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%.

• Completed first full year of operations, with Q2 marking the end of the initial 12-month cycle.

• 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.

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

• Improved credit card payment terms post-quarter-end released immediate cash, addressing near-term liquidity.

Financial highlights

• Q2 revenue reached $164.8 million, up from $100.1 million in Q2 2023, driven by a 105% increase in capacity (ASK).

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

• Net loss for the quarter was -$31.9 million, 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.

Outlook and guidance

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

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

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

• GDS distribution expected in 2024 to broaden sales reach.

• Strategy update, including capital needs, to be provided later in the fall.