Comair warns of 100% profit drop
The group is in business rescue after being grounded by Covid-19 and needs a substantial cash injection
Comair, which operates Kulula and British Airways (BA) in SA, warned on Tuesday that profits for the year to end-June will fall by at least 100% as it battles for survival.
The airline operator said in a statement on Tuesday that its business rescue practitioners, Shaun Collyer and Richard Ferguson, say Comair is unlikely to resume business before November as the company is in need of a substantial cash injection.
Comair said the practitioners are progressing in discussions with six potential funders to recapitalise the airline to resume domestic flights by November 1.
The airline operator has been badly affected by the national lockdown as air travel has been suspended since late March. The government has permitted limited domestic flights from June 1, with the easing of lockdown restrictions to level 3.
Comair went into business rescue in May and was suspended from the JSE after the Covid-19 pandemic grounded aircraft, but the practitioners have said there is a reasonable chance the business can be saved.
The group said headline earnings per share (HEPS) will decline by at least 100% from the 197.2c it reported in the year-earlier period.
Headline earnings are a widely used profit measure in SA, which strips out exceptional items to give a better indication of the underlying performance of a business.
The group’s share remains suspended on the JSE, but has fallen by two thirds in 2020.
Update: June 2 2020
This article has been updated with comment by the business rescue practitioners.