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 business despite a challenging North American freight environment.

• Net earnings surged 182.9% to $29.7 million, and adjusted EBITDA increased 17.4% to $82.2 million year-over-year.

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

• Free cash flow for the quarter was $47.8 million, up 60.4% year-over-year.

• Management highlighted a stable economic outlook for Canada and ongoing cost pressures in aviation and supply chain.

Financial highlights

• Q3 revenue up 14.8% year-over-year; domestic revenue grew 5.2%, ACMI up 12%, and All-In Charters up 60.2%.

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

• Adjusted EPS for Q3 was $1.48, with year-to-date adjusted EPS at $3.59 versus $1.71 prior year.

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

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

Outlook and guidance

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

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

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

• Management remains confident in ability to grow revenues 15–20% with current fleet, with further upside from new aircraft.

• Continued focus on cost rationalization, margin improvement, and capital discipline to drive shareholder value.