above prior guidance due to faster revenue growth.

• Margins expected to remain stable or slightly decrease due to permanent cost increases, despite normalization of some one-time costs.

• Management expects a stable and optimistic economic environment in Canada, supporting future domestic volumes.