Alliance Aviation Services Limited · ASX:AQZ
Alliance Aviation Services — H1 FY2014 Earnings Presentation
24 slides from Alliance Aviation Services's earnings presentation, Feb 20, 2014
Slide 1: Interim Results presentation
Interim Results presentation Half year ended 31 December 2013 20 February 2014 Scott McMillan, Managing Director Matthew Dyer, Chief Financial Officer Lee Schofield, Chief Operating Officer
Slide 2: Four Key Messages
Four Key Messages • Core strategy remains a focus on long term FIFO contracts • 2014 a transitional year - continued strong financial outlook • Maintained a fully franked interim dividend • Positioned the fleet to improve utilisation and overall margin 2
Slide 3: Key Themes
Key Themes • We are delivering on our commitments • Strong and predictable operating performance • We are positioning for future known opportunities • Good contract wins a platform for FY15 • Implemented structural improvements to our business • Business model enables us to control costs and rapidly
Slide 4: Solid results despite a softening in the mining sector
Solid results despite a softening in the mining sector • As an essential service to the mining and energy sectors, we have continued to develop relationships with key players, with several contract wins and extensions. The full benefit will be enjoyed in the later part of FY2014 and into FY2015. Thi
Slide 5: Interim Results
Interim Results Half year ended 31 December 2013
Slide 6: Underlying Income Statement Summary
Underlying Income Statement Summary Profit & loss statement Key observations % 1HFY14 1HFY13 pcp ($ in millions) Actual Actual Change • Revenue decline is predominately due to a Revenue decline in ACMI income FIFO 84.4 86.8 (3%) • The contracted FIFO revenue decline is a Charter / ACMI 19.6 27.9 (30
Slide 7: Revenue softened but with new contract wins is expected to firm
Revenue softened but with new contract wins is expected to firm for remainder of FY2014 and into FY 2015 • Reduction in ACMI has freed up fleet units for FIFO work and future contract new contract wins • Slight reduction of flights for current contracts which reflects current resources market condit
Slide 8: Operational efficiency measures are expected to benefit earnings in FY2015
Operational efficiency measures are expected to benefit earnings in FY2015 so to a larger fleet utilisation 1HFY14 1HFY13 Variance On Time Performance 92% 91% 1% Average aircraft in service 27.0 23.4 3.6 Flight Hours “FIFO” 11,580 12,941 (1,361) Flight Hours “Wet Lease” 1,592 4,320 (2,728) Total Fli
Slide 9: Summary Balance Sheet
Summary Balance Sheet Balance Sheet Key observations ($ in millions) 31-Dec-13 30-Jun-13 31-Dec-12 • Focus on maintaining a strong Cash 1.9 0.4 13.6 Receivables 28.0 34.6 22.7 Balance Sheet with conservative Inventory 9.5 8.2 8.4 gearing and no “off balance Total current assets 39.4 43.3 44.7 sheet”
Slide 10: Cash flow Statement
Cash flow Statement Cash flow statement Key Observations 1HFY14 1HFY13 ($ in millions) Receipts from customers (inclusive of GST) 122.2 130.9 • Cash generation a priority for Board and Payments to suppliers (inclusive of GST) (97.9) (97.2) Management Net interest paid (2.0) (2.6) Income tax paid (3.
Slide 11: Operations update
i Allance Operations update
Slide 12: Alliance vs. Other Major and Regional Airlines
Alliance vs. Other Major and Regional Airlines Key attributes Alliance Airlines Typical Major or Regional Airlines Commodity production volumes and capital Highly cyclical, subject to general business and investment growth consumer confidence activity Revenue drivers Able to forecast in the me
Slide 13: Unparalleled National Footprint
Unparalleled National Footprint DARWIN GROOTE EYLANDT CAIRNS DARWIN • Offices (engineering support • Base established and crew) CAIRNS • Line maintenance LAWN HILL PERTH TOWNSVILLE TOWNSVILLE MT ISA • Alliance T2 facility SHAY GAP TELFER • Offices CLONCURRY and FIFO Lounge KARRATHA BARIMUNYA THE GRA
Slide 14: Leader in experience, safety and compliance
Leader in experience, safety and compliance • Australia’s most experienced and resourced F100/70 operator. • Most experienced F100/70 pilots and engineers in Australia. • World leader in Fokker performance engineering. • First and only Australian fixed wing operator to receive Flight Safety Foundati
Slide 15: Performance Excellence: delivering contract roll-overs
Performance Excellence: delivering contract roll-overs 15
Slide 16: Delivering superior service to our customers
Delivering superior service to our customers 16
Slide 17: Recent contract wins
Alllance Recent contract wins
Slide 18: New contract wins and extensions Year to Date
New contract wins and extensions Year to Date Date Customer Outcome Contract details November Serco (QCLNG Project) Contract win • Brisbane/Miles • F50/F70 LR • Full schedule Jan 14 October Newcrest - Telfer 3-year extension • Perth / Telfer • F100 / F70 LR July MMG – Century Mine 18-month • CNS/TSV
Slide 19: Outlook
Th Allance Outlook
Slide 20: Solid outlook
Solid outlook • Strategy of concentrating exposure to major players with long term contracts predominantly in production. • Alliance has focused on operational efficiencies over the past seven months to improve efficiency, cost effectiveness and economic resilience. • Diversity across the resource s
Slide 21: Providing some guidance
Providing some guidance • Alliance does have some visibility over its future earnings and control over its costs. The Board has determined that giving some guidance on forecasts and prospects is appropriate. • Second half better than the first half. • Alliance expects to achieve NPAT of 16.0M to 17.
Slide 22: Appendix
Th Allance Appendix
Slide 23: Attractive from a valuation perspective
Attractive from a valuation perspective FY2014 PE ratio of peers 25.0x 21.0x 20.0x 17.6x 15.1x 14.1x Peer average: 13.3x 15.0x 13.8x 11.6x 11.4x 10.0x 9.1x 8.0x 7.9x Consensus estimates forecast 5.0x loss in FY14 n.a. n.a. - Source: BLOOMBERG PROFESSIONAL™ service, Company filings Note: Engineering
Slide 24: Disclaimer
Disclaimer Reliance on third party information This presentation was prepared by Alliance Aviation Services Limited (ACN 153 361 525) (“Alliance”). This presentation may contain information that has been derived from publicly available sources that have not been independently verified. No representa
Alliance Aviation Services — H1 FY2014 Earnings Presentation on 6ix