Med-View Airline turns profitable, reports N691.03m profit in Q1

Med-View Airline Plc, one of Nigeria’s largest carriers, surmounted a volatile and tough operating environment to return to the path of profitability.

For the first three months through March 2017, the company posted a profit after tax of N691.03 million from a loss of N200.05 million it recorded in the corresponding period of last year.

Sales increased by 77.38 per cent to N7.61 billion in the period under review, thanks to contributions from international operations.

Med View’s input costs increased by 56.03 percent to N5.93 billion, as the company grappled with a shortage of aviation fuel brought on by a severe dollar scarcity.

Last year, Domestic carriers including Arik, Air Peace, Dana Air and Medview have had to cancel or delay flights for months as oil marketers reduced jet fuel imports because of dollar shortages.

International carriers such as United Airlines and Iberia exited the country because they were unable to repatriate their money out of the country due to economic downturn.

Nigeria’s gross domestic product contracted by 0.52 percent in 2016 as inflation accelerated to 16.25 percent in June 2017, according a recent report from the National Bureau of Statistics (NBS).

The number of passengers that passed through the country’s airport dropped by 35 percent in the first quarter of 2017 to stand at 2.51 million compared to the corresponding quarter of 2016.

The drop was due to the closure of the Abuja airport for repairs. A total of 15.2 million passengers were recorded as at the end of 2016.

Experts are of the view that there is an urgent need for domestic airline operators to consider listing their shares on public exchanges as a way of raising funds and bolstering their liquidity.

“I want to see two major flag carriers with two hubs, one with operational base in Abuja and the other in Lagos,” said John Ojikutu, a member of aviation industry think tank, Aviation Round Table (ART) and Chief Executive of the Centurion Securities Group

“I want to see these two airlines in the Nigerian stock market giving Nigerians the opportunity to be part of the ownership of the airlines that would be called national/flag carriers,” said Ojikutu.

Further analysis of Med-View shows the company’s current ratio, a measure of liquidity, stood at 0.36 times, lower than industry average of 2.10 times.

Med View’s shareholders fund otherwise known as total equity increased by 10.74 percent to N7.11 billion while total assets stood at N17.30 billion as at March 2017.

Company’s debt to equity ratio of 12.91 percent means the balance sheet is relatively free of debts. This also means the company is in an advantageous position to issue bonds to finance its expansion plans.

The introduction of a foreign exchange window by the central bank combined with a rebound in oil production has eased liquidity in the past few months.

This latest development could assuage the pains of airline operators groaning under a severe dollar shortage.

Med-View’s share price closed at N1.60 as of 2:00 pm in Lagos, the valuing the company at N15.60 billion.