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Aimia cuts Q2 net loss to $18.8 million; reports 13.6% increase in gross billings

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MONTREAL - Travel rewards company Aimia Inc. (TSX:AIM) has reported a sharp reduction in its net loss in the second quarter but a big drop in adjusted earnings as a result of prior changes in its so-called "breakage" estimates which factor in future redemption costs.

The Montreal-based operator of the Aeroplan travel rewards program says the net loss was $18.8 million or 14 cents per share in the quarter, compared with a net loss of $415.2 million or $2.43 per share in the same 2013 period.

Total revenue, also adjusted for breakage, was $555.4 million, compared with minus $123.3 million in the year-earlier period, while gross billings rose to $648.1 million from $570.6 million.

Adjusted earnings per share were 17 cents, down from 53 cents in the 2013 period.

Breakage refers to estimates of the percentage of people who acquire rewards but fail to cash them in, thereby lowering the overall cost of the program.

In the second quarter of 2013, total revenue included the non-comparable impact of the change in breakage estimate in the Aeroplan program which resulted in a reduction to revenue from loyalty units of $642.1 million, Aimia said.

Similarly, the net loss in the 2013 quarter included the non-comparable impact of the change in breakage estimate of $468 million, it said.

Aimia Inc. is a global leader in loyalty rewards management, employing more than 4,300 people in 20 countries worldwide. It owns and operates Aeroplan, Canada's premier coalition loyalty program, Nectar, the United Kingdom's largest coalition loyalty program, Nectar Italia, Italy's largest coalition program and has stakes in many other around the world.

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