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1Time earnings take a dive

Johannesburg - Low-cost airline 1time Holdings [JSE:1TM] on Thursday announced headline earnings per share (Heps) of 22.07c for the year ended December 2010, from 39.35c previously.

It noted that earnings per share (EPS) were down at 0.55c, from 19.46c in 2009.

Gross revenue climbed marginally to R1.308bn from R1.25bn, while operating profit fell sharply to R21.71m from R93.38m previously.

The group said that the 1time airline performed well with R66.9m in headline earnings, although this was down from its prior total of R94.3m. Safair Technical, its aircraft maintenance business, performed poorly, with a R22.6m attributable headline loss.

The airline increased gross revenue by 10.3% from R1.040bn in 2009 to R1.148bn in 2010, despite difficult trading conditions.

"The airline maintained its status as the fastest-growing airline for seven years in a row, increasing passenger volumes by 6.7% from 1.8 million in 2009 to 1.921 million in a flat market.

"Capacity increased by only 5% to increase the average load factor to 82%," 1time said.

The company added that its African growth strategy had proven successful, with the Zanzibar, Livingstone and Maputo routes all performing well, along with the eight domestic destinations serviced by 1time.

Looking ahead, the group said: "For the airline, we expect a tough trading environment for 2011. High oil prices will put pressure on yields, which will in turn negatively impact overall market volumes. We are confident, however, that our low-cost advantage will enable us to continue offering the lowest prices and best service."

It said that further passenger growth was expected on current routes and new services into Lanseria and Africa.

Cost savings achieved in Safair Technical would be the main driver to achieve a significant improvement in 2011.

"While the high oil prices and strong rand environment are expected to place margins under pressure during 2011, we are pleased that the black economic empowerment transaction and Safair Technical restructuring, combined with our low-cost advantage, places the group in a strong position for 2010," 1time said.

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