Cebu Air Inc., the operator of budget carrier Cebu Pacific, said on Wednesday that it is “confident that recovery to positive stockholders’ equity is imminent and forthcoming.”
In reply to an inquiry from the stock exchange, Cebu Air listed several of its existing initiatives to bring its stockholders’ equity from negative to positive, including its 2021 programs.
These include the stock rights offer and the issuance of convertible bonds to investors International Finance Corp. and Indigo Group.
According to Cebu Air, these two initiatives including the “strong increase in demand for travel” and the current macroeconomic conditions will propel the company to recovery.
The Gokongwei-led company said its domestic operations are now at 100 percent of the airline’s prepandemic capacity, and this is expected to “increase further into 2023.”
It also registered a “notable uptick in travel demand” for international flights.
“The corporation ended 2022 with 2,600 weekly flights, and by the 2nd quarter of 2023, expects to break over 3,000 weekly flights, going beyond prepandemic levels on a systemwide basis. Higher utilization of existing aircraft, together with improvement in both capacity and seat load factors driven by higher bookings, support the outlook for improvement in the corporation’s revenues and profitability margins,” Cebu Air said.
It added that the overall conditions of the economy will support its recovery.
“Macroeconomic conditions are likewise supporting the corporation’s recovery to profitability,” it said, citing the reduction of jet fuel prices in the global market as well as the “sideways” movement of the dollar-peso exchange.
The Philippine Stock Exchange on March 31 asked Cebu Air to detail its plan to bring its stockholders equity from negative to positive, citing provisions on listing and disclosure rules of the bourse.
In its annual report, Cebu Air reported that basic/diluted loss per share in 2022 was at P23.80, which was almost half the P40.36 loss per share recorded in 2021.
Cebu Air reported that in 2022 its net loss shrank to P14 billion in 2022 from P24.9 billion the previous year, and operating loss reduced to P11.4 billion, about half of previous year.
It recorded a 261-percent increase in revenues to P56.8 billion in 2022, as its passenger business ballooned 459 percent to P35.1 billion, on the back of higher travel demand, both domestically and internationally, coupled with the easing of various travel regulations.
For 2023, the carrier is “confident in its ability to overcome” its anticipated headwinds.