Photo: Mark Blinch, The canadian Press
Air Canada has updated its financial targets in the framework of the investor day, which took place in Toronto on Thursday.
Air Canada has the targets ambitious financial for the period 2019-2021. Referring to sustainable profitability, the largest airline in Canada aims to become a ” borrower quality “.
Air Canada has updated its financial targets in the framework of the investor day, which took place in Toronto on Thursday. According to the summary released to the media, its operating margin is expected to range between 19 and 22 % in fiscal 2019 to 2021. The return on invested capital (ROI) invested is expected to be fixed between 16 and 20 %. In 2018, a year dominated by the volatility of fuel prices and the weakness of the dollar, the carrier posted an operating margin of 16 % and a ROI of 12.6 %.
In terms of its financial health, Air Canada expects free cash flow totaling between 4 and 4.5 billion during the period, of which between 400 and 600 million this year. These streams, which are influenced by the operating results and investment decisions, however, have reached 791 million in 2018, down from $ 267 million, compared to 2017, far from the range of the prediction set then 500-600 million. As the ratio of net debt to operating income, the leverage ratio should not exceed 1.2 by the end of 2019. It was 2.1 % last year.
In the press release accompanying the announcement, the president and chief executive officer, Calin Rovinescu, has pointed out that ” we persevere in the establishment of ambitious targets for Air Canada in order to promote continuous improvement and to continue to increase shareholder value “. He recalled that in Exchange, the action of Air Canada had increased more than 1300 % in the last five years, ” 4000% since 1 April 2009, when we began to implement our strategy of transforming Air Canada for sustained profitability in the long term “.
The other objective advanced a few times, ” we are now in a favourable position to become an issuer of higher quality “, reiterated Mr. Rovinescu. As at 31 December, adjusted net debt ” of Air Canada reached almost $ 5.9 billion. The carrier was its weighted average cost of capital 7.2 % last year. In its annual information form 2017, published in march 2018, it noted that the rating agencies Moody’s, s&P and Fitch accolaient respectively note Ba stable BB– positive BB– stable to his credit. These notes are associated with obligations considered speculative or even speculative considerable, he explained.
These new targets reflect the acquisition of Aeroplan, formalized on January 10, and the launch of its new loyalty program expected in 2020. On this topic, Air Canada announced on Thursday the renewal of its partnership with American Express, which joined the program. The ten-year agreement, focuses on the creation of new payment cards co-branded participation in the rewards program Points-privileges from American Express and the expansion of trade cooperation between the two companies, can you read.
Agreements have already been signed with the banks, TD and CIBC, as well as with Visa.