Data refers to the 4th quarter of 2023; The airline sector was one of the hardest hit by the Covid-19 pandemic restrictions
Airlines went through a period of turbulence in the post-pandemic period, with indicators worsened by an uncertain and challenging economic environment. With high leverage as a legacy, restructuring efforts in the sector remain a concern for investors and creditors. In the Brazilian market, Azul and GOL present their balance sheets for the 4th quarter of 2023 on Thursday morning (March 28, 2024).
In a report, Genial Investimentos indicated that among the factors putting pressure on companies last year were rising global interest rates, a credit crisis in the markets, long debt renegotiation processes and exchange rate volatility.
“In the 2nd semester, the global panorama became even more complicated with the outbreak of new geopolitical conflicts. In this context, an additional layer of volatility has taken over the main variables that influence the sector’s operating costs”says Genial, who also mentions the instability in the prices of as factors of significant pressure on the airline sector.
GOAL
Gol should present earnings per share (LPA) of R$0.37 and revenue of R$5 billion, according to the InvestingPro, Investing.com’s premium platform. The airline is experiencing a series of difficulties with its debt, which led to Chapter 11 (request for judicial recovery in the USA).
For Gol, BTG bank expects sales of R$4.99 billion, Ebitda of R$1.168 billion and a net loss of R$591 million. The weak quarter will be driven by soft operational data and timid margins, in the bank’s opinion.
Gol’s operational preview pointed to an offer (ASK) with a drop of 5.7% in the last 3 months of the year, in the annual comparison. Demand (RPK), in turn, fell 1.1% in the same analysis. The occupancy rate was 84%, compared to 80.1% in the 4th quarter of 2022.
Genial Investimentos highlights the company’s difficult period as it tries to restructure liabilities.
“At the end of the 3rd quarter of 2023, the company had less than R$1 billion in cash against more than R$20 billion in debt and aircraft leasing obligations. If we take into account other liabilities, this number exceeds R$27 billion, of which R$3 billion is due in the short term”says Genial, pointing out that Chapter 11 is carried out in the format deptor in possession (DIP), which allows for continued operations and ownership of assets while under the protection of the bankruptcy court for financial reorganization without interference from creditors.
Genial estimates revenue of R$4.8 billion for Gol, with Ebitda of R$1.236 billion. The positive seasonality in the period should be the highlight, leading to increases in fares, despite the company having had a decrease in demand due to the total supply of seats falling. Operating costs such as fuel and maintenance can also pressure margins.
In the 3rd quarter, Gol’s revenue was R$4.7 billion, the occupancy rate was 83.7%, and Ebitda was R$1.250 billion. The net loss was R$1.3 billion.
Blue
Azul tends to present earnings per share (LPA) of R$0.20 and revenue of R$5 billion, according to the InvestingPro. Analysts will be attentive to the company’s prospects and how it may indicate its behavior in the future in the face of its competitor’s weakness.
Consolidated passenger traffic (RPK) showed a positive variation of 9.1% in the 4th quarter of 2023, in the annual analysis. The offer (ASK) rose 6.5% in the same comparison. The occupancy rate was 80%, compared to 78.1% in the 4th quarter of 2022.
In BTG’s estimate, Azul should present revenue of R$5 billion, with an EBITDA of R$1.5 billion and a profit of R$85 million. The bank expects positive data, solid traffic and solid earnings.
Genial Investimentos projects net revenue of R$5 billion and Ebitda of R$1.4 billion. Operating performance should be robust, with record revenue and significant volumes, but operating margins should decline, given the increase in the average price of fuel, in addition to financial expenses.
In Genial’s opinion, Gol’s entry into Chapter 11 could open up a space for Azul in the Brazilian market, expanding its presence and capturing a greater share of the market.
“In this context, Azul emerges as a candidate to fill part of a possible vacuum left by Gol. Despite having a smaller route overlap compared to Latam, our expectation is that Azul can benefit from a favorable scenario, both due to demand migration and new fare increases”say analysts.
In the 3rd quarter, Azul presented net revenue of R$4.9 billion, Ebitda of R$1.5 billion and net loss of R$1 billion. Using the adjusted criteria, the net result was a negative R$360 million.
With information from Investing Brasil.
