Cargojet Inc. has announced the financial results for the fourth quarter and year ended December 31, 2021.
Total Revenues for the quarter were $235.9 million compared to the fourth quarter 2020 Revenues of $187.1 million. Gross Margin for the quarter was $76.7 million compared to fourth quarter 2020 Gross Margin of $69.3 million. Adjusted EBITDA(1) and Adjusted EBITDAR(1) for the quarter were $90.5 million compared to the fourth quarter 2020 Adjusted EBITDA(1) and Adjusted EBITDAR(1) of $87 million. Net income for the quarter was $102.0 million (net income of $33.4 million excluding warrant valuation gain) compared to a net loss of $20.5 million in 2020 (net income of $27.4 million excluding warrant valuation loss).
Total Revenues for the year were $757.8 million compared to 2020 Revenues of $668.5 million. Gross Margin for the year was $230.9 million compared to the 2020 Gross Margin of $250.5 million. Adjusted EBITDA(1) and Adjusted EBITDAR(1) for the year were $293.1 million compared to the 2020 Adjusted EBITDA(1) and Adjusted EBITDAR(1) of $281.7 million. Net income for the year was $167.4 million (net income of $88.4 million excluding warrant valuation gain) compared to a net loss of $87.8 million in 2020 (net income of $90.1 million excluding warrant valuation loss).
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Total revenue growth of 26.1% for the quarter compared to the prior year reflected the results of our previously announced diversification strategy that is helping deliver a balanced portfolio growth where each line of business is a strong contributor.
The domestic network posted 18.2%, ACMI posted 26.6% and the Charter business posted 54.6% growth compared to the same period last year. Domestic Network Revenue for this quarter accounted for less than 45% of total revenues compared to over 47% for the same period in 2020.
Adjusted Free Cash Flow(1) was $38.0 million for the three-month period ended December 31, 2021, compared to $52.1 million for the same period in 2020.
“As we begin to prepare for the post-pandemic world, Cargojet now has a substantially larger base of business to build upon compared to its pre-pandemic size and scale. Building on the strong foundation of our domestic overnight network, we are aggressively diversifying to take advantage of the emerging growth opportunities,” said Dr. Ajay Virmani, President & CEO.
A prolonged pandemic has triggered structural changes in the aviation industry over the past two years. With a dramatic reduction in cross-border passenger air travel, significant belly cargo capacity has been taken out of the global supply chain. At the same time, the pandemic has accelerated demand for e-commerce at an unprecedented rate, creating even more demand for air cargo services.
While dedicated air cargo operators have tried to step up their services to meet demand in the short term, there remains a significant gap in the worldwide airlift capacity compared to the demand that is expected to persist in the medium term.
As major passenger airlines shed their larger wide-body fleets of B747s and A380s in favour of smaller, more fuel-efficient aircraft, Cargojet expects the reduction in resulting belly cargo capacity to become a longer-term structural shift. Cargojet’s strategy to grow its international footprint continues to take advantage of this structural shift.
“Growth and success will require top talent and we are building a dedicated international team. At the same time, we will continue to have our current top talent stay focused on delivering exceptional service to our growing domestic network customers,” concluded Dr. Virmani.
All references to “$” in this press release are to Canadian dollars.
