Press release from CNW Group
HNZ Group reports 2013 second quarter results
Tuesday, August 13, 2013
HNZ Group reports 2013 second quarter results17:41 EDT Tuesday, August 13, 2013
- Revenue of $64.0 million, versus $62.9 million last year
- EBITDA margin at 32.9% compared to 33.6% a year ago
- Net income of $12.6 million or $0.97 per share
- Strong financial position with working capital of $46.1 million and long-term debt-to-equity ratio of 0.19
MONTREAL, Aug. 13, 2013 /CNW Telbec/ - HNZ Group Inc. (TSX: HNZ.A, HNZ.B) ("the Corporation"), an international provider of helicopter transportation and related support services, today announced its financial and operating results for the second quarter ended June 30, 2013.
|Financial Highlights||Quarters ended June 30,||Six months ended June 30,|
|(in thousands of dollars, except per share data)||2013||2012||2013||2012|
|Net income (2)||12, 636||12,213||19, 150||20,393|
|Per share - basic and diluted ($)||0.97||0.93||1.47||1.56|
|Cash flows related to operating activities (3)||16,769||18,269||28,124||30,465|
|Weighted-average shares outstanding (all classes)||13,068,700||13,068,700||13,068,700||13,068,700|
|(1)||Net income before net financing charges, income taxes, depreciation and amortization and gain or loss on disposal of property, plant and equipment|
|(2)||Attributable to the shareholders of the Corporation|
|(3)||Before net changes in non-cash working capital balances and deferred revenues
SECOND QUARTER RESULTS
The Corporation generated revenues of $64.0 million, compared with revenue of $62.9 million in the second quarter of 2012. The increase in revenue was mainly due to an increase in Instrument Flight Rules (IFR) and Ancillary revenue, which was partially offset by a decrease in Visual Flight Rules (VFR) revenue. While the Corporation flew 15,365 hours compared to 17,060 hours in the second quarter of 2012, the positive mix of hours flown generated an increase in revenues.
IFR revenue increased by $2.2 million mainly due to increased activities in the North Warning System contract in Canada and an increase in the mining sector in Australia related to the renewed Rio Tinto contract. Ancillary revenue increased by $0.7 million due to an increase in the repair and maintenance revenues from the Nampa and Heli-Welders businesses partially offset by a reduction of third party aircraft lease revenue in the Southern Hemisphere. VFR revenue decreased by $1.8 million primarily due to a decrease in revenues in Canada and Afghanistan.
EBITDA for the second quarter of 2013 reached $21.0 million, compared to $21.1 million a year earlier. During the quarter, the Corporation recorded a foreign exchange net loss of $0.9 million compared to a net gain of $0.9 million for the same period in 2012.
Net income attributable to the shareholders of the Corporation totaled $12.6 million, or $0.97 per share, compared to $12.2 million, or $0.93 per share in the second quarter of 2012. The net income includes a net gain on disposal of property, plant and equipment including the sale of a building in Edmonton, Alberta. Reflecting the variation in net income, cash flows related to operating activities before net change in non-cash working capital balances and deferred revenues were $16.8 million in the second quarter of 2013, versus $18.3 million in the corresponding period a year earlier.
"Despite the current difficult economic conditions in the mining sector, the seasonal slowdown of activities in the Southern Hemisphere, as well as the negative impact of unfavorable exchange rates, HNZ generated strong results for the second quarter of 2013," said Mr. Don Wall, Chief Executive Officer of HNZ Group Inc. "Hours flown were in line with anticipated demand, and our mission in Afghanistan continued to perform as expected. The expanded 10-year contract with Rio Tinto in Australia, which began in May, positively impacted HNZ's second-quarter results. We are currently employing two newly acquired AW109 helicopters to perform our tasks under this contract. In the upcoming quarter, another AW109 will be deployed on this assignment."
As at June 30, 2013, the Corporation's financial position remains strong with working capital of $46.1 million and debt and bank indebtedness, net of cash and cash equivalents, of $51.4 million, with $48 million drawn under the Corporation revolving operating credit facility of $125 million that matures on January 31, 2017.The Corporation also has an option to increase the credit facility to $175 million subject to certain conditions. For the second quarter, the long-term debt-to-equity ratio was 0.19, compared to 0.16 as at the end of December 2012.
For the six-month period ended June 30, 2013, revenue reached $118.2 million, compared with revenue of $125.4 million in the corresponding period of 2012. This variation is mainly explained by a net decrease in VFR revenue of $5.1 million. This net decrease is mainly due to a decrease in revenues from the Canadian and Australian markets due to the current sluggish mining sector as well as the decrease in Afghanistan's contracted revenues. The contracts in Afghanistan, in aggregate, are still experiencing a level of activity not significantly different from those anticipated and previously announced. The Corporation flew 24,637 hours in the first six months of 2013, compared to 29,604 hours in the same period in 2012.
EBITDA amounted to $33.8 million, versus $35.7 million a year earlier. Net income attributable to the shareholders of the Corporation stood at $19.1 million, or $1.47 per share, compared with $20.4 million, or $1.56 per share, last year. Finally, cash flows related to operating activities before net change in non-cash working capital balances and deferred revenues totaled $28.1 million, versus $30.5 million, in 2012.
"Looking ahead, we expect the long-term demand for our core transportation services to remain strong. In the short term, the balance of the year will be affected by the renewal of the Afghanistan contract, the continuation of pipeline work in Western Canada and the termination of Australian Fire Contract," said Mr. Wall. "Our international operations have positioned HNZ to benefit from an upsurge in general economic activity. Furthermore, we anticipate our performance for Rio Tinto in Australia, and the work we will be commencing next month for Shell Global Solutions in the Philippines, will assist in procuring additional contracts in the resources sector. Internally, a focus of management in the quarters ahead will be to leverage our international network and combined with a strong balance sheet, continue to pursue our disciplined expansion strategy," concluded Mr. Wall.
The Corporation will hold a conference call to discuss these results on Wednesday August 14, 2013 at 10:30 AM (ET). Interested parties can join the call by dialing 514-807-9895 (Montreal) or 1-888-231-8191 (toll free). If you are unable to call at this time, you may access a tape recording of the conference call by dialing 416-849-0833 (Toronto), 514-807-9274 (Montreal), or 1-855-859-2056 (toll free) followed by access code: 18625816. This tape recording will be available until August 21, 2013.
ABOUT HNZ GROUP INC.
The Corporation is an international provider of helicopter transportation and related support services with operations in Canada, Australia, New Zealand, Afghanistan, Antarctica and Southeast Asia. The Corporation operates in excess of 130 helicopters in support of a range of multinational companies and government agencies, including onshore and offshore oil and gas, mineral exploration, military support, hydro and utilities, forest management, construction, air ambulance and search and rescue. In addition to charter services, the Corporation provides flight training and third-party repair and maintenance services. The Corporation is headquartered near Montreal, Canada and employs approximately 800 personnel from 35 locations around the world. The Corporation operates from fixed-base locations as well as from temporary locations, commonly referred to as "pool locations", and provides helicopters in a wide variety of climatic conditions and terrain across Canada, Australia, New Zealand Afghanistan, Antarctica and Southeast Asia.
Certain statements in this press release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Examples of such statements include, but are not limited to, statements regarding the HNZ Global acquisition, the integration of HNZ Global and the realization of expected synergies, the financial position, results of operations, objectives, dividend policy, participation in bidding processes, continuing business relationship with actual or potential key clients (in particular USTRANSCOM in Afghanistan, Rio Tinto and Shell), expected revenues from contracts with key clients, seasonal levels of activity, maintenance of contractual relationships, impact of any economic uncertainty, expected competition, use of available funds, maintenance of strategic relationships with aboriginal groups and regulations (in particular environmental and transportation regulations) and legislation (including tax legislation) applicable to the Corporation.
Although the forward-looking statements contained in this press release are based upon what management of the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. The assumptions on which the forward-looking statements are based include, but are not limited to, general economic trends, industry trends, current contractual and business relationships, capital markets and current competitive, governmental, regulatory and legal environment.
These statements are not based on historical facts but instead reflect current expectations of management regarding future events and operating performance and speak only as of the date of this press release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed in this press release or referred to under "Risk Factors". These forward-looking statements are made as of the date of this press release, and the Corporation assumes no obligation to update or revise them to reflect new events or circumstances, unless required by applicable laws.
DEFINITION OF NON-IFRS MEASURES: EBITDA
References to "EBITDA" are to net income before net financing charges, income taxes, depreciation and amortization, gain or loss on disposal of property, plant and equipment and change in fair value of the obligation to purchase the shares of non-controlling interests. Since EBITDA is a metric used by many investors to compare issuers on the basis of the ability to generate cash from operations, management believes that in addition to net income or loss, EBITDA is a useful supplementary measure.
EBITDA is not an earnings measure recognized under IFRS and does not have a standardized meaning prescribed by IFRS. Therefore, EBITDA may not be comparable with similar measures presented by other entities. Investors are cautioned that EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of the Corporation's performance, or to cash flows from operating, investing and financing activities as measures of liquidity and cash flows.
Note to readers: Complete consolidated financial statements and Management's Discussion & Analysis of Operating Results and Financial Position are available on the Corporation's website at www.hnz.com and on SEDAR at www.sedar.com.
SOURCE: HNZ Group Inc.
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HNZ Group Inc.
President and Chief Executive Officer