Monday, October 29, 2012

■ SOUTH AFRICA: 1Time Holdings announces $5million loss for interim period ended 30 June; plans rights issue.

South Africa's 1time Holdings Ltd, the parent company of LCC 1Time (T6) and its sister company, Jetworx, has posted a USD5.02million loss according to its unaudited results for the interim period ended 30 June 2012, with "higher fuel costs, airport taxes and an excess of capacity in the market" continuing to take their toll.

The loss is a 28% rise on last year's, which amounted to USD3.91million, though these results were prior to the company's entry into Business Rescue in August of this year.
This increase loss was incurred in the airline due to new route development, namely Lanseria and Mombasa both launched in the early part of the 2012 financial year, which resulted in losses of ZAR16.8million (USD1.94million) and ZAR8.0million (USD0.92million) respectively over the 6 month period. 

On a normalised basis the airline would have reflected a profit of ZAR21million (USD2.42million) in the airline compared to a loss of ZAR31,0 million (USD3.57million) the corresponding period in 2011. However, both Lanseria and Mombasa have subsequently been put on hold until the core business returns to profitability. Fuel, Airport Charges and Ground Handling constitute 80% of the airlines operating cost, which increased 30% year-on-year. This drove the overall operating cost base by 25%, which was only partially offset by an increase of 11% in revenue in the 1time airline.

A 1Time MD83 (1Time)
A 1Time MD83 (1Time)
As part of its bid to shake off its USD46million debt (of which the largest tranche -USD16.8million- is owed to the Airports Company South Africa (ACSA)), 1Time has also announced plans to raise between USD7-9million from its shareholders through a rights issue (an issue of rights to buy additional securities in a company made to the company's existing security holders. In a public company, like 1Time, it is a way to raise capital under a seasoned equity offering), according to a business rescue plan presented to creditors last week. 

Under the plan, the ACSA debt would be resolved over 10 years with payments starting after a 24-month moratorium, intended to allow 1Time to return to profitability, whilst other creditors of the airline, owed about USD34.5milion, will receive ZAR0.20 on the Rand over 36 months - set to also begin after a 24-month moratorium.

So tight have funds been at the company, that 1Time were forced to ask the Johannesburg Stock Exchange to waive the rule that all JSE-listed companies must publish their results in English and Afrikaans newspapers as the struggling carrier could "ill-afford the more than USD28'800 in advertising costs."