Rex reports $16.5 million loss for 1H23, but there is light at the end of the tunnel

Rex reports $16.5 million loss for 1H23, but there is light at the end of the tunnel

Rex Express Holdings Limited (REX) has announced an after tax loss of $16.5 million for the six months ending 31 December 2022, an improvement of 55 per cent over the prior corresponding period.

The loss includes a negative impact of $23 million related to mark-to-market valuation of convertible note and warrant facility entered into with the PAG in 2020.

Although the loss sounds dramatic, it came about by the increase in value of Rex shares rather than direct cash which was $1.9 million after tax for the period.

REX note that domestic jet services returned to monthly profitability in September 2022, only seven months after the resumption of domestic services to their full scale and the last four months achieved consistent growth in the 1H2023 time period.

What’s holding REX back? It’s their regional operations at this stage, however they have been positive at EBITDA level for the last four months of the period and are expected to return to monthly profitability in Q3FY23.

Revenue for the period improved by 282.2 per cent against the prior corresponding period whilst Government grants and subsidies declined by 93 per cent to $1.9 million.

“The results are pleasing considering that domestic jet services only really operated in a relatively COVID-free environment since late February 2023,” executive chairman, REX, Lim Kim Hai, said.

“To achieve profitability in such a short period under normal environment is fairly unprecedented in the world.”

Thanks to partnership agreements with travel agency groups, higher revenue from expanded operations and higher cadet intake at pilot academies are expected to further contribute to REX’s performance in 2HFY2023.

REX has also celebrated a number of milestones in recent times, including it’s 20th anniversary and the purchase of National Jet Express (NJE).

REX has also announced the lease of two more Boeing 737-800NG’s to be introduced at the end of this and beginning of next financial years.

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