Ten facts on Kingfisher Airlines financials

Kingfisher shares rose 2 per cent despite the company reporting widening of the net loss for the quarter ended December 2011. Here are ten things you need to know about the present financial situation at the company:

• Debt-laden Kingfisher Airlines said on Thursday that its net losses almost doubled in the last quarter of 2011, plunging it further into a financial crisis that threatens its survival. The company posted a net loss of Rs 444 crore ($88 million) in the three months to December, compared with Rs 254 crore in the same period a year earlier.

• Sales fell about 25 per cent to Rs 1,342 crore from Rs 1,790 crore, while interest charges on its huge debt pile (of over Rs 6,000 crore) rose to Rs 350 crore from Rs 340 crore a year earlier. The company has cut capacity by 5 per cent in the December 2011 quarter.

• The company’s share price rose 2 per cent on Thursday and has gained 25 per cent over the past 3 months on hope of a revival plan and permission for foreign airlines to buy into the company.

• Kingfisher has never posted a net profit since launch in 2005. However, since most airlines post net losses due to surging fuel costs, investors track a metric called EBITDAR which means earnings before interest, taxation, depreciation, amortization and rental costs. Most airlines lease aircrafts and do not own them. Kingfisher Airlines reported an EBITDAR profit of Rs 125 crore against Rs 284 crore in December 2010.

• Kingfisher chairman Vijay Mallya is expected to discuss with lenders a new restructuring package after SBI Caps, an investment bank and subsidiary of State Bank of India, gives its report on the viability of the airline.

• State Bank of India and other public sector banks like Punjab National bank have declared the Kingfisher Airlines loan as a non-performing asset. This means, it is not generating any interest income for banks. SBI has an exposure of close to Rs 1,500 crore while PNB had Rs 435 crore exposure to the debt laden carrier.

• Kingfisher Airlines has pledged various assets to banks in a bid to raise cash. The company had to hypothecate the ‘Kingfisher’ brand to banks with an estimated value of Rs 4,100 crore. Hypothecation is a collateral given to lenders to secure debt.

• Vijay Mallya, chairman, Kingfisher Airlines, has given a personal guarantee of Rs 248.97 crore, while United Breweries Holdings, which he heads, has provided a corporate guarantee of Rs 1,601.43 crore.

• In addition, Kingfisher has provided a pooled collateral security of Rs 5,238.59 crore, which includes Kingfisher House in Mumbai, Kingfisher Villa (Goa), and hypothecation of helicopters.