HALIFAX – Chorus Aviation Inc. has reported relatively flat adjusted profits for the second quarter, helped by a stronger Canadian dollar and lower airport and terminal fees.
Excluding one-time items, the Halifax-based airline, which operates fights for Air Canada (TSX:AC.B) under the Jazz banner, had an adjusted net income of $22.2 million for the three-month period ended June 30.
That amounted to 18 cents per share, slightly higher than the $21.4 million, or 17 cents per share in the same quarter a year earlier.
Net income was $36.5 million, or 30 cents per share, compared with $7.9 million, or six cents per share, year over year.
Chorus (TSX:CHR.B) said the net income had an unrealized foreign exchange gain of $14.3 million versus an unrealized foreign exchange loss of $13.5 million in the same period of 2013.
Operating revenue climbed nearly two per cent to $417.8 million from $410 million in the same quarter of 2013.
“Chorus continues to generate positive operating income and cash flows from operations and I’m pleased to report strong earnings and operational performance again this quarter,” president and CEO Joseph Randell said in a statement.
In a conference call with analysts following the release, Randell and chief financial officer Rick Flynn said the airline was continuing “productive” talks over its capacity purchase agreement with Air Canada. Their current contract does not expire until 2020.
Walter Spracklin, an analyst with RBC Capital Markets, said the negotiations are one example of the way management is “executing across their planned initiatives.”
“CHR (Chorus) did not provide any colour on potential contract revisions or when these changes could take place,” he wrote in a note. “However, we believe that any amendments prior to 2020 would remove certain inefficiencies in the existing CPA contract, which would be mutually beneficial and unlock shareholder value.”
Chorus operates Air Canada Express flights under a capacity purchase agreement with Air Canada as well as a charter service under the Jazz banner. It has a fleet of 122 aircraft. The airline was formed in 2001 when Air Canada combined four regional carriers into one.
On the Toronto Stock Exchange, Chorus shares closed up one cent at $4.59 on Thursday.