Cargojet (TSE: CJT), a Canadian airline specializing in scheduled cargo flight, posted higher revenues and profit in the fourth quarter of 2021.
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The pandemic has accelerated the demand for e-commerce at an unprecedented rate, creating even more demand for air cargo services.
Revenues & Earnings
Total revenues for Q4 2021 came in at C$235.9 million, an increase of 26.1% from C$187.1 million the prior-year quarter. Revenue growth was driven by the company’s diversification strategy, which helps ensure balanced portfolio growth where each business line makes a significant contribution.
Domestic network posted 18.2%, ACMI posted 26.6% and Charter activity posted growth of 54.6% in the quarter, compared to Q4 2020.
Domestic network revenues for the quarter represented less than 45% of total revenues, compared to more than 47% for the same quarter in 2020.
Gross margin was C$76.7 million in the fourth quarter compared to C$69.3 million a year ago. Adjusted EBITDA was C$90.5 million for the quarter ended December 31, compared to adjusted EBITDA of C$87 million in the prior-year quarter.
Net income for the quarter was $102 million compared to a net loss of $20.5 million in 2020.
Adjusted free cash flow was C$38 million in the quarter, compared to C$52.1 million in the same period in 2020.
CEO Commentary
Cargojet president and CEO Dr. Ajay Virmani said, “As we begin to prepare for the post-pandemic world, Cargojet now has a substantially larger base of business to build upon compared to its pre-pandemic size and scale. Building on the strong foundation of our domestic overnight network, we are aggressively diversifying to take advantage of the emerging growth opportunities.”
Wall Street’s Take
On March 1, Fadi Chamoun from BMO Capital kept a Buy rating on CJT, with a price target of C$220. This implies 27.7% upside potential.
The rest of the Street is bullish on CJT with a Strong Buy consensus rating based on four Buys and one Hold. The average Cargojet price target of C$235.60 implies 36.6% upside potential to current levels.
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