“Look, none of this is new. All documents and data was always available to our equity and debt holders,” Flohr said.Auditing firm EY warn in a report on the company’s 2022 accounts that “a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern,” the article said.
Flohr denied that these points meant any risk to the company, which is headquartered in Malta and flies to 1,900 airports in 96% of the world’s countries, according to its website. He stressed that VistaJet is profitable on an EBITDA basis, which is the company’s main focus.
“We as a company, both shareholders and bondholders, [are] only focused on EBITDA, the cash creation of the company,” Flohr said. “The adjusted EBITDA was over $800 million in 2022. We never focused below the EBITDA line.”
Flohr said that he may consider using mark-to-market accounting this year rather than what he describes as “a very, very conservative 13 years to zero” depreciation policy, which he says would then mean the company is turning a profit. He stressed that the company has a clear EBITDA growth path.
“Going forward, this infrastructure really allows us to grow the company from approximately $800 million EBITDA to $1.5 billion EBITDA,” he said.
The FT report also notes that VistaJet had $831 million worth of prepaid flights on its books at the end of 2022, but only $134 million left in actual cash.
Flohr emphasized that this did not warrant concern, explaining that the company only needs roughly 22% of clients’ up-front payments to fly the jets they book.
“It’s not a problem at all. It’s a snapshot of December 31. Think about when clients pay us money up front — we need only about 20 to 22% of that number to serve our clients for the direct operating expenses of those flights,” he said.
He stressed that those deposits are non-refundable and is not money that clients can withdraw. “We have a subscription business model. The key of this number is to serve these hours. It costs us about 22% of those numbers to actually fly them.”
“When you look at absolute debt, you always need to make it relative to the EBITDA that is infrastructure produces, and actually our EBITDA has grown more in relative terms than our debt and hence, the company is extremely comfortable,” he said. “So are the shareholders and so are the bondholders with the capital structure that the company has in place.”
I keep my fingers crossed that it will turn out well, for the sake of our colleagues at Vista.