ATSG sees Q1 revenues improve on Pemco deal and Amazon ramp-up

ATSG saw revenues, earnings from continuing operations before taxes and net earnings improve during the first quarter of the year thanks to its acquisition of Pemco and the roll-out of its Amazon business.
The aircraft lessor reported revenues for the period up by 34.1% year on year to $237.9m, earnings from continuing operations before tax were up 32.3% to $16m and net earnings improved by 21.5% to $10m.
The revenue improvement came as Pemco’s results were included in financial figures.
The improvement in earnings came as last year’s results for the period include dollar and share related effects of warrants issued to Amazon Fulfilment Services in connection with operating and lease agreements.
ATSG chief executive Joe Hete said: “43 of our Boeing 767s were dry leased to external customers at the end of the first quarter, compared with 29 a year earlier.
“Our leasing business revenues from external customers increased 7 percent for the quarter, and we expect accelerating growth in that segment as the year progresses.
“That trend, plus improved profitability in our airline operations and good returns from our aircraft maintenance and logistics businesses, position us to deliver continued strong earnings and cash flow in the months ahead."
Looking at the firm’s individual business units, its cargo aircraft management (CAM) business registered a decline in revenues and pre-tax earnings as a result of a lease incentive with Amazon and lower revenues on maintenance, spare engine leasing, parts sales and the transitioning of aircraft between customers.
Pre-tax earnings were down on the lease incentive, higher depreciation and interest, and higher pre-deployment and transitioning expenses.
Its ACMI revenues increased 6.3% to $108m while its pre-tax loss narrowed to $3.7m from $10.4m last year.
Revenues improved on CMI operations for Amazon, while training for the ramp up of the deal continued to take a toll of profits. These costs are expected to decline in the second quarter.
Its other activities saw revenues improve by 85% to $89m on the back of its takeover of Pemco late last year. Profits were up on heavy maintenance and logistics services.
Yesterday, Atlas announced a flying start to the year when it presented Q1 numbers.