Cebu Air (CEB) Q3 2024 earnings summary

Executive summary

• Signed a landmark purchase agreement with Airbus for up to 152 A321neo aircraft, valued at $24 billion, marking the largest aircraft order in Philippine aviation history, with deliveries starting 2029.

• Acquired AirSWIFT for P1.75 billion, expanding network to El Nido and other tourist destinations, and increasing Manila airport slots.

• Achieved a double A MSCI ESG rating, positioning as a leader in sustainability among global airlines.

• Completed quasi-reorganization eliminating a P16.3 billion retained deficit, strengthening equity and positioning for future shareholder distributions.

• Faced operational challenges from typhoon disruptions, software outages, and changes in school calendar impacting demand.

Financial highlights

• Q3 2024 revenues were PHP 23.1 billion, down 1% year-on-year; passenger revenues fell 3%, ancillary revenues down 2%.

• Cargo revenue grew 40% to PHP 1.4 billion in Q3, with 44.6 million kilos carried, up 48% year-on-year.

• Year-to-date revenues reached PHP 74.5 billion, up 11.4% year-on-year; net income at PHP 3.37 billion, down 32.9%.

• EBITDA for Q3 was PHP 4.3 billion, down 24% year-on-year; operating income at PHP 200 million; net loss of PHP 200 million after gains from engine sale and leasebacks.

• Operating expenses grew 13.3% to PHP 68.84 billion, mainly from fleet expansion and higher financing costs.

Outlook and guidance

• Fleet projected to grow from 100 aircraft in 2025 to 126–208 by 2035, with annual growth rates between 2% and 15%.

• Capacity to grow 18–20% in 2024 and 20–25% in 2025, with most growth focused on domestic routes, especially Manila.

• CapEx for 2025 guided at PHP 35–40 billion (~$600 million), about half of 2024 levels; long-term capital expenditure commitments of PHP 447.4 billion for aircraft acquisitions.

• CASK ex-fuel expected to see low single-digit reductions in 2025.

• Liquidity supported by improved cash flows and new financing, with sufficient resources projected for the next 12 months.