Cebu Air (CEB) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 rose 20% year-on-year to PHP 30.4 billion, driven by a 26% increase in passenger volume and strong cargo and ancillary growth, despite the shift of the Easter season to Q2.

• Net income dropped 79%-81% year-on-year to PHP 466-470 million, mainly due to higher operating and financing costs.

• Market share rose to 57% domestic and 23% international, reinforcing leadership in the Philippines.

• Strategic investments in fleet and network expansion, including the acquisition of AirSWIFT, have supported growth but pressured margins.

• Operational resilience maintained despite global supply chain, engine repair challenges, and seasonality.

Financial highlights

• Passenger revenue grew 19% year-on-year to PHP 21.2 billion, ancillary revenue up 22% to PHP 7.5-7.6 billion, and cargo revenue increased 35% to PHP 1.7 billion.

• EBITDA held steady at PHP 6.7 billion (21.9%-22% margin); EBIT declined 26% to PHP 2 billion.

• Net income margin fell to 2% from 9% last year.

• Operating expenses rose 26% year-on-year to PHP 28.5 billion, mainly due to higher fuel, maintenance, and ground handling costs.

• Total assets reached PHP 239.3 billion; net debt at PHP 159 billion, net debt/EBITDA at 5.5x.

Outlook and guidance

• 2025 seat capacity growth guidance revised down to 15%-20% from 25% due to supply chain and engine issues.

• CapEx for 2025 expected at PHP 30-35 billion, about half of 2024, supporting focus on returns.

• Sufficient retained earnings targeted for dividend distribution within the year, though no dividends declared yet.

• Positive demand outlook for both domestic and international travel, with continued tourism recovery and strong forward bookings.

• Management expects sufficient liquidity for the next 12 months, supported by improved cash flows and business transformation.