Rising EBITD at Cargojet despite an investment-related fall in earnings

Canadian all-cargo carrier Cargojet announced third-quarter adjusted earnings before interest, tax and depreciation (EBITD) of US$18.7 million, an increase of $10.2 million, or 120 percent over same period in the previous year. Total revenues rose 7.2 percent, year-over-year, to $59.9 million.

“We are very pleased with the strong financial results achieved in the third quarter,” said Ajay Virmani, Cargojet’s president and CEO.  “We continue to focus on optimizing our overnight network, growing our charter business during the day and on weekends, and to improving our balance sheet.”

That said, a strong showing was offset by expansion costs related to the deals, including an express mail contract with Canada Post, which the carrier signed with Purolator Express back in late 2014, that frontloaded significant aircraft and personnel costs. Cargojet also cited higher finance costs related to aircraft acquisitions, “impairment charges” related to the five Bombardier Challenger aircraft it purchased in 2014, and losses related to foreign exchange costs and settlement of debt. The carrier’s EBIT slipped to a loss of $4.9 million, from just over $2 million lost in Q3 last year.

Cargojet has grown its network across North America exponentially in recent years, carrying approximately 650 tonnes of cargo each business night. The carrier has more than doubled its fleet size in recent years, to 22 aircraft, consisting of 767-300ER, 767-200ER, 757-200ER and even a few remaining 727-200AF freighter aircraft.

Most recently, the cargo airline grew its freighter service provided to Air Canada Cargo, expanding the carrier’s freighter service to Frankfurt, effective Nov. 19 of this year.