SpiceJet Q3 net down 14%; shares drag

SpiceJet Q3 net down 14%; shares drag

New Delhi: Budget carrier SpiceJet on Thursday posted a 14% fall in profit for October-December, as higher fuel costs and taxes offset a rise in net sales.

SpiceJet shares, which were trading as high as 5% in early trade, shed all gains to close down more than 7% at Rs68.70 in a Mumbai market that fell 1.5%.

Profit for the quarter ended 31 December stood at Rs944.5 million, compared with a profit of Rs109 crore a year back. Net sales, however, jumped 26% to Rs820 crore.

“The results are actually very good this quarter. Last year, there were some fuel price exemptions, which was reversed this year," said Sharan Lillaney, an analyst with Angel Broking.

He said the market was overreacting to the results.

Lillaney also pointed out that SpiceJet, which did not pay taxes last year due to accumulated losses, has paid 235 million in taxes for October-December.

Fuel costs for SpiceJet rose about 48% to Rs310 crore for the latest quarter.

Oil prices spiked in the past year, with the US benchmark averaging $85 per barrel in the fourth quarter, up 12% from a year earlier.

Oil is expected to hit $100 a barrel this quarter, but a new record high above $147 is far less likely any time soon, a Reuters poll of investment managers and bank analysts showed on 12 January.

Passenger air traffic in India grew 19% through November last year. Many Indian carriers are growing their fleets as demand booms in India, where the economy is growing at nearly 9%.

SpiceJet in November agreed to buy 30 Nextgen turboprop aircraft from Bombardier for as much as $915 million.