Volaris Results

Volaris Reports First Quarter 2019 Results

9.0% TRASM Increase, 5.8% Reduction of Unit Cost Excluding Fuel and Cash Flow Generation

Volaris

Volaris (NYSE: VLRS and BMV: VOLAR), the ultra-low-cost airline serving Mexico, the United States and Central America, today announced its financial results for the first quarter 2019.

First Quarter 2019 Highlights

  • Total operating revenues were Ps.7,192 million for the first quarter, an increase of 22.9% year over year.
  • Total ancillary revenues were Ps.2,563 million for the first quarter, an increase of 30.5% year over year. Total ancillary revenues per passenger for the first quarter reached Ps.517, increasing 12.1% year over year. Total ancillary revenues represented 35.6% of the total operating revenues for the first quarter 2019, increasing 2 percentage points with respect to the same period of last year.
  • Total operating revenues per available seat mile (TRASM) totaled Ps.126.1 cents for the first quarter, an increase of 9.0% year over year.
  • Operating expenses per available seat mile (CASM) were Ps.125.7 cents for the first quarter, a decrease of 0.7% year over year; with an average economic fuel cost per gallon of Ps.46.0 for the first quarter, an increase of 14.8% year over year.
  • Operating expenses excluding fuel, per available seat mile (CASM ex fuel) reached Ps.78.6 cents for the first quarter, a decrease of 5.8% year over year. 
  • Operating income was Ps.26 million for the first quarter, an improvement compared with the operating loss of Ps.545 million for the same period of last year. Operating margin for the first quarter was 0.4%, an improvement in margin of 9.7 percentage points year over year.
  • Net income was Ps.519 million (Ps.0.51 per share / US$0.26 per ADS), with a net margin of 7.2% for the first quarter.
  • At the close of the first quarter, the Mexican peso had appreciated 1.5% against the U.S. dollar with respect to the end of period exchange rate of the previous quarter (Ps.19.68 per US dollar). The Company booked a foreign exchange gain of Ps.1,154 million as a consequence of our U.S. dollar net monetary liability position, as result of the adoption of IFRS16. 
  • Net cash flow provided by operating activities was Ps.3,731 million, in conjunction with cash flow used in investing activities of Ps.379 million and in financing activities of Ps. 2,063 million. The negative net foreign exchange difference was Ps.82 million, with net cash generation in the first quarter of Ps.1,208 million. As of March 31, 2019, cash and cash equivalents were Ps.7,071 million.

Resilient Macroeconomics, Domestic Consumer Demand with Peso Depreciation and Fuel Price Pressures

  • Resilient macroeconomics and domestic consumer demand:  The macroeconomic indicators in Mexico during the first quarter were stable, with same store sales[1] increasing 2.1% year over year; remittances[2] increased 6.4% year over year during first two months of the year; and the Mexican Consumer Confidence Balance Indicator (BCC) [3] increasing in the first quarter 36% year over year.
  • Air traffic volume increase: The Mexican DGAC reported overall passenger volume growth for Mexican carriers of 5.6% year over year for the first two months of 2019; domestic overall passenger volume increased 5.3%, while international overall passenger volume remained at the same level.
  • Exchange rate volatility: The Mexican peso depreciated 2.4% year over year against the US dollar, from an average exchange rate of Ps.18.76 pesos per US dollar in the first quarter 2018 to Ps.19.22 pesos per US dollar during the first quarter 2019. At the end of the first quarter, the Mexican peso appreciated 1.5% with respect to the end of period exchange rate of the previous quarter. The Company booked a foreign exchange gain of Ps.1,154 million as a consequence of our US dollar net monetary liability position, resulting from the adoption of IFRS16. 
  • Higher fuel prices: The average economic fuel cost per gallon increased 14.8% to Ps.46.0 per gallon (US$2.4) in the first quarter 2019, year over year.

Passenger Traffic Stimulation, Further Ancillary Revenue Expansion, and Positive TRASM Growth

  • Passenger traffic stimulation: Volaris booked 5.0 million passengers in the first quarter 2019, up 16.4% year over year. Volaris traffic (measured in terms of revenue passenger miles, or RPMs) increased 14.2% year over year. System load factor during the first quarter increased 1.0 percentage point to 83.2% year over year.
  • Positive TRASM growth: For the first quarter 2019, TRASM increased 9.0% year over year. During the first quarter 2019, the total capacity, in terms of ASMs, increased 12.8% year over year.
  • Total ancillary revenue growth: For the first quarter 2019, total ancillary revenues increased 30.5% year over year. Total ancillary revenues per passenger for the first quarter of 2019 increased 12.1% year over year. The total ancillary revenue generation continues to grow with new and matured products, appealing to customers' needs, representing 35.6% of total operating revenues for the first quarter, up 2 percentage points year over year.
  • New routes: Volaris began operations in 16 new domestic routes from or to its focus cities Mexico City, Guadalajara, Tijuana and others. Additionally, Volaris launched 17 routes, 10 domestic (Mexico to Ciudad Juarez, Puerto Escondido and Durango; Queretaro to Chihuahua and Puerto Vallarta; Guadalajara to Durango and Queretaro; Monterrey to Oaxaca and Los Cabos; Ciudad Juarez to Chihuahua) and 7 international  (Mexico and Guadalajara to El Salvador; Durango to Dallas; Puerto Vallarta to Phoenix; Queretaro to Chicago;  Aguascalientes to Chicago (Midway); and Chihuahua to Albuquerque.

The Cost Control Discipline Offset Fuel Price Pressure and Peso Depreciation

  • CASM and CASM ex fuel for the first quarter 2019 reached Ps.125.7 (US$6.5 cents) and Ps.78.6 cents (US$4.1 cents), respectively. This represented a decrease of 0.7% and 5.8%, respectively; mainly driven by tightening cost control discipline, despite the higher average economic fuel cost per gallon of 14.8% and an average exchange rate depreciation of 2.4%.

Young and Fuel-efficient Fleet

  • During first quarter 2019, the Company incorporated one aircraft (A321 neo) to its fleet; during this quarter no redeliveries were registered. As of March 31, 2019, Volaris' fleet was composed of 78 aircraft (8 A319s, 55 A320s and 15 A321s), with an average age of 4.8 years. At the end of the first quarter 2019, Volaris' fleet had an average of 186 seats, 74% of which were in sharklet-equipped aircraft, and 22% were NEO.

Solid Balance Sheet and Good Liquidity

  • Net cash flow provided by operating activities was Ps.3,731 million, in conjunction with cash flow used in investing activities of Ps.379 million and in financing activities of Ps. 2,063 million; negative net foreign exchange difference was Ps.82 million, while the net cash generation in the first quarter was Ps.1,208 million. As of March 31, 2019, cash and cash equivalents were Ps.7,071 million, representing 24.7% of last twelve months operating revenues. Volaris registered negative net debt (or a positive net cash position) of Ps.4,018 million (excluding lease liability recognized under IFRS16 adoption) and total equity of Ps.3,624 million.

Transition to IFRS 16

  • The Company adopted IFRS 16 as of January 1st, 2019, using the full retrospective method. The cumulative effect of adopting IFRS 16 has been recognized as an adjustment to the opening balance as of January 1st, 2017 as an increase in assets and liabilities and an adjustment in the retained earnings. The full disclosure of this initial adoption is included in the Company´s 2018 annual report.
  • This quarterly earnings release includes supplemental information for comparable purposes, with recast 2018 figures with the IFRS 16 adoption effects and were derived from unaudited financial statements included in the quarterly reports on Form 6-K during the year ended as of December 31, 2018.  
  • Since all the aircraft and engine lease contracts are denominated in USDs, starting on March 25, 2019, the Company established a hedge on its USD denominated revenues using the lease liabilities denominated in USD as a hedge instrument. This hedging relationship is designated as a cash flow hedge of forecasted revenues to mitigate the volatility of the foreign exchange variation arising from the revaluation of its lease liabilities. The impact of this hedge will be presented as part of the total operating revenues; however, it was not material for the results of this first quarter.
  • Additionally, on the same date, the Company established a hedge on a portion of its forecasted fuel expense using as hedge instrument a portion of its USD denominated monetary assets. This hedging relationship is designated as a cash flow hedge of forecasted fuel expense to mitigate the volatility of the foreign exchange variation arising from the revaluation of this portion of USD denominated monetary asset. The impact of this hedge will be presented as part of the total fuel expense; however, it was not material for the results of this first quarter.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Financial and Operating Indicators

Unaudited

Three months

ended March 31,

2019

Three months

ended March

31, 2019

Three months

ended March 31, 2018

(Adjusted)

Variance

(In Mexican pesos, except otherwise indicated)

(US Dollars)*

(%)

Total operating revenues (millions)

371

7,192

5,850

22.9%

Total operating expenses (millions)

370

7,166

6,395

12.1%

EBIT (millions)

1

26

(545)

NA

EBIT margin

0.4%

0.4%

(9.3%)

9.7 pp

Depreciation and amortization

67

1,292

1,071

20.6%

Aircraft and engine rent expense

12

227

317

(28.4%)

Net income (millions)

27

519

461

12.5%

Net income margin

7.2%

7.2%

7.9%

(0.7) pp

Income per share:

Basic (pesos)

0.03

0.51

0.46

12.5%

Diluted (pesos)

0.03

0.51

0.46

12.5%

Income per ADS:

Basic (pesos)

0.26

5.13

4.56

12.5%

Diluted (pesos)

0.26

5.13

4.56

12.5%

Weighted average shares outstanding:

Basic

-

1,011,876,677

1,011,876,677

0.0%

Diluted

-

1,011,876,677

1,011,876,677

0.0%

Available seat miles (ASMs) (millions) (1)

-

5,704

5,055

12.8%

     Domestic

-

3,971

3,446

15.2%

     International

-

1,733

1,609

7.7%

Revenue passenger miles (RPMs) (millions) (1)

-

4,744

4,155

14.2%

     Domestic

-

3,386

2,902

16.7%

     International

-

1,358

1,253

8.4%

Load factor (2) 

-

83.2%

82.2%

1.0 pp

     Domestic

-

85.3%

84.2%

1.1 pp

     International

-

78.6%

77.9%

0.7 pp

Total operating revenue per ASM (TRASM) (cents) (1) (5) 

6.5

126.1

115.7

9.0%

Total ancillary revenue per passenger (4)

26.7

517

461

12.1%

Total operating revenue per passenger (5)

74.8

1,449

1,372

5.6%

Operating expenses per ASM (CASM) (cents) (1) (5)

6.5

125.7

126.5

(0.7%)

Operating expenses per ASM (CASM) (US cents) (3) (5)

-

6.5

6.7

(3.8%)

CASM ex fuel (cents) (1) (5)

4.1

78.6

83.5

(5.8%)

CASM ex fuel (US cents) (3) (5)

-

4.1

4.4

(8.8%)

Booked passengers (thousands) (1)

-

4,962

4,263

16.4%

Departures (1)

-

32,198

28,188

14.2%

Block hours (1)

-

82,848

77,244

7.3%

Fuel gallons consumed (millions)

-

58.3

54.3

7.5%

Average economic fuel cost per gallon

2.4

46.0

40.1

14.8%

Aircraft at end of period

-

78

70

11.4%

Average aircraft utilization (block hours)

-

12.7

13.2

(3.7%)

Average exchange rate

-

19.22

18.76

2.4%

End of period exchange rate

-

19.38

18.34

5.6%

*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

(1) Includes schedule + charter                                                                    (3) Dollar amounts were converted at average exchange rate of each period

(2) Includes schedule                                                                                   (4) Includes "other passenger revenues" and "non-passenger revenues"

(5) Not include natural hedge

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Operations

Unaudited

Three months

ended March 31,

2019

Three months

Ended March 31,

2019

Three months

ended March 31,

2018

(Adjusted)

Variance

(In millions of Mexican pesos)

(US Dollars) *

(%)

Operating revenues:

Passenger revenues

360

6,976

5,610

24.4%

   Fare revenues

239

4,629

3,886

19.1%

   Other passenger revenues (1)

121

2,347

1,724

36.1%

Non-passenger revenues

11

216

240

(10.0%)

   Other non-passenger revenues (1)

8

154

192

(19.7%)

   Cargo

3

62

49

28.0%

Total operating revenues

371

7,192

5,850

22.9%

Other operating income

-

-

(1)

(100%)

Total Fuel expense, net

138

2,683

2,175

23.4%

Depreciation and amortization

67

1,292

1,071

20.6%

Landing, take-off and navigation expenses

64

1,232

1,124

9.6%

Salaries and benefits

44

852

746

14.1%

Maintenance expenses

18

353

346

2.0%

Sales, marketing and distribution expenses

14

271

357

(24.1%)

Aircraft and engine rent expense

12

227

317

(28.4%)

Other operating expenses

13

256

258

(0.7%)

Operating expenses

370

7,166

6,395

12.1%

Operating income (loss)

1

26

(545)

NA

Finance income

2

38

34

12.2%

Finance cost

(26)

(503)

(395)

27.2%

Exchange gain, net

60

1,154

1,564

(26.2%)

Comprehensive financing result

36

689

1,202

(42.7%)

Income before income tax

37

715

658

8.7%

Income tax expense

(10)

(196)

(196)

(0.2%)

Net income

27

519

461

12.5%

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) The figures of 1Q 2018 includes a reclassification from "other non-passenger revenues" to "Other passenger revenues" of Ps.77 million, as result of the IFRS 15 adoption. 

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Reconciliation of total ancillary revenue per passenger

The following table shows quarterly additional detail about the components of total ancillary revenue:

Unaudited

Three months

ended March 31,

2019

(US Dollars)*

Three months

ended March

31, 2019

Three months

ended March

31, 2018

(Adjusted)

Variance

(%)

(In millions of Mexican pesos)

Other passenger revenues (1)

121

2,347

1,724

36.1%

Non-passenger revenues (1)

11

216

240

(10.0%)

Total ancillary revenues

132

2,563

1,964

30.5%

Booked passengers (thousands)

-

4,962

4,263

16.4%

Total ancillary revenue per passenger

26.7

517

461

12.1%

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only.

(1) The figures of 1Q 2018 includes a reclassification from "other non-passenger revenues" to "Other passenger revenues" of Ps.77 million, as result of the IFRS 15 adoption.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Financial Position

(In millions of Mexican pesos)

March 31, 2019

Unaudited

March 31, 2019

Unaudited

December 31, 2018

(Adjusted)

(US Dollars)*

Assets

Cash and cash equivalents

365

7,071

5,863

Accounts receivable

91

1,754

1,467

Inventories

15

296

297

Prepaid expenses and other current assets

30

588

443

Financial instruments

3

67

62

Guarantee deposits

32

615

791

Total current assets

536

10,390

8,923

Rotable spare parts, furniture and equipment, net

312

6,052

5,782

Right of use assets

1,668

32,334

31,986

Intangible assets, net

9

170

179

Deferred income taxes

145

2,817

2,864

Guarantee deposits

343

6,639

6,337

Other assets

9

174

155

Other accounts receivable

4

74

74

Total non-current assets

2,490

48,260

47,378

Total assets

3,026

58,650

56,301

Liabilities

Unearned transportation revenue

214

4,142

2,439

Accounts payable

47

911

1,103

Accrued liabilities

135

2,619

2,318

Lease liabilities

230

4,448

4,970

Other taxes and fees payable

159

3,074

1,932

Income taxes payable

-

2

4

Financial instruments

-

3

123

Financial debt

86

1,661

1,212

Other liabilities

2

46

26

Total short-term liabilities

872

16,905

14,127

Financial debt

72

1,392

2,311

Accrued liabilities

7

134

137

Lease liabilities

1,803

34,936

34,586

Other liabilities

18

357

328

Employee benefits

1

19

18

Deferred income taxes

66

1,282

1,096

Total long-term liabilities

1,967

38,121

38,476

Total liabilities

2,839

55,026

52,603

Equity

Capital stock

153

2,974

2,974

Treasury shares

(6)

(122)

(123)

Contributions for future capital increases

-

-

-

Legal reserve

15

291

291

Additional paid-in capital

94

1,830

1,837

Retained earnings

(36)

(689)

(1,208)

Accumulated other comprehensive losses

(34)

(659)

(73)

Total equity

187

3,624

3,698

Total liabilities and equity

3,026

58,650

56,301

Total shares outstanding fully diluted

1,011,876,677

1,011,876,677

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Cash Flows – Cash Flow Data Summary

Unaudited

 

Three months

ended March 31,

2019

Three months

ended March 31,

2019

Three months

ended March 31,

2018

(Adjusted)

(In millions of Mexican pesos)

(US Dollars)*

Net cash flow provided by operating activities

193

3,731

2,404

Net cash flow used in investing activities

(20)

(379)

(313)

Net cash flow used in financing activities

(106)

(2,063)

(1,246)

Increase in cash and cash equivalents

67

1,290

844

Net foreign exchange differences

(4)

(82)

(478)

Cash and cash equivalents at beginning of period

303

5,863

6,951

Cash and cash equivalents at end of period

365

7,071

7,317

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

The following table shows adjusted balances after the adoption of IFRS 16 "Leases", on the quarterly statements of operations for each quarter of 2018. These recast amounts were derived from unaudited financial statements included in the quarterly reports on Form 6-K during the year ended December 31, 2018.

Unaudited

(In millions of Mexican pesos)

Three

months

ended March

31, 2018

(Adjusted)

Three months

ended June

30, 2018

(Adjusted)

Three months

ended

September 30,

2018

(Adjusted)

Three months

ended

December 31,

2018

(Adjusted)

Full Year 2018

(Adjusted)

Operating revenues:

 Passenger revenues

5,610

5,990

7,138

7,643

26,381

   Fare revenues

3,886

4,137

5,096

5,370

18,488

   Other passenger revenues (1)

1,724

1,853

2,042

2,273

7,892

 Non-passenger revenues

240

240

179

265

924

   Other non-passenger revenues (1)

192

187

124

194

697

   Cargo

49

53

55

71

227

Total operating revenues

5,850

6,230

7,317

7,908

27,305

Other operating income

(1)

(231)

(243)

(147)

(622)

Fuel

2,175

2,445

2,631

2,885

10,135

Landing, take-off and navigation expenses

1,124

1,149

1,149

1,157

4,579

Depreciation and amortization

1,071

1,136

1,162

1,256

4,625

Salaries and benefits

746

750

834

795

3,125

Sales, marketing and distribution expenses

357

382

340

422

1,501

Maintenance expenses

346

376

388

387

1,499

Aircraft and engine rent expense

317

105

215

55

692

Other operating expenses

258

283

239

277

1,058

Operating expenses

6,395

6,395

6,715

7,087

26,592

Operating (loss) income

(545)

(165)

602

821

713

Operating margin

(9.3%)

(2.6%)

8.2%

10.4%

2.6%

Finance income

34

37

37

45

153

Finance cost

(395)

(439)

(487)

(478)

(1,798)

Exchange gain (loss), net

1,564

(1,926)

1,395

(1,137)

(106)

Comprehensive financing result

1,202

(2,328)

945

(1,570)

(1,751)

Income (loss) before income tax

658

(2,493)

1,547

(749)

1,038

Income tax (expense) benefit

(196)

728

(442)

187

277

Net income (loss)

461

(1,765)

1,105

(562)

(761)

Earnings (loss) per share:

Basic (pesos)

0.46

(1.74)

1.09

(0.56)

(0.75)

Diluted (pesos)

0.46

(1.74)

1.09

(0.56)

(0.75)

Earnings (loss) per ADS:

Basic (pesos)

4.56

(17.44)

10.92

(5.55)

(7.52)

Diluted (pesos)

4.56

(17.44)

10.92

(5.55)

(7.52)

(1) The annual figures of 2018 include a reclassification from "other non-passenger revenues" to "Other passenger revenues" of Ps.271 million, as result of the IFRS 15 adoption.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

The following table shows quarterly adjustments made due to the adoption of IFRS 16 "Leases", on the statements of operations for 2018.

Unaudited

Full Year 2018

(Reported)

Three months

ended March 31,

2018

Three months

ended June 30,

2018

Three months

ended

September 30,

2018

Three months

ended 

December 31,

2018

Full Year 2018

(Adjusted)

(In millions of Mexican pesos)

Operating revenues:

 Passenger revenues

26,381

-

-

-

-

26,381

   Fare revenues

18,488

-

-

-

-

18,488

   Other passenger revenues (1)

7,892

-

-

-

-

7,892

 Non-passenger revenues

924

-

-

-

-

924

   Other non-passenger revenues (1)

227

-

-

-

-

227

   Cargo

697

-

-

-

-

697

Total operating revenues

27,305

-

-

-

-

27,305

Other operating income

(622)

-

-

-

-

(622)

Fuel

10,135

-

-

-

-

10,135

Aircraft and engine rent expense

6,315

(1,278)

(1,400)

(1,378)

(1,567)

692

Landing, take-off and navigation expenses

4,583

(1)

(1)

(1)

(1)

4,579

Salaries and benefits

3,125

-

-

-

-

3,125

Maintenance expenses

1,518

(4)

(5)

(5)

(5)

1,499

Sales, marketing and distribution expenses

1,501

-

-

-

-

1,501

Other operating expenses

1,130

(17)

(18)

(18)

(19)

1,058

Depreciation and amortization

501

939

1,012

1,047

1,126

4,625

Operating expenses

28,186

(361)

(412)

(355)

(466)

26,592

Operating (loss) income

(881)

361

412

355

466

713

Operating margin

(3.2%)

2.6%

Finance income

153

-

-

-

-

153

Finance cost

(120)

(361)

(408)

(423)

(486)

(1,798)

Exchange (loss) gain, net

(72)

2,255

(2,581)

1,814

(1,521)

(106)

Comprehensive financing result

(40)

1,894

(2,989)

1,391

(2,007)

(1,751)

(Loss) income before income tax

(921)

2,255

(2,577)

1,746

(1,541)

(1,038)

Income tax benefit (expense)

238

(676)

775

(523)

463

277

Net (loss) income

(683)

1,579

(1,802)

1,223

(1,078)

(761)

Basic (loss) earnings per share

(0.67)

1.56

(1.78)

1.21

(1.07)

(0.75)

Diluted (loss) earnings per share

(0.67)

1.56

(1.78)

1.21

(1.07)

(0.75)

(1) The annual figures of 2018 include a reclassification from "other non-passenger revenues" to "Other passenger revenues" of Ps.271 million, as result of the IFRS 15 adoption.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

The following table shows balances before the adoption of IFRS 16 "Leases", on the quarterly statements of operations for each quarter of 2018.

Unaudited

 

 

 

(In millions of Mexican pesos)

Three

months

ended March

31, 2018

(Reported)

Three

months

ended June

30, 2018

(Reported)

Three

months

ended

September

30, 2018

(Reported)

Three

months

ended

December

31, 2018

(Reported)

Full Year

2018

(Reported)

Operating revenues:

 Passenger revenues

5,610

5,990

7,138

7,643

26,381

   Fare revenues

3,886

4,137

5,096

5,370

18,489

   Other passenger revenues (1)

1,724

1,853

2,042

2,273

7,892

 Non-passenger revenues

240

240

179

265

924

   Other non-passenger revenues (1)

192

187

124

194

697

   Cargo

49

53

55

71

227

Total operating revenues

5,850

6,230

7,316

7,909

27,305

Other operating income

(1)

(231)

(243)

(147)

(622)

Fuel

2,175

2,445

2,631

2,885

10,135

Aircraft and engine rent expense

1,596

1,504

1,593

1,622

6,315

Landing, take-off and navigation expenses

1,125

1,150

1,150

1,158

4,583

Salaries and benefits

746

750

834

795

3,125

Sales, marketing and distribution expenses

357

382

340

422

1,501

Maintenance expenses

351

381

393

392

1,518

Other operating expenses

274

301

257

297

1,130

Depreciation and amortization

132

124

115

130

501

Operating expenses

6,757

6,805

7,070

7,554

28,186

Operating (loss) income

(906)

(575)

246

355

(881)

Operating margin

(15.5%)

(9.2%)

3.4%

4.5%

(3.2%)

Finance income

34

37

37

45

153

Finance cost

(34)

(31)

(64)

8

(120)

Exchange (loss) gain, net

(691)

653

(419)

384

(73)

Comprehensive financing result

(691)

660

(446)

437

(40)

(Loss) income before income tax

(1,597)

85

(200)

792

(921)

Income tax benefit (expense)

479

(47)

81

(276)

238

Net (loss) income

(1,118)

38

(119)

516

(683)

(Loss) earnings per share:

Basic (pesos)

(1.10)

0.04

(0.12)

0.51

(0.67)

Diluted (pesos)

(1.10)

0.04

(0.12)

0.51

(0.67)

(Loss) earnings per ADS:

Basic (pesos)

(11.05)

0.38

(1.18)

5.10

(6.75)

Diluted (pesos)

(11.05)

0.38

(1.18)

5.10

(6.75)

(1) The annual figures of 2018 include a reclassification from "other non-passenger revenues" to "Other passenger revenues" of Ps.271 million, as result of the IFRS 15 adoption.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Financial Position

The following table shows annual adjustments made due to the adoption of IFRS 16 "Leases", on the Consolidated Statement of Financial Position as of December 31, 2018.

(In millions of Mexican pesos)

December 31, 2018

(Reported)

IFRS 16

Adjustments

December 31, 2018

(Adjusted)

Assets

Cash and cash equivalents

5,863

-

5,863

Accounts receivable

1,467

-

1,467

Inventories

297

-

297

Prepaid expenses and other current assets

710

(267)

443

Financial instruments

62

-

62

Guarantee deposits

791

-

791

Total current assets

9,190

(267)

8,923

Rotable spare parts, furniture and equipment, net

5,782

-

5,782

Right of use assets

-

31,986

31,986

Intangible assets, net

179

-

179

Deferred income taxes

593

2,271

2,864

Guarantee deposits

6,337

-

6,337

Other assets

155

-

155

Other accounts receivable

74

-

74

Total non-current assets

13,121

34,257

47,378

Total assets

22,311

33,990

56,301

Liabilities

Unearned transportation revenue

2,439

-

2,439

Accounts payable

1,103

-

1,103

Accrued liabilities

2,318

-

2,318

Lease liabilities

-

4,970

4,970

Other taxes and fees payable

1,932

-

1,932

Income taxes payable

4

-

4

Financial instruments

123

-

123

Financial debt

1,212

-

1,212

Other liabilities

118

(92)

26

Total short-term liabilities

9,249

4,878

14,127

Financial debt

2,311

-

2,311

Accrued liabilities

137

-

137

Lease liabilities

-

34,586

34,586

Other liabilities

328

-

328

Employee benefits

18

-

18

Deferred income taxes

1,096

-

1,096

Total long-term liabilities

3,890

34,586

38,476

Total liabilities

13,139

39,464

52,603

Equity

Capital stock

2,974

-

2,974

Treasury shares

(123)

-

(123)

Contributions for future capital increases

-

-

-

Legal reserve

291

-

291

Additional paid-in capital

1,837

-

1,837

Retained earnings

4,266

(5,474)

(1,208)

Accumulated other comprehensive losses

(73)

-

(73)

Total equity

9,172

(5,474)

3,698

Total liabilities and equity

22,311

33,990

56,301

Total shares outstanding fully diluted

1,011,876,677

1,011,876,677

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Cash Flows – Cash Flow Data Summary

The following table shows first quarter adjustments made due to the adoption of IFRS 16 "Leases", on the Consolidated Statement of Cash Flow for the three months ended March 31, 2018.

Unaudited

Adjustments

 

Three months

ended March 31,

2018

(Adjusted)

(In millions of Mexican pesos)

Three months

ended March 31,

2018

(Reported)

Net cash flow provided by operating activities

1,093

1,311

2,404

Net cash flow used in investing activities

(313)

-

(313)

Net cash flow provided by (used in) financing activities

65

(1,311)

(1,246)

Increase in cash and cash equivalents

844

-

844

Net foreign exchange differences

(478)

-

(478)

Cash and cash equivalents at beginning of period

6,951

-

6,951

Cash and cash equivalents at end of period

7,317

-

7,317

1 Source: Asociación Nacional de Tiendas de Autoservicio y Departamentales, A. C. (ANTAD)

2 Source: Banco de México (BANXICO)

3 Source: Instituto Nacional de Estadística y Geografía (INEGI)

SOURCE Volaris



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