Annual Highlights:
- Completed the sale of the RAL business with net proceeds of US
$607.7 million in cash.
- Leverage Ratio1,2 improved to 1.4 at
December 31, 2024 from 3.3 at
December 31, 2023.
- Net loss from continuing operations of $15.8 million.
- Adjusted Earnings available to Common
Shareholders1,2 of $28.5
million.
- Adjusted Earnings available to Common
Shareholders1,2 of $1.04
per Common Share, basic.
- Adjusted EBITDA1,2 of $211.6
million.
- Free Cash Flow1,2 of $118.8
million.
- Parts sales, contract flying, MRO and other revenue of
$128.3 million primarily driven by
Voyageur.
Q4 Financial Highlights:
- Net loss of $6.6 million.
- Net loss from continuing operations of $49.4 million.
- Adjusted Earnings available to Common
Shareholders1,2 of $10.6
million.
- Adjusted Earnings available to Common
Shareholders1,2 of $0.39
per Common Share, basic.
- Adjusted EBITDA1,2 of $52.7
million.
- Free Cash Flow1,2 of $27.5
million.
- Parts sales, contract flying, MRO and other revenue of
$35.9 million primarily driven by
Voyageur.
Share Consolidation
- Effective February 5, 2025,
Chorus consolidated its Common Shares on the basis of one
post-consolidation Common Shares for every seven pre-consolidation
Common Shares (the "Share Consolidation"). Unless otherwise stated,
all per-Common Share figures in this new release are reported on a
post-Share Consolidation basis.
|
_________________________________
|
|
1 These are
non-GAAP financial measures or non-GAAP ratios that are not
recognized measures for financial statement presentation under
GAAP. As such, they do not have standardized meanings, may not be
comparable to similar measures presented by other issuers and
should not be considered a substitute for or superior to GAAP
results.
|
|
2 The
results of discontinued operations (RAL segment) have been excluded
from both current and prior period figures to conform to current
period presentation. All amounts presented and discussed in this
press release are from continuing operations unless otherwise
noted.
|
HALIFAX,
NS, Feb. 19, 2025 /CNW/ - Chorus Aviation
Inc. ('Chorus') (TSX: CHR) today announced its fourth quarter and
year-end 2024 financial results.
"We took a significant step this past year to strengthen Chorus
and unlock value with the sale of the RAL business in December,"
said Colin Copp, President and Chief
Executive Officer, Chorus. "Combined with the significant reduction
in debt and corporate financings, reduced interest and preferred
dividend costs, the transaction positions Chorus for improved
earnings and cash flows, as we renew our focus on growing our
aviation services business."
"Our fourth quarter delivered strong and consistent results that
were in line with our expectations," said Mr. Copp. "The Jazz team
continued to deliver strong cash flows under its CPA with Air
Canada, while Voyageur grew its position within the special
mission, parts sales and specialty MRO spaces, delivering on its
growth targets for the year. Cygnet, our pilot aviation academy,
made great progress welcoming its seventh cohort recently and
graduating pilots who moved into careers with Jazz as first
officers, as it also builds key industry partnerships for future
growth."
"Since the sale of the RAL business, we have accelerated the
pace of share repurchases under our NCIB, investing $10.0 million during this period," said Mr.
Copp. "With a stronger balance sheet and cash flows post the
RAL sale, we are monitoring market conditions and evaluating
opportunities to best enhance shareholder returns. As we move
forward, we are committed to driving long-term value for our
shareholders while strengthening our overall business."
Fourth Quarter Summary
In the fourth quarter of 2024, Chorus reported Adjusted EBITDA
from continuing operations of $52.7
million, a decrease of $2.0
million compared to the fourth quarter of 2023 primarily due
to:
- a decrease in aircraft leasing revenue under the CPA of
$2.4 million primarily due to a
change in lease rates on certain aircraft; and
- an increase in general administrative expenses primarily
attributable to increased operations; and
- an increase in stock-based compensation of $1.4 million due to an increase in the Common
Share price offset by the change in fair value of the Total Return
Swap; partially offset by
- an increase in Voyageur's parts sales, contract flying and MRO
activity;
- an increase in capitalization of major maintenance overhauls on
owned aircraft of $2.4 million;
and
- an improvement in the Controllable Cost Guardrail of
$2.0 million.
Adjusted Net Income from continuing operations was $10.6 million for the quarter, in line compared
to the fourth quarter of 2023 primarily due to:
- a $2.0 million decrease in
Adjusted EBITDA as previously described; and
- an increase in depreciation expense of $4.0 million primarily attributable to a change
in depreciation estimates on certain aircraft and capital
expenditures; partially offset by
- a positive change in foreign exchange of $3.2 million;
- a decrease of $1.7 million in
income tax expense; and
- a decrease in net interest costs of $0.8
million, inclusive of a $3.7
million interest charge related to the acceleration of the
amortization of the deferred financing costs related to the Series
B Debentures and Series C Debentures.
Net loss from continuing operations increased $77.7 million compared to the fourth quarter of
2023 primarily due to:
- a realized foreign exchange loss on the settlement of Preferred
Shares of $31.3 million;
- a reduction in realized foreign exchange gains related to the
settlement of intercompany loans in 2023 of $26.4 million;
- a negative change in net unrealized foreign exchange of
$13.8 million;
- impairment provisions of $10.5
million primarily related to planned part-out of Voyageur's
non-operational owned aircraft;
- interest accretion on Preferred Shares of $10.4 million; and
- an increase in employee separation program costs of
$1.0 million; partially offset
by
- a realized foreign exchange gain of $13.7 million related to US dollar denominated
cash held between the dates December 6,
2024 and December 31, 2024
being the dates Chorus received the net proceeds from the
Transaction and the redemption of the Preferred Shares,
respectively; and
- an increase in income tax recovery on adjusted items of
$2.2 million.
Annual Summary
Chorus reported Adjusted EBITDA from continuing operations of
$211.6 million for the year ended
December 31, 2024, a decrease of
$10.0 million compared to the same
prior year period primarily due to:
- a decrease in aircraft leasing revenue under the CPA of
$15.7 million primarily due to a
change in lease rates on certain aircraft;
- an increase in stock-based compensation of $3.6 million due to an increase in the Common
Share price offset by the change in fair value of the Total Return
Swap; and
- an increase in general administrative expenses primarily
attributable to increased operations; partially offset by
- an increase in capitalization of major maintenance overhauls on
owned aircraft of $6.4 million;
- an improvement in the Controllable Cost Guardrail of
$4.0 million; and
- an increase in Voyageur's parts sales, contract flying and MRO
activity.
Adjusted Net Income from continuing operations of $46.3 million, a decrease of $5.7 million compared to the same prior year
period primarily due to:
- a $10.0 million decrease in
Adjusted EBITDA as previously described; and
- an increase in depreciation expense of $14.4 million primarily attributable to a change
in depreciation estimates on certain aircraft and capital
expenditures; partially offset by
- a decrease of $11.9 million in
income tax expense; decrease in net interest costs of $3.7 million, inclusive of a $3.7 million interest charge related to the
acceleration of the amortization of the deferred financing costs
related to the Series B Debentures and Series C Debentures.;
and
- a positive change in net foreign exchange of $2.9 million.
Net loss from continuing operations of $15.8 million, an increase of $117.4 million compared to the same prior year
period primarily due to:
- the previously noted decrease in Adjusted Net Income of
$5.7 million;
- a realized foreign exchange loss on the settlement of Preferred
Shares of $31.3 million;
- the Defined Benefit Pension Revenue recognized in 2023 of
$29.9 million (Air Canada agreed to
compensate Jazz for the one-time impact of the wage increase on the
Jazz defined benefit pension plan);
- a reduction in realized foreign exchange gains related to the
settlement of intercompany loans in 2023 of $26.4 million;
- a negative change in net foreign exchange of $26.0 million;
- impairment provisions of $10.5
million primarily related to planned part-out on Voyageur
non-operational owned aircraft;
- interest accretion on Preferred Shares of $10.4 million; and
- an increase in employee separation program costs of
$1.1 million; partially offset
by
- a realized foreign exchange gain of $13.7 million related to US dollar denominated
cash held between the dates December 6,
2024 and December 31, 2024
being the dates Chorus received the net proceeds from the
Transaction and the redemption of the Preferred Shares,
respectively; and
- an increase in income tax recovery on adjusted items of
$10.3 million.
Consolidated Financial Analysis
This section provides detailed information and analysis about
Chorus' performance from continuing operations for the three months
and year ended December 31, 2024 compared to the three months
and year ended December 31, 2023.
|
(expressed in
thousands of Canadian
dollars)
|
Three months ended
December 31,
|
Year ended December
31,
|
|
2024
|
2023
|
Change
|
Change
|
2024
|
2023
|
Change
|
Change
|
|
$
|
$
|
$
|
%
|
$
|
$
|
$
|
%
|
|
|
(revised)(1)
|
|
|
|
(revised)(1)
|
|
|
|
Operating
revenue(2)
|
353,155
|
354,628
|
(1,473)
|
(0.4)
|
1,404,954
|
1,399,611
|
5,343
|
0.4
|
|
Operating
expenses
|
339,851
|
323,823
|
16,028
|
4.9
|
1,312,308
|
1,241,081
|
71,227
|
5.7
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
13,304
|
30,805
|
(17,501)
|
(56.8)
|
92,646
|
158,530
|
(65,884)
|
(41.6)
|
|
Net interest
expense
|
(20,479)
|
(10,811)
|
(9,668)
|
89.4
|
(47,385)
|
(40,653)
|
(6,732)
|
16.6
|
|
Foreign exchange (loss)
gain
|
(40,126)
|
14,455
|
(54,581)
|
(377.6)
|
(47,968)
|
19,154
|
(67,122)
|
(350.4)
|
|
Gain on property
and
equipment
|
76
|
—
|
76
|
100.0
|
96
|
13
|
83
|
638.5
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income
tax
|
(47,225)
|
34,449
|
(81,674)
|
(237.1)
|
(2,611)
|
137,044
|
(139,655)
|
(101.9)
|
|
Income tax
expense
|
(2,200)
|
(6,161)
|
3,961
|
(64.3)
|
(13,152)
|
(35,414)
|
22,262
|
(62.9)
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
from
continuing operations
|
(49,425)
|
28,288
|
(77,713)
|
(274.7)
|
(15,763)
|
101,630
|
(117,393)
|
(115.5)
|
|
Net income (loss)
from
discontinued operations, net
of taxes(4)
|
42,829
|
8,333
|
34,496
|
414.0
|
(140,686)
|
4,476
|
(145,162)
|
(3,243.1)
|
|
Net (loss)
income
|
(6,596)
|
36,621
|
(43,217)
|
(118.0)
|
(156,449)
|
106,106
|
(262,555)
|
(247.4)
|
|
Net income attributable
to non-
controlling interest
|
1,012
|
2,443
|
(1,431)
|
(58.6)
|
2,051
|
4,753
|
(2,702)
|
(56.8)
|
|
Net (loss) income
attributable
to Shareholders
|
(7,608)
|
34,178
|
41,786
|
122.3
|
(158,500)
|
101,353
|
(259,853)
|
(256.4)
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(3)
|
52,665
|
54,643
|
(1,978)
|
(3.6)
|
211,579
|
221,535
|
(9,956)
|
(4.5)
|
|
Adjusted
EBT(3)
|
15,170
|
17,038
|
(1,868)
|
(11.0)
|
62,093
|
79,720
|
(17,627)
|
(22.1)
|
|
Adjusted Net
Income(3)
|
10,565
|
10,704
|
(139)
|
(1.3)
|
46,302
|
51,993
|
(5,691)
|
(10.9)
|
|
(1)
|
The results of
discontinued operations (RAL segment) have been excluded from both
current and prior period figures in accordance with IFRS 5 to
conform to current period presentation. All amounts presented and
discussed in this release are from continuing operations unless
noted.
|
|
(2)
|
Air Canada agreed to
compensate Jazz for the one-time impact of the wage increase on the
Jazz defined benefit pension plan of $29.9 million in
2023.
|
|
(3)
|
These are non-GAAP
financial measures that are not recognized measures for financial
statement presentation under GAAP. As such, they do not have
standardized meanings, may not be comparable to similar measures
presented by other issuers and should not be considered a
substitute for or superior to GAAP results.
|
|
(4)
|
Discontinued operations
includes $49.9 million in foreign exchange gains, recycled from
other comprehensive income, as a result of the divestiture of the
RAL business.
|
Post Sale Pro forma Non-GAAP Financial Measures December 31, 2024
The pro forma financial information in this section is based on
the audited consolidated financial statements of Chorus for the
year ended December 31, 2024 (the "Q4 2024 Statements)
and has been prepared to retroactively illustrate the financial
impact of the Transaction and subsequent debt reduction on Chorus
had the Transaction closed on January 1,
2024 for the purposes of metrics which are based on the
trailing 12 months ended December 31,
2024 and December 31, 2023 for
all other metrics. The pro forma adjustments to the Q4 2024
Statements are not audited and are based on current management
estimates and assumptions. Furthermore, since the pro forma
information is based on historical financial results, it is not
indicative of future financial results and should not be regarded
as a forecast or projection of Chorus' future earnings, financial
position or cash flows. Therefore, undue reliance should not be
placed on the pro forma information. (See cautionary statement
regarding forward-looking information below.)
On December 31, 2024
Chorus repaid all of its outstanding Series A Debentures
($86.3 million aggregate principal
amount) together with all accrued and unpaid interest thereon and
redeemed all of the outstanding Preferred Shares in the amount of
US $363.3 million comprised of US
$300.0 million Preferred Shares and a
MOIC of US $63.3 million net of
dividends paid, in each case for cash and repaid the balance
outstanding under the Operating Credit Facility.
On December 9, 2024, Chorus
announced offers to purchase the Series B Debentures and Series C
Debentures in accordance with the terms of the relevant indentures.
On February 3, 2025, Chorus purchased
for cancellation a total of $43.8
million aggregate principal amount of Series B Debentures
and a total of $37.8 million
aggregate principal amount of Series C Debentures pursuant to those
offers. As of the date of this MD&A, $28.7 million aggregate principal amount of
Series B Debentures and $47.2 million
aggregate principal amount of Series C Debentures remain
outstanding.
The redemption of the Preferred Shares, the significant debt
reduction and reduction in interest and preferred dividend costs,
has significantly strengthened Chorus' balance sheet and improved
key financial metrics.
The following table provides a summary of the use of the net
proceeds from the Transaction and repayment of corporate
financings:
|
(in thousands of
Canadian dollars)
|
|
|
|
|
Net proceeds, net of
transaction costs(1)
|
854,089
|
|
Redemption/Repayment
December 2024:
|
|
|
Series A
Debentures
|
86,250
|
|
Operating Credit
Facility
|
60,000
|
|
Preferred
Shares(2)
|
523,691
|
|
Redemption/Repayment
Q1 2025:
|
|
|
Series B Debentures
and Series C Debentures(3)
|
81,570
|
|
751,511
|
|
|
|
Net cash
remaining
|
102,578
|
|
(1)
|
The net proceeds of
$854.1 million are net of transaction costs of $32.6 million. The
proceeds were converted to CAD at 1.4038 from USD using the
exchange rate as of December 6, 2024 and excludes cash sold in the
RAL business of $194.0 million.
|
|
(2)
|
Chorus was required to
pay a MOIC (net of cash dividends paid) of $91.2 million (US $63.3
million) on the redemption of the $432.5 million (US $300.0
million) Preferred Shares. The Preferred Shares were redeemed on
December 31, 2024 when the USD to CAD foreign exchange rate was
1.4416.
|
|
(3)
|
On February 3, 2025,
Chorus purchased for cancellation $43.8 million aggregate principal
amount of Series B Debentures and $37.8 million aggregate principal
amount of Series C Debentures.
|
The following pro forma non-GAAP adjusted metrics reflect
continuing operations and the effect of the repayment and the
repayment of corporate financings on the December 31, 2024 results.
Pro Forma Adjusted Earnings available to Common Shareholders
per Common Share
|
(in thousands of
Canadian dollars, except per share amounts)
|
Three months
ended
December 31,
2024
$
|
Year
ended
December 31,
2024
$
|
|
Adjusted Earnings
available to Common Shareholders as reported
from continuing operations(1)(2)
|
10,565
|
28,475
|
|
Interest expense
savings, net of tax(3)
|
5,892
|
15,857
|
|
Preferred Share
dividend savings
|
—
|
17,827
|
|
Pro Forma Adjusted
Earnings available to Common Shareholders
from continuing operations(1)
|
16,457
|
62,159
|
|
Pro Forma Adjusted
Earnings available to Common Shareholders
per Common Share, basic from continuing
operations(1)
|
0.60
|
2.27
|
|
(1)
|
These are non-GAAP
financial measures that are not recognized measures for financial
statement presentation under GAAP. As such, they do not have
standardized meanings, may not be comparable to similar measures
presented by other issuers and should not be considered a
substitute for or superior to GAAP results.
|
|
(2)
|
The results of
discontinued operations (RAL segment) have been excluded from both
current and prior period figures in accordance with IFRS 5 to
conform to current period presentation. All amounts presented and
discussed in this release are from continuing operations unless
noted.
|
|
(3)
|
The interest expense on
the actual redemption of the Unsecured Debentures and the Operating
Credit Facility for the three months and year ended December 31,
2024 was $8.1 million and $21.7 million, respectively. The interest
expense was tax effected using a 27.0% tax rate.
|
Pro Forma Leverage Ratio
|
(in thousands of
Canadian dollars)
|
December 31,
2024
$
|
|
Long-term debt and
lease liabilities (including current portion)
|
516,379
|
|
Less:
|
|
|
Series B Debentures
and Series C Debentures(1)
|
(81,570)
|
|
434,809
|
|
Less:
|
|
|
Cash on hand at
December 31, 2024
|
(222,216)
|
|
Cash required to repay
Series B Debentures and Series C
Debentures(1)
|
81,570
|
|
Pro Forma Adjusted
Net Debt(2)
|
294,163
|
|
Adjusted
EBITDA(2)(3)
|
211,579
|
|
Pro Forma Leverage
Ratio(2)
|
1.4
|
|
(1)
|
On February 3, 2025,
Chorus purchased for cancellation $43.8 million aggregate principal
amount of Series B Debentures and $37.8 million aggregate principal
amount of Series C Debentures. In addition to other redemption
rights set out in the relevant indentures, the Corporation retains
the ability to redeem the outstanding Series B Debentures at any
time on and after June 30, 2025 at the principal amount of $28.7
million plus accrued and unpaid interest thereon and the
outstanding Series C Debentures at any time on and after March 31,
2026 at the principal amount of $47.2 million plus accrued and
unpaid interest thereon.
|
|
(2)
|
These are non-GAAP
financial measures or non-GAAP ratios that are not recognized
measures for financial statement presentation under GAAP. As such,
they do not have standardized meanings, may not be comparable to
similar measures presented by other issuers and should not be
considered a substitute for or superior to GAAP results.
|
|
(3)
|
The results of
discontinued operations (RAL segment) have been excluded from both
current and prior period figures in accordance with IFRS 5 to
conform to current period presentation. All amounts presented and
discussed in this release are from continuing operations unless
noted.
|
Pro Forma Free Cash Flow and
Pro Forma Free Cash Flow after Repayment on Long-term
Borrowings(3)
|
(in thousands of
Canadian dollars)
|
Three months
ended
December 31,
2024
$
|
Year
ended
December 31,
2024
$
|
|
Free Cash Flow as
reported(1)(2)
|
27,482
|
118,787
|
|
Interest savings, net
of tax(3)
|
2,716
|
11,246
|
|
Pro Forma Free Cash
Flow(1)
|
30,198
|
130,033
|
|
|
|
|
Repayment on
long-term borrowings(2)(4)
|
(25,561)
|
(85,224)
|
|
Pro Forma Free Cash
Flow after repayment on long-term borrowings(1)(4)
|
4,637
|
44,809
|
|
(1)
|
These are non-GAAP
financial measures that are not recognized measures for financial
statement presentation under GAAP. As such, they do not have
standardized meanings, may not be comparable to similar measures
presented by other issuers and should not be considered a
substitute for or superior to GAAP results.
|
|
(2)
|
The results of
discontinued operations (RAL segment) have been excluded from both
current and prior period figures in accordance with IFRS 5 to
conform to current period presentation. All amounts presented and
discussed in this release are from continuing operations unless
noted.
|
|
(3)
|
The interest expense on
the actual redemption of the Unsecured Debentures and the Operating
Credit Facility for the three months and year ended December 31,
2024 was $3.7 million and $15.4 million, excluding interest
accretion of $4.3 million and $6.3 million, respectively. The
interest expense was tax effected using a 27.0% tax
rate.
|
|
(4)
|
Excludes repayment of
$nil and $33.9 million on the Unsecured Credit Facility for the
three months and year ended December 31, 2024,
respectively.
|
Pro Forma Adjusted Return on Equity
|
(in thousands of
Canadian dollars)
|
Trailing
12-months
ended
December 31,
2024
$
|
|
Adjusted Earnings
Available to Common Shareholders as
reported(1)(2)
|
28,475
|
|
Add: Interest savings,
net of tax(3)
|
15,857
|
|
Add: Preferred Share
dividends declared
|
17,827
|
|
Pro Forma Adjusted
Earnings Available to Common Shareholders(2)
|
62,159
|
|
Average equity
attributable to Common Shareholders excluding cash
|
|
|
|
|
Average Shareholders'
equity as reported
|
896,209
|
|
|
|
Add (Deduct) items
to get to average equity attributable to Common Shareholders
excluding
cash
|
|
|
Average
Non-controlling interest
|
(43,293)
|
|
Average Preferred
Shares
|
(187,609)
|
|
Average
Cash
|
(126,385)
|
|
Average Cash to redeem
the Series B Debentures and Series C
Debentures(4)
|
40,785
|
|
579,707
|
|
Pro Forma Adjusted
Return on Equity(2)
|
10.7 %
|
|
(1)
|
The results of
discontinued operations (RAL segment) have been excluded from both
current and prior period figures in accordance with IFRS 5 to
conform to current period presentation. All amounts presented and
discussed in this release are from continuing operations unless
noted.
|
|
(2)
|
These are non-GAAP
financial measures that are not recognized measures for financial
statement presentation under GAAP. As such, they do not have
standardized meanings, may not be comparable to similar measures
presented by other issuers and should not be considered a
substitute for or superior to GAAP results.
|
|
(3)
|
The interest expense on
the actual redemption of the Unsecured Debentures and the Operating
Credit Facility for the trailing 12-months ended December 31, 2024
was $21.7 million. The interest expense was tax effected using a
27.0% tax rate.
|
|
(4)
|
On February 3, 2025,
Chorus purchased for cancellation $43.8 million aggregate principal
amount of Series B Debentures and $37.8 million aggregate principal
amount of Series C Debentures. In addition to other redemption
rights set out in the relevant indentures, the Corporation retains
the ability to redeem the outstanding Series B Debentures at any
time on and after June 30, 2025 at the principal amount of $28.7
million plus accrued and unpaid interest thereon and the
outstanding Series C Debentures at any time on and after March 31,
2026 at the principal amount of $47.2 million plus accrued and
unpaid interest thereon.
|
Outlook
(See cautionary statement regarding forward-looking information
below.)
The discussion that follows includes forward-looking
information. This outlook provides current expectations for the
Jazz business in 2025 and 2026. This information may not be
appropriate for other purposes. The outlook was updated to
reflect higher anticipated USD/CAD foreign exchange rates.
The CPA provides a Fixed Margin to Jazz regardless of flying
levels; therefore, any variations in flying are not expected to
have any impact on Jazz's earnings. In addition, Jazz receives
compensation for aircraft leased under the CPA that generates
predictable Free Cash Flows. Jazz aircraft have amortizing debt
that will be fully paid-off at the end of the original lease term
under the CPA. At the end of each lease, Jazz will either extend
the lease, sell or part-out each aircraft. Subsequent aircraft
leases will continue to produce predictable Free Cash Flow at lower
rates as the aircraft will be unencumbered.
|
Actual
|
Annual
Forecast(1)
|
|
(in thousands of
Canadian dollars)
|
2024
$
|
2025
$
|
2026(2)
$
|
|
Fixed
Margin(3)
|
61,280
|
59,600
|
43,900
|
|
Aircraft leasing
under the CPA
|
|
|
|
|
Revenue(4)
|
133,174
|
123,000
|
109,000
|
|
Payment on long-term
debt and interest
|
97,126
|
81,000
|
72,000
|
|
Total Fixed Margin
and Aircraft leasing under the CPA
less payment on long-term debt and
interest
|
97,328
|
101,600
|
80,900
|
|
Wholly-owned aircraft
leased under the CPA (end of
period)(4)
|
48
|
45
|
39
|
|
Wholly-owned aircraft
leased under the CPA available for
re-lease (end of
period)(4)
|
—
|
3
|
9
|
|
(1)
|
The forecast uses a
foreign exchange rate of 1.4000 for 2025 and 2026 (previously at
1.3200 and 1.2900 for 2026) to translate USD to CAD.
|
|
(2)
|
Includes estimates for
future market lease rates for 12 Dash 8-400's for 2026 with
contracted lease extensions to 2030.
|
|
(3)
|
The Fixed Margin will
decrease to no less than $59.6 million in 2025 and no less than
$43.9 million in 2026 with no further changes
thereafter.
|
|
(4)
|
Leases on six Dash
8-400s expire in mid-2026.
|
Portfolio of Aircraft Leasing under the CPA
- Current fleet of 48 wholly-owned aircraft and five spare
engines
- Current net book value of $793.4
million
- Future contracted lease revenue US $385.4 million1,2
- Current weighted average fleet age of 8.5
years3
- Current weighted average remaining lease term of 4.9
years3
- Long-term debt of $347.3 million
(US $241.4 million)
- 100% of debt has a fixed rate of interest
- Current weighted average cost of borrowing of 3.32%
|
1
|
See cautionary
statement regarding forward-looking information below.
|
|
2
|
The estimates are based
on agreed lease rates in the CPA and certain assumptions and
estimates for future market lease rates related to new and extended
leases under the CPA.
|
|
3
|
Fleet age and remaining
lease term is calculated based on the weighted-average of the
aircraft net book value.
|
Covered Aircraft
The actual and forecasted Covered Aircraft under the CPA for the
years 2024 to 2026 is as follows:
|
|
Actual
|
Change
|
Forecast
|
Change
|
Forecast
|
|
2024
|
2025
|
2025
|
2026
|
2026
|
|
|
|
|
|
|
|
|
Dash 8-400
|
Aircraft Leased under
the CPA
|
34
|
(3)
|
31
|
(6)
|
25
|
|
Other Covered
Aircraft
|
5
|
(5)
|
—
|
—
|
—
|
|
|
39
|
(8)
|
31
|
(6)
|
25
|
|
|
|
|
|
|
|
|
CRJ900
|
Aircraft Leased under
the CPA
|
14
|
—
|
14
|
—
|
14
|
|
Other Covered
Aircraft
|
21
|
—
|
21
|
(5)
|
16
|
|
|
35
|
—
|
35
|
(5)
|
30
|
|
|
|
|
|
|
|
|
CRJ200
|
Aircraft Leased under
the CPA
|
—
|
—
|
—
|
—
|
—
|
|
Other Covered
Aircraft(1)
|
15
|
—
|
15
|
(15)
|
—
|
|
|
15
|
—
|
15
|
(15)
|
—
|
|
|
|
|
|
|
|
|
E175
|
Aircraft Leased under
the CPA
|
—
|
—
|
—
|
—
|
—
|
|
Other Covered
Aircraft
|
25
|
—
|
25
|
—
|
25
|
|
|
25
|
—
|
25
|
—
|
25
|
|
|
|
|
|
|
|
|
Total
|
Aircraft Leased under
the CPA(2)(3)
|
48
|
(3)
|
45
|
(6)
|
39
|
|
Other Covered
Aircraft
|
66
|
(5)
|
61
|
(20)
|
41
|
|
|
114
|
(8)
|
106
|
(26)
|
80
|
|
(1)
|
The 15 CRJ200s are
currently non-operational under the CPA.
|
|
(2)
|
After 2026, the 39
owned Aircraft Leased under the CPA have lease expiry dates from
2027 to 2033. Air Canada will determine the composition of the
Covered Aircraft fleet on the condition that the fleet must have a
minimum of 80 aircraft with 75-78 seats. As leases in respect of
owned aircraft mature, the minimum 80 Covered Aircraft fleet will
be composed of owned aircraft with lease extensions and/or other
Covered Aircraft sourced by Air Canada.
|
|
(3)
|
Lease expiry dates for
owned aircraft are as follows: Dash 8-400's: six expiries in
November 2027; seven expiries in 2028 and 12 expiries in 2030; and
for CRJ900's: five in 2028; eight in 2032 and one in
2033.
|
Capital Expenditures
Capital expenditures in 2025 are expected to be as follows:
|
(in thousands of
Canadian dollars)
|
Year ended
December 31,
2024
$
|
Annual Forecast
2025
$
|
|
Capital expenditures,
excluding aircraft acquisitions
|
13,547
|
20,000
|
to
|
25,000
|
|
Capitalized major
maintenance overhauls(1)
|
19,452
|
8,000
|
to
|
13,000
|
|
Aircraft acquisitions
and improvements
|
19,892
|
2,500
|
to
|
7,500
|
|
52,891
|
30,500
|
to
|
45,500
|
|
(1)
|
The 2025 plan includes
between $3.0 million to $7.0 million of costs that are expected to
be included in and recovered through the Controllable Costs. Actual
2024 includes $12.6 million which forms part of Controllable
Costs.
|
Use of Defined Terms
Capitalized terms used but not defined in this news release have
the meanings given to them in management's discussion and analysis
of results of operations and financial condition ("MD&A") dated
the date hereof, which is available on Chorus' website
(www.chorusaviation.com) and under Chorus' profile on SEDAR+
(www.sedarplus.ca). In this news release, the term
"shareholders" refers only to holders of Common Shares.
Investor Conference Call / Audio Webcast
Chorus will hold an analyst call at 9:00 AM ET on Thursday, February 20, 2025, to discuss the
fourth quarter and year-end 2024 financial results. The call may be
accessed by dialing 1-888-699-1199. The call will be simultaneously
audio webcast via: https://app.webinar.net/O7wPl32YNRM.
This is a listen-in only audio webcast.
The conference call webcast will be archived on Chorus' website
at www.chorusaviation.com under Investors > Reports.
A playback of the call can also be accessed until midnight ET, February 27,
2025, by dialing toll-free 1-888-660-6345 and using passcode
50070 # (pound key).
NON-GAAP FINANCIAL MEASURES
This news release references several non-GAAP financial measures
and ratios to supplement the analysis of Chorus'
results. Chorus uses these non-GAAP measures to evaluate and
assess performance. These non-GAAP measures are generally numerical
measures of Chorus' financial performance, financial position, or
cash flows, that include or exclude amounts from the most
comparable GAAP measure. As such, these measures are not recognized
for financial statement presentation under GAAP, do not have
standardized meanings, may not be comparable to similar measures
presented by other entities, and should not be considered a
substitute for or superior to GAAP results. For further information
on non-GAAP measures used in this news release, please refer to
Section 19 (Non-GAAP Financial Measures) of the MD&A
dated February 19, 2025, which is
available on Chorus' website (www.chorusaviation.com) and under
Chorus' profile on SEDAR+ (www.sedarplus.ca). Reconciliations of
non-GAAP measures to their nearest GAAP measures are provided
below.
Adjusted Net Income, Adjusted EBT, Adjusted EBITDA
|
(expressed in
thousands of Canadian dollars)
|
Three months ended
December 31,
|
Year ended December
31,
|
|
2024
$
|
2023
$
|
Change
$
|
2024
$
|
2023
$
|
Change
$
|
|
|
(revised)(1)
|
|
|
(revised)(1)
|
|
|
Net (loss)
income
|
(6,596)
|
36,621
|
(43,217)
|
(156,449)
|
106,106
|
(262,555)
|
|
Less: Net income (loss)
from discontinued
operations, net of taxes
|
42,829
|
8,333
|
34,496
|
(140,686)
|
4,476
|
(145,162)
|
|
Net (loss) income
from continuing
operations
|
(49,425)
|
28,288
|
(77,713)
|
(15,763)
|
101,630
|
(117,393)
|
|
Add
(Deduct) items to get to Adjusted Net
Income
|
|
|
|
|
|
|
|
Impairment
provisions(2)
|
10,517
|
—
|
10,517
|
10,517
|
—
|
10,517
|
|
Employee separation
program(3)
|
1,675
|
638
|
1,037
|
2,542
|
1,442
|
1,100
|
|
Defined Benefit Pension
Revenue(4)
|
—
|
—
|
—
|
—
|
(29,916)
|
29,916
|
|
Interest accretion on
Preferred Shares
|
10,445
|
—
|
10,445
|
10,445
|
—
|
10,445
|
|
Realized foreign
exchange gain on cash(5)
|
(13,732)
|
—
|
(13,732)
|
(13,732)
|
—
|
(13,732)
|
|
Realized foreign
exchange loss on
Preferred Shares(6)
|
31,307
|
—
|
31,307
|
31,307
|
—
|
31,307
|
|
Realized foreign
exchange gain on
intercompany loan(7)
|
—
|
(26,437)
|
26,437
|
—
|
(26,437)
|
26,437
|
|
Unrealized foreign
exchange loss (gain)
|
22,183
|
8,388
|
13,795
|
23,625
|
(2,413)
|
26,038
|
|
Tax (recovery) expense
on adjusted items
|
(2,405)
|
(173)
|
(2,232)
|
(2,639)
|
7,687
|
(10,326)
|
|
59,990
|
(17,584)
|
77,574
|
62,065
|
(49,637)
|
111,702
|
|
Adjusted Net
Income
|
10,565
|
10,704
|
(139)
|
46,302
|
51,993
|
(5,691)
|
|
Add (Deduct) items
to get to Adjusted EBT
|
|
|
|
|
|
|
|
Income tax
expense
|
2,200
|
6,161
|
(3,961)
|
13,152
|
35,414
|
(22,262)
|
|
Tax recovery (expense)
on adjusted items
|
2,405
|
173
|
2,232
|
2,639
|
(7,687)
|
10,326
|
|
Adjusted
EBT
|
15,170
|
17,038
|
(1,868)
|
62,093
|
79,720
|
(17,627)
|
|
Add (Deduct) items
to get to Adjusted
EBITDA
|
|
|
|
|
|
|
|
Net interest
expense
|
10,034
|
10,811
|
(777)
|
36,940
|
40,653
|
(3,713)
|
|
Depreciation and
amortization excluding
impairment
|
27,169
|
23,200
|
3,969
|
105,874
|
91,479
|
14,395
|
|
Foreign exchange
loss
|
368
|
3,594
|
(3,226)
|
6,768
|
9,696
|
(2,928)
|
|
Gain on disposal of
property and
equipment
|
(76)
|
—
|
(76)
|
(96)
|
(13)
|
(83)
|
|
37,495
|
37,605
|
(110)
|
149,486
|
141,815
|
7,671
|
|
Adjusted
EBITDA
|
52,665
|
54,643
|
(1,978)
|
211,579
|
221,535
|
(9,956)
|
|
(1)
|
The results of
discontinued operations (RAL segment) have been excluded from both
current and prior period figures in accordance with IFRS 5 to
conform to current period presentation. All amounts presented and
discussed in this release are from continuing operations unless
noted.
|
|
(2)
|
Impairment provisions
related to planned part-out of Voyageur's non-operational owned
aircraft.
|
|
(3)
|
Included in operating
expenses.
|
|
(4)
|
Air Canada agreed to
compensate Jazz for the one-time impact of the wage increase on the
Jazz defined benefit pension plan of $29.9 million.
|
|
(5)
|
Foreign exchange gains
on US dollar denominated cash held between the dates December 6,
2024 and December 31, 2024, being the dates Chorus received the net
proceeds from the Transaction and the redemption of the Preferred
Shares, respectively.
|
|
(6)
|
Realized foreign
exchange on Preferred Shares relates to the foreign exchange loss
on settlement of the Preferred Share liability.
|
|
(7)
|
Realized foreign
exchange gain relates to the extinguishment of intercompany loan
receivables in the fourth quarter of 2023. During the term of these
intercompany loan receivables the unrealized foreign exchange gain
or loss was recognized on the loan receivable. The intercompany
loan payable was recorded in one of Chorus' subsidiaries with a USD
functional currency such that the foreign exchange offset was
recognized in exchange differences on foreign operations in other
comprehensive income. The elimination of the realized foreign
exchange from Adjusted Net Income reflects the economics of the
intercompany transaction.
|
Adjusted Earnings available to Common Shareholders per Common
Share
Adjusted Earnings available to Common Shareholders per Common
Share is used by Chorus to assess performance and is calculated as
Adjusted Net Income less non-controlling interest and Preferred
Share dividends declared, excluding the MOIC.
Pro Forma Adjusted Earnings available to Common Shareholders per
Common Share is calculated as Adjusted Earnings available to Common
Shareholders plus anticipated interest savings on repayment of
corporate financings and Preferred Share dividends declared,
excluding the MOIC.
|
(expressed in
thousands of Canadian dollars,
except per Share amounts)
|
Three months ended
December 31,
|
Year ended December
31,
|
|
2024
$
|
2023
$
|
Change
$
|
2024
$
|
2023
$
|
Change
$
|
|
|
(revised)(1)
|
|
|
(revised)(1)
|
|
|
Adjusted Net Income
from
continuing operations
|
10,565
|
10,704
|
(139)
|
46,302
|
51,993
|
(5,691)
|
|
Add (Deduct) items
to get to
Adjusted Earnings available to
Common Shareholders
|
|
|
|
|
|
|
|
Preferred Share
dividends
declared, excluding MOIC(2)
|
—
|
(8,940)
|
8,940
|
(17,827)
|
(35,426)
|
17,599
|
|
Adjusted Earnings
available to
Common Shareholders -
continuing operations(2)
|
10,565
|
1,764
|
8,801
|
28,475
|
16,567
|
11,908
|
|
Adjusted Earnings
available to
Common Shareholders per
Common Share, basic -
continuing operations(2)
|
0.39
|
0.06
|
0.33
|
1.04
|
0.59
|
0.45
|
|
(1)
|
The results of
discontinued operations (RAL segment) have been excluded from both
current and prior period figures in accordance with IFRS 5 to
conform to current period presentation. All amounts presented and
discussed in this release are from continuing operations unless
noted.
|
|
(2)
|
Adjusted Earnings
available to Common Shareholders excludes the MOIC payment of $91.2
million as the Preferred Shares were redeemed early due to the sale
of the RAL business.
|
Leverage Ratio
Leverage Ratio is used by Chorus as a means to measure financial
leverage. Leverage Ratio is calculated by dividing Net debt by
trailing 12-month Adjusted EBITDA. Management believes Leverage
Ratio to be a useful ratio when monitoring and managing debt
levels. In addition, as leverage is a measure frequently analyzed
for public companies, Chorus has calculated the amount to assist
readers in this review. Leverage Ratio should not be construed as a
measure of cash flows. Net debt is a key component of capital
management for Chorus and provides management with a measure of its
net indebtedness.
Pro Forma Leverage Ratio is calculated by dividing Net debt,
adjusted to remove the anticipated repayment of the Series B
Debentures and Series C Debentures, by trailing 12-month Adjusted
EBITDA.
|
(expressed in
thousands of Canadian dollars)
|
December 31,
2024
|
December 31,
2023
|
Change
|
|
$
|
$
|
$
|
|
|
(revised)(1)
|
|
|
Long-term debt and
lease liabilities (including
current portion)(2)
|
516,379
|
1,755,580
|
(1,239,201)
|
|
Less:
|
|
|
|
|
Long-term debt and
lease liabilities (including
current portion) related to discontinued
operations(2)
|
—
|
(986,921)
|
986,921
|
|
Cash(1)
|
(222,216)
|
(85,985)
|
(136,231)
|
|
Cash related to
discontinued operations(1)(2)
|
—
|
55,432
|
(55,432)
|
|
Adjusted Net
Debt
|
294,163
|
738,106
|
(443,943)
|
|
Adjusted
EBITDA
|
211,579
|
221,535
|
(9,956)
|
|
Leverage
Ratio
|
1.4
|
3.3
|
(1.9)
|
|
(1)
|
The results of
discontinued operations (RAL segment) have been excluded from both
current and prior period figures in accordance with IFRS 5 to
conform to current period presentation. All amounts presented and
discussed in this release are from continuing operations unless
noted.
|
|
(2)
|
Long-term debt and
lease liabilities related to discontinued operations of $986.9
million and cash of $55.4 million have been removed from December
31, 2023 for comparative purposes.
|
Free Cash Flow
Free Cash Flow is a non-GAAP measure used as an indicator of
financial strength and performance. Chorus believes that this
measurement is useful as an indicator of its ability to service its
debt, meet other ongoing obligations and reinvest in the
Corporation and return capital to Common Shareholders. Readers are
cautioned that Free Cash Flow does not represent residual cash flow
available for discretionary expenditures.
Free Cash Flow is defined as cash provided by operating
activities less net changes in non-cash balances related to
operations, capital expenditures excluding aircraft acquisitions
and improvements plus net proceeds on asset sales (proceeds on
disposal of property and equipment less the related debt repayments
for the assets sold).
Pro Forma Free Cash Flow is
defined as Free Cash Flow plus anticipated interest savings on
repayment of corporate financings.
Pro Forma Free Cash Flow after
repayment on long-term borrowings is defined as Free Cash Flow plus
anticipated interest savings on repayment of corporate financings
less repayment on long-term borrowings.
The following table provides a reconciliation of Free Cash Flow
to cash flows from operating activities, which is the most
comparable financial measure calculated and presented in accordance
with GAAP:
|
(expressed in
thousands of Canadian dollars)
|
Three months ended
December 31,
|
Year ended December
31,
|
|
2024
|
1905
|
Change
|
2024
|
1905
|
Change
|
|
$
|
$
|
$
|
$
|
$
|
$
|
|
|
(revised)(1)
|
|
|
(revised)(1)
|
|
|
Cash provided by
operating
activities from continuing
operations
|
21,099
|
(16,498)
|
37,597
|
172,806
|
182,674
|
(9,868)
|
|
Add
(Deduct)
|
|
|
|
|
|
|
|
Net changes in
non-cash balances
related to operations
|
16,867
|
56,548
|
(39,681)
|
(21,020)
|
13,404
|
(34,424)
|
|
Capital expenditures,
excluding
aircraft acquisitions
|
(4,244)
|
(4,340)
|
96
|
(13,547)
|
(14,237)
|
690
|
|
Capitalized major
maintenance
overhauls
|
(6,240)
|
(6,080)
|
(160)
|
(19,452)
|
(15,776)
|
(3,676)
|
|
Free Cash
Flow
|
27,482
|
29,630
|
(2,148)
|
118,787
|
166,065
|
(47,278)
|
|
(1)
|
The results of
discontinued operations (RAL segment) have been excluded from both
current and prior period figures in accordance with IFRS 5 to
conform to current period presentation. All amounts presented and
discussed in this release are from continuing operations unless
noted.
|
Adjusted Return on Equity
Adjusted Return on Equity is a non-GAAP financial measure used
to gauge a corporation's profitability and how efficient it is in
generating profits. Adjusted Return on Equity is calculated based
on Chorus' Adjusted Net Income less non-controlling interest and
Preferred Share dividends declared divided by Average Shareholders'
equity excluding non-controlling interest, Preferred Shares and
cash.
Pro Forma Adjusted Return on Equity is calculated based on
Adjusted Earnings available to Common Shareholders plus anticipated
interest savings on repayment of corporate financings and Preferred
Share dividends declared divided by Average Shareholders' equity
excluding non-controlling interest, Preferred Shares, cash on hand
and cash required to repay the Series B Debentures and Series C
Debentures.
|
(expressed in
thousands of Canadian dollars)
|
Trailing 12-months
ended
|
|
December
31,
|
December
31,
|
|
|
2024
|
2023
|
Change
|
|
$
|
$
|
$
|
|
|
(revised)(1)
|
|
|
|
|
|
|
Adjusted Net Income
from continuing operations(1)
|
46,302
|
51,993
|
(5,691)
|
|
Add (Deduct) items
to get to Adjusted Earnings available
to Common Shareholders
|
|
|
|
|
Preferred Share
dividends declared, excluding MOIC
|
(17,827)
|
(35,426)
|
17,599
|
|
Adjusted Earnings
available to Common Shareholders(2)
|
28,475
|
16,567
|
11,908
|
|
|
|
|
|
|
|
|
|
Average equity
attributable to Common Shareholders
excluding cash
|
|
|
|
|
Average Shareholders'
equity
|
896,209
|
1,274,446
|
(378,237)
|
|
Add (Deduct) items
to get to average equity attributable to
Common Shareholders excluding cash
|
|
|
|
|
Average
Non-controlling interest
|
(43,293)
|
(87,718)
|
44,425
|
|
Average Preferred
Shares
|
(187,609)
|
(375,217)
|
187,608
|
|
Average
Cash(1)
|
(126,385)
|
(24,926)
|
(101,459)
|
|
538,922
|
786,585
|
(247,663)
|
|
Adjusted Return on
Equity(1)
|
5.3 %
|
2.1 %
|
3.2 %
|
|
(1)
|
The results of
discontinued operations (RAL segment) have been excluded from both
current and prior period figures in accordance with IFRS 5 to
conform to current period presentation. All amounts presented and
discussed in this release are from continuing operations unless
noted.
|
|
(2)
|
Adjusted Earnings
available to Common Shareholders excludes the MOIC payment of $91.2
million as the Preferred Shares were redeemed early due to the sale
of the RAL business.
|
Forward-Looking Information
This news release includes forward-looking information and
statements within the meaning of applicable securities laws
(collectively, "forward-looking information"). Forward-looking
information is identified by the use of terms and phrases such as
"anticipate", "believe", "could", "estimate", "expect", "intend",
"may", "plan", "potential", "predict", "project", "will", "would",
and similar terms and phrases, including negative versions thereof.
All information and statements other than statements of historical
fact are forward-looking and by their nature, are based on various
underlying assumptions and expectations that are subject to known
and unknown risks, uncertainties and other factors that may cause
actual future results, performance or achievements to differ
materially from those indicated in the forward-looking information.
As a result, there can be no assurance that the forward-looking
information included in this news release will prove to be accurate
or correct.
Examples of forward-looking information in this news release
include the discussion in the Outlook section and statements
regarding Chorus' future performance, growth prospects and the
ability to return capital to Common Shareholders. Actual results
may differ materially from those anticipated in forward-looking
information for a number of reasons including: changes in the
aviation industry and general economic conditions; the emergence of
disputes under the CPA; a deterioration in Air Canada's financial
condition; any default by Chorus under debt covenants; asset
impairments; changes in law; the imposition of tariffs on Canadian
exports or adverse changes to existing trade agreements and/or
relationships; and the risk factors in Chorus' Annual Information
Form dated February 19, 2025, and in
Chorus' public disclosure record available under its profile on
SEDAR+ at www.sedarplus.ca.
The forward-looking information contained in this news release
represents Chorus' expectations as of the date of this news release
(or as of the date they are otherwise stated to be made) and is
subject to change after such date. Chorus disclaims any intention
or obligation to update or revise any forward-looking information
as a result of new information, subsequent events or otherwise,
except as required by applicable securities laws. Readers are
cautioned that the foregoing factors and risks are not
exhaustive.
About Chorus Aviation Inc.
Chorus is a Canadian
company focused on aviation services businesses. Our operating
subsidiaries are: Jazz Aviation, the largest regional operator in
Canada and provider of regional
air services under the Air Canada Express brand; Voyageur Aviation,
a leading provider of specialty charter, aircraft modifications,
parts provisioning and in-service support services; and Cygnet
Aviation Academy, an industry leading accredited training academy
preparing pilots for direct entry into airlines. Together, Chorus'
subsidiaries provide services that encompass every stage of an
aircraft's lifecycle, including: aircraft acquisition and leasing;
aircraft refurbishment, engineering, modification, repurposing and
transition; contract flying; aircraft and component maintenance,
disassembly, and parts provisioning; and pilot training.
Chorus Class A Variable Voting Shares and Class B Voting Shares
trade on the Toronto Stock Exchange under the trading symbol 'CHR'.
Chorus 6.00% Convertible Senior Unsecured Debentures due
June 30, 2026, and 5.75% Senior
Unsecured Debentures due June 30,
2027 trade on the Toronto Stock Exchange under the trading
symbols 'CHR.DB.B', and 'CHR.DB.C' respectively.
www.chorusaviation.com.
SOURCE Chorus Aviation Inc.
