Board recommends record cash shareholder payments in 2015 totaling up to KD50 million
- 66.6% growth in Q4 Earnings, earning KD3 million in net profit, making it a record Q4
- 12.5% growth in the Group’s airline business in 2014, earning KD14 million net profit
Freedom Town, Kuwait – March 30, 2015: The board of directors of Jazeera Airways Group today recommended record dividends and payments to shareholders totaling up to KD50 million in the form of special dividends for 2014 and a share buyback program. All payments will be executed separately in the next several months with the last payment expected to take place in August 2015, pending regulator and shareholders approvals.
Jazeera Airways Group Chairman, Marwan Boodai, said: “Our recommendation today to distribute up to KD50 million in shareholder payments reflects our strong performance last year and the successful divestment of the leasing business. The board is confident in the continued future cash flow and the growth of our airline.”
Board-recommended shareholder payments in 2015:
- Special Cash Dividends for 2014:
- KD20 million, to be paid following shareholder approval by the upcoming Annual General Meeting of Shareholders that is planned for mid-May 2015.
- Shares buyback program payments:
- Up to KD 30 million, which include KD22 million for the purchase of 220 million shares out of the total 420 million outstanding issued shares at the nominal price of 100 fils (KD0.1), and up to KD8 million in 2015 earnings and other reserves that are required by law to be distributed prior to executing the planned share buyback program.
Jazeera Airways Group’s share buyback program will be the first voluntary share buyback program exercise in Kuwait based on the new share buyback procedures by Kuwait’s new Commercial Companies Law (97/2013) and its executive regulations. The board commits to executing the dividends and the payouts as soon as shareholder and regular approvals are secured.
Background
As of December 31, 2014, Jazeera Airways Group’s cash balance stood at KD66 million. The company expects the cash balance to rise to above KD80 million by end of 2015 – without taking into account the shareholder payments recommended today. The company’s paid up capital is KD42 million.
The high-level of cash is a result of retained earnings generated by the company’s strong performance in recent years. The company’s cash position will be further enhanced with the proceeds from the sale of 15 Airbus A320s for USD507 million (KD148.5 million) that was announced last January as part of a strategic move to exit the aircraft leasing business and focus on the Group’s star performer, the airline (Jazeera Airways). Historically, the airline generated 80% of the Group’s net profit.
Boodai said, “Our divestment from the leasing business came at the right time for us and our buyers. Our fleet’s new owners are getting modern assets that are already placed with airlines across the world and generating revenue from day one. We are now focused on our star performer, Jazeera Airways, which is now more nimble, asset-light, cash-rich and debt-free to pursue new opportunities to serve our customers”.
The fleet sale transaction is reflected in 2014’s financial accounts that will be available next month. As a result of the fleet sale transaction, Jazeera Airways Group will receive KWD148.5 million in cash. The proceeds will be used to settle all of the company’s outstanding debt, amounting to KD116.6 million as of end of 2014.
FY2014 Group Results
Jazeera Airways Group also announced the company’s financial results for the year 2014 today. The company had a record Q4 performance, earning pre-transaction net profit of KD3.8 million, an increase of 47% from the same quarter last year. The company’s full-year revenue was KD68.8 million, up 4.9% from last year, and its pre-transaction net profit was KD17.4 million, up 4.4% from 2013. However, as a result of the fleet sale, the company’s bottom line for 2014 was affected by a one-time non-recurring loss leading to a net loss of KD2.88 million for the year.
| Group | Vs 2013 | Airline Business Segment | Vs 2013 | |
| Operating Revenue | KD68.8 million | +4.9% | KD62.5 million | +4.9% |
| Operating Profit | KD19.9 million | -3.3% | KD13.3 million | +6.0% |
| Net Profit (Pre Fleet Sale) | KD17.4 million | +4.4% | KD14.0 million | +12.5% |
| Booked Net Profit/loss (Post Fleet Sale) | KD -2.88 million |