Wednesday, July 29, 2020

SpiceJet loses Rs 807 crore in Jan-March quarter

New Delhi: The double whammy of the pandemic and continued grounding of its Boeing 737 Max has led SpiceJet to report its highest ever quarterly loss of Rs 807 crore for the January-March, 2020, period, as opposed to a profit of Rs 56 crore in same period last year. Audit firm S R Batloboi & Associates LLP’s ’s note with the result has cast doubt on the going concern status of the airline. The airline reported a loss of Rs 934.8 crore for FY 2019-20, up from a loss of Rs 316 crore in the previous fiscal. SpiceJet scrip closed 0.8% higher at Rs 48.35 Wednesday on BSE, when the broader closed 1% lower.

The budget airline is yet to report the result of Q1 (April-June) for the current fiscal.

The auditor has also questioned the airline recognising some items as incomes and receivables like related foreign exchange restatement. “Had the company not recognised such other income,… the reported loss for the quarter and year ended March 31, 2020, would have been Rs 978.3 crore and Rs 1649.3 crore respectively, and accumulated losses as at March 31, 2020, would have been higher by Rs 714.5 crore,” the auditor points out.

SpiceJet CMD Ajay Singh said: “Two key factors that adversely impacted our performance and bottom line was the COVID-19 pandemic that started affecting demand adversely from mid-February and grounding of the 737 MAX, which has been out of service for over a year now. Despite the year long grounding of the MAX aircraft, SpiceJet ran a profitable operation till COVID hit demand from mid-February. Indian and the global aviation industry are going through the toughest-ever phase in aviation history. We at SpiceJet have constantly adapted to the changing economic environment and I am happy that our cargo operations have performed very well. I am confident that things will only improve in the times to come. We remain cautious but optimistic about the future.”

The auditor’s note says: “…the company (SpiceJet) has accumulated losses and its net worth has been fully eroded, the company has incurred a net loss during the current and previous year and, the company’s current liabilities exceeded its current assets as at the balance sheet date. These conditions… indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern.”
29/07/20 Saurabh Sinha/Times of India

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