Cargojet’s Q2 revenue up 10.1%

Cargojet reported CA$230.8 million ($168.3 million) in second-quarter revenue, an increase of 10.1% from Q2 2023. [caption id="attachment_68387" align="alignright" width="300"] (Courtesy/Cargojet)[/caption] Revenue from its domestic net work; aircraft, crew, maintenance and insurance (ACMI); and all-in charter for the quarter rose 11.5% year over year to $139.5 million, according to the earnings report released after market close on Aug. 13. THE BIG PICTURE: Like other cargo carriers , Cargoj et is seeing improved cargo figures following a rocky 18 months ruled by high capacity and low demand. Cargojet’s Q1 revenue was down 0.3% YoY and i ts full-year 2023 revenue w as down 10.5% YoY. BY THE NUMBERS: Mississauga, Ontario-based Cargojet reported a net loss of $18.2 million, down 180.4% YoY compared with Q2 2023’s net earnings of $22.7 million. Cargojet also reported in Q2: Adjusted EBITDA of $57.7 million, up 6.5% YoY; Revenue from air cargo services of $163.6 million, up 6.2% YoY; An adjusted earnings-per-share loss of 4 cents, down 105.6% YoY; and Flying more than 11,300 tonnes of cargo weekly. WHAT THEY’RE SAYING: Cargojet has profited from China’s e-commerce boom , according to the earnings report . The carrier entered a three-year agreement with China-based Great Vision HK Express to provide scheduled charter services between Hangzhou (HGH) and Vancouver (YVR) with B767-300F aircraft, according to a June release. The agreement is expected to garner $116.7 million in revenue. “We recently capitalized on the opportunity to service the fast-growing China-based e-commerce brands,” co-Chief Executive Jamie Porteous said on today’s earnings call. “As a result, each one of our lines of business posted strong growth rates during the quarter. Domestic network revenues grew by 10.8%, ACMI posted a 7.3% gain and all-in charter posted a record 23.4% growth versus the second quarter of 2023.” STATE OF PLAY: “While geopolitical challenges and broader economic headwinds continue to affect the overall transportation industry, we remain focused on continuing to grow our domestic, ACMI and all-in charter revenue,” Porteous said. FLASHBACK: Cargojet ranked 46th on Air Cargo Next ’s Freight 50 list, flying 1.1 billion cargo tonne kilometers in 2022. NOTEWORTHY: The carrier operates 41 aircraft: Four leased B767-300s; One leased B767-200; Seventeen owned B767-300s; Two owned B767-200s; and Seventeen owned B757-200s. Cargojet has two B767 aircraft under conversion, with expected delivery dates in 2025. One will replace a B767-200 aircraft under a lease that will expire Feb. 28, 2025, and the other will be used for “potential e-commerce charter opportunities,” according to the earnings report. Cargojet is considering adding one aircraft in the next year or two. “We have accelerated the conversion of two 767-300 aircraft to prepare for 2025 and beyond,” Porteous said. “We feel very confident about this decision particularly when considered in the context of reductions in other Canadian operators’ freighter fleets and available air cargo capacity, particularly to serve long-range charter opportunities.” MARKET REACTION: Shares of Cargojet ( TSX: CJT , OTCMKTS: CGJTF ) were up 2.52% from market open to $90.41 as of market close today. Cargojet has a market capitalization of $1.5 billion. Editor’s note: All amounts have been converted to U.S. dollars.

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