El Al Isreal Airlines (ELAL) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $839.1M, up 33% year-over-year, and H1 2024 revenue was $1,577M, up 40% year-over-year.

• Net profit for Q2 2024 was $147.4M, a 150% year-over-year increase, and $227.9M for H1 2024, up 830% year-over-year, driven by higher load factors, increased activity, and cargo performance.

• Exceptional demand for flights due to the ongoing war and reduced foreign airline activity led to high load factors and increased profitability.

• Cash and deposits at June 30, 2024, totaled $1,089.6M, with a significant reduction in net financial debt and a return to positive equity.

• Strategic plan focuses on fleet expansion, aiming for 24% market share at Ben Gurion Airport and improved operational efficiency.

Financial highlights

• Q2 2024 EBITDA was $265M (31.6% margin), up from $147.8M in Q2 2023; H1 2024 EBITDA was $503.3M.

• EBITDAR for Q2 2024 was $196M, up from $163M in Q2 2023 and $196M in Q1 2024.

• Free cash flow after debt service in Q2 2024 was $160M, up from $35.9M in Q2 2023; H1 2024 free cash flow was $347.2M.

• Net financial debt/EBITDA ratio improved to 0.8x at June 30, 2024, from 2.8x at year-end 2023.

• Booking trends show net sales growth, with future departure sales rising to 51% in Jun–Aug 2024 (est) from 43% in Jun–Aug 2023.

Outlook and guidance

• Strategic plan targets $3.5B revenue and 17–21% EBITDAR margin by 2028, with net debt to EBITDA ratio of 3–4x.

• Demand for flights remains strong into Q3 2024, with continued high load factors and increased sales for future periods.

• Fleet renewal and expansion expected to increase seat capacity from 6.2M in 2023 to 8.8M by 2031, supporting market share and efficiency goals.

• Ongoing investments in new aircraft, including agreements for up to 9 Dreamliner 787s and up to 31 737 MAXs, to support growth and carbon reduction.

• Free cash flow is projected to increase post-fleet expansion, with debt service not expected to rise significantly.