El Al Isreal Airlines (ELAL) Q3 2023 earnings summary

Executive summary

• Pre-war Q3 operating revenue reached $695.5M, up 11.1% YoY and 7.5% vs Q3 2019, despite activity at 84% of 2019 levels.

• The October 7 war began after the reporting period and materially changed flight operations, booking behavior and demand.

Financial highlights

• Q3 revenue was $695.5M; operating profit $85.4M, pre-tax profit $52.2M and net profit $52.5M.

• Q3 net profit was $52.5M vs $67M reported in Q3 2022; excluding the prior-year $38M grant-related accounting income, net profit grew >70%.

• Q3 EBITDA was $154M vs $156M YoY; EBITDAR was $172M vs $167M, with Q3 2022 figures including ~$38M of one-time grant income.

• Nine-month revenue was $1.825B, operating profit $183.1M and net profit $77.0M, vs $25.5M operating profit and a $28.1M net loss in 9M 2019.

• Operating cash flow was $92.3M in Q3 and $280.3M for nine months.

Outlook and guidance

• Q4 2023 ASK was expected to be 5%-10% below the pre-war business plan, with some PLF decline; RASK was not expected to differ substantially from Q4 2022.

• September–November sales were projected at $753M; projected vouchers and cash refunds totaled $262M, leaving sales net of refunds at $491M.

• Q4 priorities included operational continuity, retaining employee capabilities, adapting commercial activity to wartime conditions and continuing the strategic plan; Q1 2024 impact remained unestimated.