Azul Results

Azul Reports Record Third Quarter Results

Operating income increased 50% year over year, yielding a margin of 12.5%

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 third quarter of 2017 (“3Q17”). 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 3Q17

  • Operating income was R$249.3 million, representing a margin of 12.5% compared to R$166.0 million and a margin of 9.6% in 3Q16. This is a record third quarter operating result for Azul.
  • EBITDAR increased 20% to R$634.0 million, representing a margin of 31.7%, making us the most profitable carrier in South America.
  • Net income totaled R$204.0 million, representing an improvement of R$194.6 million over 3Q16.
           
Financial results (R$ million) 3Q17 3Q16 % ? 9M17 9M16 % ?
Operating revenues 1,998.2 1,736.8 15.0% 5,595.2 4,849.3 15.4%
Operating expenses (1,748.9) (1,570.8) 11.3% (5,035.8) (4,675.0) 7.7%
Operating income 249.3 166.0 50.1% 559.4 174.3 220.9%
Operating margin 12.5% 9.6% +2.9 p.p. 10.0% 3.6% +6.4 p.p.
EBITDAR 634.0 528.0 20.1% 1,672.4 1,279.3 30.7%
EBITDAR margin 31.7% 30.4% +1.3 p.p. 29.9% 26.4% +3.5 p.p.
Net income (loss) 204.0 9.4 2060.0% 225.4 (177.6) 226.9%
Net income (loss) per PN share* (R$) 0.62 0.04 1450.0% 0.73 (0.82) 189.0%
Net income (loss) per ADS (US$) 0.59 0.04 1375.0% 0.69 (0.76) 190.8%
 
* One ADS equals three preferred shares (PNs)
 
  • Passenger traffic (RPKs) increased 16% over a capacity increase of 13% resulting in a higher load factor of 83.1%, 2.1 percentage points higher than in 3Q16.
  • In addition to the double-digit growth in capacity, total revenue per ASK (RASK) increased 1.5% to 30.96 cents year over year.
  • Total CASK decreased 1.7%.
  • Financial expenses decreased 29.6% from R$200.5 million to R$141.2 million due to lower average cost of debt and repayment of more expensive loans.
  • At the end of 3Q17, our total cash1 position totaled R$3.1 billion, representing 41.5% of the last twelve months’ (LTM) revenues.
  • Total debt decreased R$736.9 million in the quarter to R$2.9 billion resulting in an adjusted net debt to EBITDAR leverage ratio of 3.9x.
  • Azul’s operating fleet totaled 118 aircraft at the end of the quarter, including eight next-generation A320neo aircraft.
  • On September 19th Azul successfully concluded its secondary offering of 44.7 million preferred shares (14.9 million ADRs) totaling R$1.25 billion (US$398.5 million), improving Azul’s average daily liquidity by more than double.
  • TudoAzul recorded a 47% year over year increase in gross billings (ex-Azul) over LTM.
  • Azul was the most on-time airline in Brazil in 3Q17 with an on-time performance of 86.1% (FlightStats, A15).



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