Norse Atlantic ASA (NORSE) Q2 2024 earnings summary

Executive summary

• Revenue grew 65% year-over-year to $164.8 million in Q2 2024, with passenger numbers up 99% and load factor rising to 82%.

• Achieved strong growth in flights operated, with a 105% increase in capacity (ASK) and more than doubling passengers year-over-year.

• Charter and ACMI revenue grew tenfold year-over-year, with charter flights up 729% and high demand continuing into the fall.

• Maintained high operational performance with 99.5% flight completion and 80% punctuality at major airports.

• Strategic shift underway to focus on long-term ACMI/charter contracts and cost reductions, with at least half of winter capacity planned for ACMI/charter.

Financial highlights

• Q2 2024 revenue reached $164.8 million, up from $100.1 million in Q2 2023.

• EBITDA/EBITDAR was $3.2 million, up from $2.2 million in Q2 2023.

• Net loss for the quarter was $31.9 million, narrowed from $35.1 million in Q2 2023, affected by IFRS lease accounting.

• Operating cash flow was neutral to slightly positive, with a net free cash outflow of $9.2 million; quarter-end cash balance was $24 million.

• Ancillary revenue per passenger increased 8% year-over-year to $89.

Outlook and guidance

• July was softer than expected due to lower transatlantic fares and reduced demand for Paris during the Olympics, but August and forward sales are trending stronger.

• Strategic focus is shifting to profitability and stability, with plans to allocate over 50% of the fleet to charter activity in 2025 and secure multi-year charter contracts.

• Fleet to be simplified to only 787-9s, with three 787-8s to be redelivered in 2024, expected to yield a significant accounting gain.

• Company may require additional financing (debt/equity) depending on business plan and market conditions.

• GDS distribution expected in 2024 to broaden sales reach.