Azul (AZUL4) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was R$4.2 billion, with EBITDA of R$1.1 billion and a 25.2% margin, maintaining industry-leading profitability despite severe flooding and currency devaluation.

• EBIT for Q2 2024 was R$441 million, representing a 10.6% margin.

• Net loss was R$3.87 billion, mainly due to a significant foreign exchange loss from the 11.7% depreciation of the Brazilian real.

• Immediate liquidity rose 23.7% year-over-year to R$2.5 billion, representing 13.4% of LTM revenues.

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

Financial highlights

• RASK was R$38.22 cents, up 14.9% year-over-year; CASK was R$34.18 cents, down 1.8% from 2Q23.

• Adjusted CASK ex-fuel decreased 2.5% year-over-year to R$21.60 cents.

• Q2 results were negatively impacted by at least R$200 million due to reduced capacity in Rio Grande do Sul.

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

• Weekly average domestic fares increased 27% in July and August, supporting positive momentum for 2H24.

Outlook and guidance

• Bookings and fares are improving, with positive momentum anticipated for the seasonally stronger second half of 2024.

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

• Elevate plan expected to contribute an incremental R$1 billion to EBITDA in 2025.

• International capacity, temporarily reduced in 2Q24, is expected to normalize in 2H24 amid continued strong demand.

• Management expects continued improvement in bookings and profitability, supported by new next-gen aircraft and the Elevate plan.