Cargojet Inc.

This conference has been recorded. All participants, please stand by. Your meeting is ready to begin. Good morning, ladies and gentlemen. Welcome to the cargo jet conference call. I would now like to turn the meeting over to Pauline Dillon. Please go ahead, Pauline.

Thank you, operator. Good morning, everyone, and thank you for joining us today for our third quarter results call. With me on the call today are A.J. Romani, our president and chief executive officer, Jimmy Porteus, our Chief Strategy Officer, Scott Calver, our Chief Financial Officer, Sanjeev Mani, our Vice President, Finance. After opening remarks about the quarter, we will take questions. I would like to point out that certain statements made on this call, such as those relating to our forecasted revenues, costs, and strategic plans, are forward-looking within the meaning of applicable securities laws. This call also includes references to non-GAAP measures like adjusted EBITDA, adjusted earnings per share, and return on invested capital. Please refer to our most recent press release and MD&A for important assumptions and cautionary statements relating to the forward-looking information and for reconciliation of non-GAAP measures to GAAP income. I will now turn over the call to AJ.

Thank you, Pauline. Good morning, everyone, and thank you for joining us on the call today. Despite the backdrop of macro headwinds and market conditions, I am very pleased with our results. While our EBITDA was negatively impacted by fuel surcharge lag, we were able to report revenue growth. Our diversified business model continues to show resilience. Transportation and logistic industry is the backbone of economic activity. If the economic activity slows down, it affects all forms of transportation, rail, air, and ground, as we all feel the impact. We are seeing an interesting mix of transactions in the market. As many retailers have already stated in their earnings reports that the spending of discretionary goods is slowing down, but more of the household dollars are being spent on daily essential goods. For us, it's the number of packages that drive our business. So for the growth in the household essential goods is offsetting the declines in the discretionary goods transactions. But as I have stated before, we are not immune to macro factors. While it's true that we cannot control the aggregate demand, but there are many areas of business where we can drive performance. Let me touch on a few areas where we're making a significant impact. At the highest level of priority is a cash flow management. We have continuously found ways to defer or cancel in several aspects of our CapEx plan announced in the investor day. All of our fleet decisions had optionality, which allowed us to delay or cancel certain aircraft purchase. As a result, We have significantly reduced our planned CapEx and there may be more opportunities. Scott will provide some color on the CapEx a little later on. Equally important area of focus is cost management. I'm seeing examples of cost savings every day from my team and very encouraged with the new culture of frugality that is setting in at Cargill. This talk, this took some time given the fact-based growth we handled during COVID period, but the new market is setting in, new mindset is setting in very fast. In our business, the biggest cost driver is capacity utilization. We are very pleased to work closely with our customers to optimize our network so we can avoid flying sub-optimized routes and reduce block hours. This is an area of core strength and differentiates us from others. All current contracts with each of our strategic customers are now renewed for longer term as much as 2029 and 2030. Despite new entrants in the air cargo, we feel confident in our competitive position in both domestic and international markets. We do not see much of an impact any of these new entrants have made in the Canadian cargo scene. With all these actions undertaken to further strengthen our business model, we are even more confident that our ability to come out stronger on the other hand of the economic cycle. Therefore, cargo jets board just approved a share buyback program through the normal course issuer bid. We believe there is true opportunity to create value for shareholders by purchasing common shares. We also announced 10% increase in dividend payouts in line with our previously stated strategy of annual dividend growth. Our focus on service quality and on-time performance continues to win customer praise, and it will always remain the bedrock of who we are. Every team member at the CargoJet understands that. As I always say, one thing, and we do it well, we do not have to make trade-offs between passengers and cargo. Every package on our network flies first class. That concludes my prepared comments, but I must add that the on-time performance of our Quora 3 this year again was stellar at 99.5% on-time performance, and that's what makes CargoJet what it is today. I will pass on the comments to Scott Calvert for an update on the business side.