PRECISION AIR FINANCIAL RESULTS 2012/2013
Dar Es Salaam, August 30th, 2013
The Board of Directors of Precision Air Services Plc is pleased to announce its full year results for the year ended March 31st 2013.
The company made a net loss of Tshs.30.4billion against prior year which stood at Tshs.1.2billion profit.
Overall the Available Seat Kilometers grew by 10% whereas the Revenue Seat Kilometers grew by 16%. Total numbers of passengers uplifted over the period went up by 8.5% to 895,650 against 825,150 prior year. The yield however declined by 9.4%.
Total Revenues grew by 8.2% to Tshs.176.4billion largely driven by increased passenger numbers. This robust growth in passengers was attained even with increased competition in the domestic market.
Direct Expenditures went up by 24% to Tshs 145billion due to increased cost of fuel and increased equipment related costs. Aircraft Maintenance costs increased from Tshs.11.9billion in 2011 to Tshs.23.6billion in 2012; this was mainly due to the high costs of maintaining the Boeing 737 Fleet.
The gross profit margin therefore declined from 28percent in the prior year to 18% (Tshs.31billion against Tshs.46billion prior year).
The Indirect Expenditure grew by 18.6% to Tshs.42billion, driven mainly by staff related costs that went up by 8% to Tshs.28.5billion against Tshs.26.4billion.
Financing Costs grew by 8% due to overdrafts whereas the company accrued a loss in foreign currency exchange of Tshs.4.4billion which is a 50% growth over prior year. This is largely related to US dollar denominated borrowings for aircraft financing.
Loss on impairment of receivables grew to Tshs.8.6billion from Tsh.0.3billion, due to addition provisions made in relation to other carriers billing rejections that were unprocessed by year end.
The net effect was a loss of Tshs.30.4billion against a profit of Tshs.1.2billion prior year.
Considering the performance, the group recognized the need to execute a turnaround.
Towards that end, the Board has made changes in Top Management which has developed a new 5year Strategic Plan already approved by the Board.
The plan is focusing on the following:
Network Rationalization (pruning of non-profitable routes)
Fleet Rationalization (Termination of expensive fleet such as Boeing 737 aircraft leases).
Operations & Structure:- includes Staff Retrenchment and Internal Efficiencies
Revenue Enhancement Opportunities;- includes Third Party Maintenance, and Third Party Advertising.
So far, the actions taken have yielded positive results.
Group Managing Director & CEO