Azul Results

Azul Reports Record Second Quarter Results

Revenue increased 19.3% to R$1.7 billion year over year - Operating income was R$105 million, representing a margin of 6.1%

Azul

Azul S.A. (B3:AZUL4) (NYSE:AZUL) the largest airline in Brazil by number of cities and departures, announces today its results for the second quarter of 2017. The following financial information, unless stated otherwise, is presented in Brazilian reais and in accordance with International Financial Reporting Standards (IFRS).

Financial and Operating Highlights for 2Q17

  • Operating income was R$104.9 million, representing a margin of 6.1% compared with R$1.3 million and a margin of 0.1% in 2Q16. This is a record second quarter operating result for Azul.
  • EBITDAR increased 41% to R$476.1 million, representing a margin of 27.6%.
  • Net loss totaled R$33.9 million, representing an improvement of R$86.2 million over 2Q16.
                       
Financial results (R$ million)    

2Q17

   

2Q16

   

% ?

   

1H17

   

1H16

   

% ?

Operating revenues 1,723.3 1,443.9 19.3 % 3,597.0 3,112.5 15.6 %
Operating expenses (1,618.3 ) (1,442.6 ) 12.2 % (3,286.9 ) (3,104.2 ) 5.9 %
Operating income 104.9 1.3 7867.2 % 310.1 8.3 3648.4 %
Operating margin

6.1%

 

0.1%

 

+6.0 p.p.

8.6%

 

0.3%

 

+8.3 p.p.
EBITDAR 476.1 337.3 41.2 % 1,038.4 751.2 38.2 %
EBITDAR margin

27.6%

 

23.4%

 

+4.2 p.p.

28.9%

 

24.1%

 

+4.8 p.p.
Net income (loss) (33.9 ) (120.1 ) 71.7 % 21.3 (187.1 ) -111.4 %
Net income (loss) per PN share1 (R$) (0.10 ) (0.58 ) 82.8 % 0.07 (0.91 ) 107.7 %
Net income (loss) per ADS (R$) (0.30 ) (1.74 ) 82.8 % 0.21 (2.73 ) 107.7 %
1 One ADS equals three preferred shares (PNs)
 
  • Passenger traffic (RPKs) increased 21% over a capacity increase of 18% resulting in a higher load factor of 80.9%, 1.9 percentage points higher than in 2Q16.
  • In addition to the double-digit growth in capacity, total revenue per ASK (RASK) and passenger revenue per ASK (PRASK) increased 1.2% and 1.7% year over year totaling 28.93 cents and 24.92 cents, respectively.
  • Operating cost per ASK excluding fuel (CASK ex-fuel) decreased 8.1% while CASK decreased 4.9%, despite the 11.2% increase in fuel cost per liter.
  • Net financial expenses decreased 33.8% from R$168.8 million to R$111.8 million due to lower average cost of debt and repayment of more expensive loans.
  • At the end of 2Q17, our total cash1 and receivables position totaled R$3.0 billion, representing 42.4% of the last twelve months’ (LTM) revenues.
  • Azul’s operating fleet totaled 123 aircraft at the end of the quarter, including eight next-generation A320neo aircraft.
  • TudoAzul recorded a 48% year over year increase in gross billings (ex-Azul) over LTM.
  • Azul was nominated by Skytrax Best Low-Cost Carrier in South America for the seventh year in a row. Skytrax also awarded our team Best Airline Staff Service in the region for the second year in a row.
  • Azul was the most on-time airline in Brazil in 2Q17 with an on-time performance of 86.4% (FlightStats).

Azul (B3: AZUL4, NYSE: AZUL), the largest airline in Brazil by number of cities and departures, offers 739 daily flights to 102 destinations. With a fleet of 123 aircraft and more than 10,000 crewmembers, the company had a network of 202 non-stop routes as of June 30, 2017. Among other awards, Azul was named third best airline in the world by TripAdvisor Travelers' Choice in 2017, best low cost carrier in South America for the seventh consecutive time by Skytrax in 2017, and the world's most on-time low-cost airline in 2015 by the Official Airline Guide (OAG).

1 Includes cash and cash equivalents, short-term and long-term investments, and current and non-current restricted investments.



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