Canada's Discovery Air continues to improve with profits
Canada-based Discovery Air finished Fiscal 2011 with CAD37.6 million in EBITDA, up from the CAD28.8 posted in Fiscal 2010. However, in its fourth quarter it showed an EBITDA CAD2.1 million loss, narrowed from the CAD2.3 million in its previous fiscal year. Loss for the fourth quarter was CAD6.4 million compared to a loss of CAD4.8 million for the same period last year.
Net earnings, said the company which posted earnings yesterday, reached CAD5.5 million compared to a loss of CAD300,000 in 4Q2010. For the quarter, revenues rose to CAD23.7 million from CAD17.7 million in the year-ago period.
"We are very pleased to report that Discovery Air's Fiscal 2011 results continued the improving trend that commenced in fiscal 2010," said the company. "Fiscal 2011 revenues increased 24% to just over CAD152 million, a record level, compared to CAD123.2 million in Fiscal 2010. Revenue growth was accompanied by further improvement in our EBITDA performance, both in dollar terms and as a percentage of revenues, reflecting our focus on delivering high-value services to our customers while maximising asset utilisation and aggressively managing costs."
The company cited strong strong recovery in the capital markets and expects to tap the markets for the first time in two years to recapitalise Discovery Air. "in a way that better supports its operations and planned growth. To that end it repaid CAD13.2 million in subordinated debt on 18-April as part of an effort to reduce consolidated interest expense and total debt outstanding. It said it also expects the action to increase shareholder equity with odest dilution and reduce the leverage of on capital structure.
Three days later is announced an agreement to issue CAD30 million in new subordinated unsecured convertible debentures to be used to pre-pay December 2006 debentures due 31-Dec-2011. It is targeting mid-May for the closure of this transaction. It is also thinking of refinancing some or all of its other long-term debt at lower rates and with fewer restrictions on managing assets.
"At the same time, we are working hard to leverage the improvements in our operating and financial performance to build equity market support for Discovery Air," said the company. "This includes meeting with brokers and institutional investors to explain our business and help stimulate interest in Discovery Air stock. We are also considering a variety of other initiatives to help build support for the Corporation's stock and to overhaul and simplify our capital structure generally."