El Al Isreal Airlines (ELAL) Q1 2023 earnings summary

Executive summary

• Q1 2023 operating revenue was $500.0m, up 16.7% vs Q1 2019; operating profit was $8.6m, while net loss was $34.4m.

• Activity reached 93% of Q1 2019 levels; EBITDAR was $60m vs $16m, supported by strong demand, higher fares and operating efficiencies.

• Cash was $233m at March 31, 2023; shareholders’ capital deficit was $349.6m, and management expected obligations to be met in the foreseeable future.

• Q1 was described as the strongest first quarter since privatization in 2005; a strategic plan launched in Q1 focuses on fleet renewal, route expansion, service and efficiency.

Financial highlights

• Operating revenue was $500.0m vs $429m in Q1 2019 and $283m in Q1 2022; a separate presentation cited sales of $674m.

• Operating profit was $8.6m vs a $53.5m operating loss in Q1 2019; pre-tax loss was $25.8m vs $71.0m, and net loss was $34.4m vs $55.0m.

• Passenger-flight revenue increased 19% vs Q1 2019, while cargo revenue was broadly unchanged; fuel expense rose 31.4% to $132.7m and non-fuel operating expenses fell by ~$23m.

• EBITDA was $54m vs $6m in Q1 2019; EBITDAR was $60m vs $16m.

• Operating cash flow was $72.7m vs $90.5m in Q1 2019; excluding the prior-period $44m grant and ~$14m salary-payment timing effect, current-period cash flow was higher.

Outlook and guidance

• The five-year 2023–2028 strategic plan targets growth, fleet renewal and route expansion; the fleet target is 60 aircraft by 2028.

• Most inactive aircraft are targeted for preparation by end-2024, with four 777 retrofits expected by then; an RFP was issued for narrow-body fleet renewal.

• The 16th Dreamliner was expected in Q3 2023 and the 17th in H1 2024; two further Dreamliners were under consideration.

• New and expanded routes included Mumbai, Delhi, Bangkok, Phuket, Tokyo and Miami; routes to Australia, the Philippines and additional US destinations were also being explored.