Icelandair Group (ICEAIR) Q2 2024 earnings summary

Executive summary

• Q2 2024 focused on efficiency, with unit cost (CASK) down 2.4% year-over-year despite inflationary pressures.

• Softer demand to Iceland led to a shift in passenger mix toward transatlantic/VIA markets, impacting passenger revenue and EBIT.

• Cargo operations returned to profitability after restructuring, and leasing continued to deliver strong results with increased aircraft in service.

• On-time performance improved to 86% in Q2, up 11 percentage points year-over-year, making the airline the most punctual in Europe in June.

• Strong liquidity position with cash and marketable securities at $413 million at quarter-end, up $143 million since the start of the year.

Financial highlights

• Passenger revenue was $353 million, flat year-over-year; cargo revenue was $17 million, down $5 million.

• Operating income was $409 million, similar to last year; operating expenses (excluding depreciation) were $371 million, up 3%.

• EBIT for Q2 was $3 million, down from $20.9 million last year; net profit was $0.6 million, down from $13.7 million.

• Cash and marketable securities at quarter-end were $413 million; equity at $233 million, with a 13% equity ratio.

• For H1 2024, total revenue was $668.3 million, EBITDA was $5.2 million, and EBIT loss was $65.6 million.

Outlook and guidance

• No full-year financial guidance provided due to market uncertainty and potential impact from seismic activity.

• Capacity growth forecasted at 9% in Q3 and 7% in Q4, totaling 10% for the year; 4.7 million passengers expected for 2024.

• Unit costs expected to remain slightly lower in H2 versus last year.

• Cargo operations expected to return to positive EBIT for the full year after a $17 million loss last year.

• Four new Airbus A321LRs to enter service next winter; first delivery expected Q4 2024.