Azul (AZUL4) Q2 2024 earnings summary

Executive summary

• Revenue for 2Q24 was R$4.2 billion, with RASK at 38.22 cents and EBITDA of R$1.1 billion (25.2% margin), despite significant headwinds from currency devaluation, high fuel prices, and severe flooding in southern Brazil.

• EBIT for 2Q24 was R$441 million, representing a 10.6% margin.

• Net loss for 2Q24 was R$3.87 billion, mainly due to foreign exchange losses from the depreciation of the Brazilian real.

• The Elevate plan was launched, targeting over R$1 billion in incremental value through revenue, cost, fleet, and financing initiatives.

• The company rapidly adapted to challenges, redeploying capacity and leveraging business units, which contributed over 20% of RASK and 30% of EBITDA.

Financial highlights

• CASK fell 1.8% year-over-year to R$34.18 cents, with CASK ex-fuel down nearly 3% year-over-year, driven by cost reduction and productivity gains.

• Operating income was R$441.2 million, with a margin of 10.6%.

• Immediate liquidity stood at R$2.5 billion, representing 13.4% of LTM revenues.

• Passenger traffic (RPK) increased 3.9% on a 3.4% capacity increase, with a load factor of 80.3%.

• Capex for 2Q24 was R$305.5 million, up 37.7% year-over-year, mainly for engine overhauls and pre-delivery payments.

Outlook and guidance

• Expectation of over R$6 billion in EBITDA for 2024, a 17% increase from 2023 and 66% higher than 2019.

• Positive booking trends and fare increases are expected to continue, supported by strong economic indicators and seasonality.

• International long-haul capacity projected to grow 50% in the second half, with normalization expected after temporary reductions.

• Elevate plan initiatives will ramp up in 2024 and are expected to contribute a full R$1 billion to EBITDA in 2025.