Ann: HY24 Results Presentation, page-6

As is the trend these days, the good stuff is magnified and up front and the bad stuff is downplayed and hidden in notes. It will be interesting to see Mr Markets reaction over the next few days. I’m thinking an initial glow and then a retreat based upon the auditor concern over continuing business.
I am both surprised and concerned. A E190 forward investment of some $182m and $204m over FY25 + $68m in ANZ Bank term facilities to be rolled in January 25 is a bit scary. Plus as of Jan24 we have tapped out all present finance facilities. Right now we are flying on fumes and our cash and working capital balances (which have blown out hugely on inventory build). This on top of an already heavy debt/equity ratio. I also get it that others can pass this along as ‘okay in the airline industry’ but the AQZ model isn’t exactly ‘airline’ more specialised aviation and airline services and renters’.
now the first tranche of E190’s was company making because the cost of $5m each was low and within a short time frame we had QAN with their hand up committing to 30 of them. Mind you the costs of readying them for operation were much higher than anticipated - mine at any rate and this kyboshed our dividends some 2 or 3 years ago.

This time around we have agreed to a substantial purchase - double our first effort dollar wise - without nailing the finance and no understanding of who and when someone will want a wet lease (publicly announced in contract form, at least). Surely comments like ‘the directors are confident’ should be backed up with an inkling of a plan and some disclosures of wet lease pre commitment or interest.
right now our situation is no different to a high rise developer announcing a new 60 story tower with no pre sales and no finance in place. Banks aren’t dumb they want pre commitments and strong evidence of cash flow. Right now our first 30 190’s aren’t exactly shooting the lights out with free cash flow, though it will improve YoY. There’s a lot of work required here, both in reality and in market reassurance. I’m a sceptic but I do have faith in management. Perhaps we just don’t know they are holding 4 aces in their hand. I hope so.
i certainly agree to no dividend till 2026, even then it’s likely to be a token as the engorged debt bubble is slowly dissipated.