Chorus Aviation's new Revnue Diversification Strategy

 On  November 9 Chorus  came out with their latest quarter's results.They have been restructuring fro several quarters now and find themselves in a place where they can  diversify even further.Chorus tells it's readers that total revenues were down from Q3 2015 while adjusted EBITDA was ahead by only 2%.But Chorus has made quite a few changes since then.This includes increasing their leasing revenue under the CPA by 51% to $72 million.They have also streamlined their Voyageur business and established a Voyageur Avparts business.Lastly they have established a relationship with Air Nostrum(Spanish) and leased 4 aircraft to them.
   The third Quarter
   Chorus showed investors adjusted EBITDA of $70 million and states that it is only 2% better than Q3 2015.But it was about 40% better than Q1 and Q2 of 2016.In fact both Qtrade and Yahoo Finance estimate 2016 adjusted EBITDA of only $66-$70 million.It seems that the financial websites have underestimated the 2016 Chorus performance.For 9 months Chorus shows that although revenues were down adjusted EBITDA was recorded at $179 million.This blog estimates that total 2016 adjusted EBITDA will be at about $250 million and earnings per share (e.p.s.) of about $2.05.This is well above the present dividend of $.48 but Chorus does have some extraordinary items to consider also.For example, net income was $99 million for 9 months and was helped by a smaller foreign exchange loss than in 2015.But free cash flow is big enough for Chorus management to start looking at an increase in the dividend soon.               

      The Fourth Quarter
    Should Chorus show increases in aircraft leasing revenues and Voyageur revenues in Q4 they will be in a position to raise the dividend back to the old level of $.60 per share.Maybe not in one step but perhaps in two steps.Perhaps investors will get more information then on their progress on Air Canada Express.But there should be no doubt that many investors will be impressed with their diversification strategy.          use Workathon for business forecasts ; use Workathon for business consulting