Jet defers Q1 results; Chairman tries to allay shareholder fears
10 August 2018
Jet Airways on Thursday deferred the release of its fiscal first quarter results to an unspecified date after its audit committee declined to recommend it to the board pending “closure of certain matters”.
The development comes after the company's AGM on Thursday.
Jet’s share prices hit a 52-week low on 3 August, following news that the airline only had cash to survive for 60 more days, unless cost-cutting measures are put in place. The stock had fallen 7 per cent in the last five days.
In a BSE filing late in the evening, the airline said the board of directors decided not to review the unaudited financial performance for the June quarter.
"The audit committee did not recommend financial results to the board for its approval, pending closure of certain matters," the airline said in the regulatory filing without offering more details.
Srinivasan Vishvanathan, chairman of audit committee and Jet board member, quit earlier in the day adding to the confusion and raising questions about the reasons behind the deferment.
The news could further spook investors who have already been giving a thumbs down to the stock. Shares of India's second-largest airline hit a 52-week low of Rs286.95 in intra-day trade on Thursday. It closed at Rs301.7. On a year-to-date basis, the stock has tanked 63.7 per cent, highest fall among aviation stocks.
A senior executive, speaking on condition of anonymity, said the decision to defer results was taken an hour after the meeting ended and most executives and board members had already left the venue.
Besides Viswanathan, Jet’s audit committee consists of Ashok Chawla, a former aviation secretary; Vikram Mehta, former chairman of Shell Group of companies and Etihad Airways' representative Harsh Mohan, among others.
Jet Airways chairman Naresh Goyal apologised to shareholders for the losses they suffered because of the sharp erosion in the airline’s share price. “A lot of shareholders have lost money. I felt guilty and embarrassed,” Goyal told shareholders after listing out measures for growth and corporate governance at the annual general meeting on Thursday.
The chairman said the Rs636-crore loss in the last financial year was because of an increase in cost beyond the control of the company and it was made worse by the massive capacity addition by rivals and irrational pricing in the market.
The airline, he said, would continue to strengthen its relations with Etihad Airways, which owns 24 per cent stake in Jet, to connect new destinations in the West Asia and Africa regions. The partnerships with Air France-KLM and Delta that allowed Jet to provide greater connectivity to Europe and the US would also be strengthened. It is also looking at cooperation from Air India in areas of engineering and flight operations.
Responding to shareholders’ questions on pay cuts, chief executive officer Vinay Dube said the management was looking at various options and restructuring pay was one of them. “We are in dialogue with employees and they are supportive of our plans,” Dube said.
Shareholders, though, were not impressed. Some questioned the airline’s plans to return to profit. Some asked how the staff will have morale if the bosses say funds will run out in 60 days. The airline has denied its top executive made such a statement.