Cargojet’s Earnings Call: Growth Amid Trade Challenges

Cargojet (OTC) ((TSE:CJT)) has held its Q3 earnings call. Read on for the main highlights of the call.

Cargojet’s recent earnings call painted a picture of balanced optimism and caution, with strong domestic growth and strategic leadership transitions at the forefront. The company is poised for future expansion with new routes, yet faces challenges from global trade disruptions impacting ACMI and charter revenues.

Strong Domestic Network Performance

Cargojet reported impressive growth in its domestic network, with a year-over-year increase of over 6% and more than 12% year-to-date. This growth was primarily fueled by rising e-commerce volumes and inflation-based price adjustments, underscoring the company’s robust position in the domestic market.

Leadership Transition

A significant leadership change was announced, with Pauline Dhillon set to take over as CEO on January 1, 2026. The transition is expected to be smooth, with Jamie Porteous continuing to provide strategic guidance, ensuring continuity in Cargojet’s leadership.

New Route Expansion

Cargojet is expanding its reach with a new scheduled service to Liege, Belgium. This move connects its domestic network with Europe’s leading cargo gateway, potentially opening new opportunities for growth and strengthening its international presence.

Debt Refinancing Achievement

The company successfully refinanced its debt, redeeming 5.25% senior unsecured notes with proceeds from a new offering at 4.599%. This strategic move extends Cargojet’s debt maturity profile and reduces interest costs, enhancing financial stability.

Decline in ACMI Revenue

Cargojet faced a year-over-year decline in ACMI revenue, attributed to disruptions in transatlantic trade routes and a strategic shift towards more north-south operations. This reflects the broader challenges posed by global trade uncertainties.

Charter Business Decline

The charter business also saw a decline, with a reduction from five to three flights per week between China and Canada. This was due to disruptions in transpacific trade, although there is optimism for recovery in Q4 with the holiday peak season.

Global Trade Uncertainty

Cargojet is navigating seismic shifts in global trade, including the removal of the U.S. de minimis exemption, which has created near-term demand uncertainty. The company remains resilient, focusing on maintaining robust partnerships and stabilizing air cargo corridors.

Forward-Looking Guidance

Cargojet’s guidance emphasized resilience amid global trade disruptions. Despite challenges, the company expects stabilization in air cargo corridors and a potential recovery in its charter business by Q4. The focus remains on flexible fleet management and cost discipline, with an adjusted EBITDA margin of approximately 32%, aligning with historical trends.

In summary, Cargojet’s earnings call highlighted a strategic balance between leveraging domestic growth and navigating global trade challenges. The company’s proactive leadership transitions, route expansions, and financial maneuvers position it well for future growth, despite the headwinds in ACMI and charter revenues.