Atlas Air Worldwide Holdings has announced strong third-quarter (Q3) earnings growth and raised its outlook for full-year 2018 – driven by ongoing market strength, customer demand and business development.
Volumes in Q3 increased 14 per cent to a record 73,672 block hours, with revenue growing 23 per cent to $656.6 million.
Reported income from continuing operations, net of taxes, totaled $71.1 million, during the period compared with a reported loss of $24.2 million, in Q3 of 2017. Reported results in Q3 of 2018 included an unrealised gain on outstanding warrants of $46.1 million compared with an unrealised loss on outstanding warrants of $44.8 million in the year-ago period.
On an adjusted basis, income from continuing operations, net of taxes, in Q3 of 2018 increased $14.1 million to $43.8 million, from $29.7 million, in the year-ago quarter. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) increased $25.3 million over the year-ago period to $124.8 million.
Atlas Air president and chief executive officer, William J. Flynn said: “We continue to leverage the scale and scope of our enterprise and our leadership in global aviation outsourcing.
“We are in a good place to deliver quality results today and in the future. We have the aircraft and provide the services that customers want. We are focused on the right markets. And we are executing on strategic initiatives to grow and diversify our fleet, expand our customer base and enhance our business mix.
“Secular trends are driving opportunities and growth in airfreight. And our focus is on express, e-commerce and fast-growing regions where efficient, time-definite, freighter networks are essential to meet the growing demands of businesses and consumers.
“Looking to the full year, we continue to expect our revenue to exceed $2.6 billion. We project adjusted EBITDA to increase to more than $525 million. And we anticipate our full-year adjusted net income to grow near or above 50% compared with 2017.”
Flynn continued: “Our full-year outlook reflects our expectations for another great fourth quarter. We see solid peak-season yields and volumes, including the additional seasonal flying we do for express and e-commerce operators. And we anticipate record fourth-quarter block hours, revenue, adjusted EBITDA and adjusted net income.
“The fourth quarter will also benefit from our second 747-400 freighter for Asiana Cargo, which began flying in September, and our first 747-400 freighter for SF Express, China’s leading express operator, which began service in October. In addition, we expect to add two more 767-300 converted freighters for Amazon before Thanksgiving, which will bring us to 20 aircraft in line with the schedule we announced in May 2016.”
He concluded: “While tariffs and trade are important topics, neither we nor our customers, with whom we are in close contact, have seen a material impact on airfreight demand. Airfreight tonnage continues to grow from record levels, and airfreight demand is growing in line with its longer-term rate of about 4% per year, with express and e-commerce growing much more than that.”
In the first nine months of the year reported income from continuing operations, net of taxes, for the nine months ended 30 September, 2018, totaled $59.6 million, which included an unrealised loss on financial instruments of $11.7 million related to outstanding warrants and a special charge of $9.4 million related to engines held for sale.
Results for the first nine months compared with income from continuing operations of $14.9 million, which included an unrealised loss on financial instruments of $36.2 million, for the nine months ended 30 September, 2017.
On an adjusted basis, income from continuing operations, net of taxes, in the first nine months of 2018 totaled $117.3 million, compared with $67.1 million in the first nine months of 2017. Adjusted EBITDA in the first nine months of 2018 increased $78.2 million to $344.1 million.
Atlas forecasts full-year 2018 revenue to exceed $2.6 billion; adjusted EBITDA to increase to more than $525 million; and adjusted net income to increase near or above 50 per cent compared with 2017 adjusted net income of $133.7 million.
It sees volumes for the year rising approximately 17 per cent to around 297,000 block hours, with about 75 per cent of the hours in ACMI and the balance in Charter.