Azul Results

Azul Reports Net Income of R$304 Million in 4Q17 and R$529 Million for the Full Year 

Operating margin was 13.9% in 4Q17 and 11.1% in 2017

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 fourth quarter of 2017 and for the full year 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 4Q17

  • Operating income was R$305.6 million, representing a margin of 13.9% compared to R$170.0 million and a margin of 9.3% in 4Q16. This is a record fourth quarter operating result for Azul and was achieved even with the 16.0% increase in fuel prices year over year. Operating margin was 11.1% for the full year compared to 5.2% in 2016.
  • EBITDAR increased 27.9% to R$674.2 million, representing a margin of 30.7%, making us one of the most profitable carriers in South America.
  • Net income totaled R$303.7 million, representing an improvement of R$252.4 million over 4Q16. Net income in 2017 came in at R$529.0 million, compared to a net loss of R$126.3 million the year before.
                         
Financial results (R$ million)   4Q17   4Q16   % ∆   2017   2016   % ∆
Operating revenues   2,194.3     1,820.6     20.5 %   7,789.5     6,669.9     16.8 %
Operating expenses   (1,888.7 )   (1,650.6 )   14.4 %   (6,924.5 )   (6,325.6 )   9.5 %
Operating income   305.6     170.0     79.8 %   865.0     344.3     151.3 %
Operating margin   13.9 %   9.3 %   +4.6 p.p.   11.1 %   5.2 %   +5.9 p.p.
EBITDA   359     245     46.3 %   1,165     645     -69.2 %
EBITDA margin   16.4 %   13.5 %   21.4 %   0     0     9.4 %
EBITDAR   674.2     527.1     27.9 %   2,346.5     1,806.4     29.9 %
EBITDAR margin   30.7 %   29.0 %   +1.7 p.p.   30.1 %   27.1 %   +3.0 p.p.
Net income (loss)   303.7     51.3     491.9 %   529.0     (126.3 )   518.8 %
Net income (loss) per PN share* (R$)   0.91     0.19     378.9 %   1.68     (0.55 )   405.5 %
Net income (loss) per ADS (US$)   0.83     0.17     388.2 %   1.52     (0.51 )   398.0 %
* One ADS equals three preferred shares (PNs)                        
                         
  • Passenger traffic (RPKs) grew 12.7% on a capacity increase of 10.2% resulting in a load factor of 82.7%, 1.9 percentage points higher than in 4Q16.
  • Total revenue per ASK (RASK) increased 9.4% to 33.73 cents year over year even with a double-digit growth in capacity.
  • Net financial expenses decreased 34.4% from R$122.0 million to R$80.0 million.
  • At the end of 4Q17, our total cash1 position totaled R$3.6 billion, representing 45.7% of the last twelve months’ revenues.
  • Azul ended the year with a total debt position of R$3.5 billion resulting in an adjusted net debt to EBITDAR leverage ratio of 3.9x compared to R$4.0 billion and a leverage of 5.7x in 2016.
  • Azul’s operating fleet totaled 122 aircraft at the end of the quarter, including 12 next-generation A320neo aircraft.
  • On October 19th, Azul Investments LLP priced an offering of US$400.0 million aggregate principal amount of 5.875% senior unsecured notes due 2024.
  • TudoAzul recorded a 33.7% increase in gross billings (ex-Azul) in 2017 compared to 2016.
  • In December, Azul signed an MoU with Correios, Brazil’s postal service, for the creation of a private integrated logistics company. Azul will own 50.01% of the new company after the agreement is approved by Brazilian authorities.
  • Azul ranked as the most on-time airline in Brazil and the most on-time low-cost carrier in the Americas in 2017 according to OAG’s Punctuality League, the industry's most comprehensive annual ranking of on-time performance.



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