Category Archives: CEB

Cebu Pacific Buying 16 ATR Planes for $673.0 million

Cebu Air Inc. (CEB) is spending $673 million to acquire 16 more brand new aircraft from Toulouse-based turboprop aircraft maker ATR to meet the growing demand for inter-island services in the Philippines.

The acquisition of 16 ATR72-600 is in line with the low cost carrier’s vision of providing affordable air travel. Cebu Pacific has been operating ATR aircraft since 2008 enabling the budget airline to bring safe, reliable, and affordable air transport to smaller cities and islands throughout the Philippines.

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The transaction would double the airline’s turboprop fleet size. It currently operates a fleet of 8 ATR 72-500 aircraft that would be retired as the new aircraft enter service.

Cebu Pacific is undertaking a $4 billion fleet renewal program. It is scheduled to take delivery of 7 more Airbus A320 and 30 A321neo between this year and 2021.

It has a fleet of 55 aircraft composed of 10 A319, 31 A320, six Airbus A330, and eight ATR-72 500 aircraft.

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Posted by on June 18, 2015 in CEB, Corporate News, Stock Market


CEB’s net income gets a lift from increase in passengers


Gokongwei-owned Cebu Air Inc. (CEB) said it earned PHP 853.5 million in 2014, up 67% from the PHP 511.95 million the previous year. Fueling the growth was a 27% increase in revenue to PHP 52 billion last year from PHP 41 billion in 2013.

Passenger revenue comprised 77% of total revenue and increased by 27% to PHP 40.19 billion from PHP 31.66 billion over the same period.

Cargo revenue also grew by 20.6% and comprised 6% of the top line.

It also saw a 17.5% growth in passenger volume to 16.9 million last year from 14.4 million in 2013.

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Operating expenses climbed 23.9% to PHP 47.843 billion last year from the PHP 38.6 billion in 2013.

Lower jet fuel prices however partly made up for the increase in fuel expenses brought about by the higher number of flights mounted.

Jet fuel cost $112.48 a barrel last year, down from the $122.97 average in 2013.

Jet fuel comprised half of operating expenses and rose 19% year-on-year.

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Posted by on March 27, 2015 in CEB, Corporate News, Stock Market


Stock in Focus: CEB


AB Capital Securities BUY 98.70 6 Jan 2015


3rd Quarter revenues jump 32.4%

Cebu Air, Inc. (CEB) posted 3rd quarter 2014 revenues of PHP 11.7 billion (up 32.4% year-on-year) with the airline flying 4 million passengers (up 16.8% year-on-year) for the period. Despite the jump in revenues, net loss for the quarter widened to PHP 1.1 billion compared to PHP 750 million in the 3rd quarter.

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The loss was attributed to seasonality (third quarter is usually the weakest for local airlines) and foreign exchange and fuel hedging losses (PHP 1.09 billion loss). On a year-to-date basis, CEB’s 9-month 2014 revenues and net income improved to PHP 38.4 billion (up 25.7%) and PHP 2.0 billion (up 213.1%), respectively.


Bottom-line to improve on lower crude prices

Crude oil is currently hovering around $55-60/barrel, falling by $20 from our last report after low demand expectations and the reluctance of OPEC to cut production. The declining prices is seen as bullish for CEB, with fuel costs accounting for 40-50% of its total operating expenses.

In our model, we expect crude to average $70/barrel next year as it bounce back from its 5-year low. Historically, oil prices frequently bounce back after 6-7 months of continuous drop as market generally over reacts on supply and demand shocks/contractions.




Our Partner Broker’s Recommendation

We arrived at a Target Price for CEB of PHP 98.70 per share using a blended average of Discounted Cash Flows (DCF), EV/EBITDA and EV/EBITDAR multiples method implying a 14.96% upside from its last traded price. The upgrade in target price is mainly due to changes in crude price expectations.

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At this target price of PHP 98.70, CEB will be trading at 2015 Price-Earnings (P/E) Ratio of 8.8x and EV/EBITDA of 5.7x. We continue to remain bullish on CEB, being the leading low-cost carrier in the country, and benefiting from the country’s growing middle class market.

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Posted by on January 6, 2015 in CEB, Corporate News, Stock Market


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Cebu-Pac post double digit growth in passenger volumes

Cebu Air Inc. (CEB) recorded a double-digit growth in passenger volume in the first 10 months of the year.

The number of passengers ferried by the company jumped 15.7% to 13.9 million from January to October this year compared to 12.04 million in the same period last year.

With the delivery of four brand new aircraft, the capacity of Cebu Pacific grew 13.1% to 16.6 million in the first 10 months of the year from 14.6 million in the same period last year.

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This translated to a higher load factor of 84.2% in the first 10 months of the year from 82.3% in the same period last year.

For the month of October alone, volume of passengers carried by Cebu Pacific jumped 24.2% to 1.41 million from 1.1 million in the same month last year.

Moreover, capacity also rose 12.8% to 1.7 million from 1.5 million translating to a higher load factor of 83.9% from 76.2%. Number of flights went up by 7.4% to 10,318 from 9,605.

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Posted by on November 25, 2014 in CEB, Corporate News, Stock Market


Cebu Pacific dominates domestic routes but PAL stays ahead internationally

Cebu Air, Inc. (CEB) dominated the domestic air travel market while Philippine Airlines (PAL) lorded over the international front in the first 6 months of the year.

Data from the Civil Aeronautics Board (CAB) showed that the country’s air passenger traffic in the January to June period went up by 9.5% to 21.73 million from last year’s 9.31 million. Domestic passenger traffic fueled the rise, growing by 15% to 12.42 million this year from 10.77 million last year.

Cebu Pacific remains the country’s leading domestic carrier with a 46% share of the market. It flew 5.82 million passengers this year, up by 6.98% from last year’s 5.44 million.

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PAL’s domestic traffic increased 30.26% to 1.98 million from 1.52 million in 2013. The flag carrier’s affiliate, PAL Express, flew 2.7 million passengers, up by 28.57% from 2.1 million last year.

PAL flew the most number of international passengers at 2.49 million in the first half of the year, up by 24.5% from 2 million a year ago. Its affiliate, PAL Express, carried 77,309 passengers.

Cebu Pacific carried 1.62 million international passengers, 9.45% more than the 1.48 million last year.


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Posted by on September 24, 2014 in CEB, Corporate News, PAL, Stock Market


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