Norse Atlantic ASA (NORSE) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached a record USD 222 million, up 8% year-over-year, with 514,913 passengers carried, an 18% increase, and load factor at a record 86% (+3p.p. YoY).

• Despite strong operational performance (99.3% flight completion, 77% punctuality), the net loss was USD 6.3 million, compared to a profit of USD 1.6 million in Q3 2023.

• The company is transitioning to a dual ACMI/Network strategy, highlighted by a major long-term ACMI contract for six aircraft with a minimum value of USD 462 million.

• Airfares softened by 7% YoY, but ancillary revenue per passenger remained robust at USD 89 (+1% YoY).

• Strategic fleet simplification is underway, with three Boeing 787-8s to be redelivered, leaving a uniform 787-9 fleet.

Financial highlights

• EBITDAR for Q3 was USD 26.7 million, with a net loss of USD 6.3 million; operating profit (EBIT) was USD 4.6 million.

• Net cash flow from operations was USD 32 million, and end-of-quarter cash was USD 25.3 million, down from USD 42.6 million YoY.

• Book equity was negative USD 184.5 million, mainly due to USD 159 million in non-cash lease accounting costs.

• Net change in free cash for the quarter was USD 2.7 million.

• YTD revenue was USD 464.99 million.

Outlook and guidance

• 2024 is not expected to be profitable, but profitability is anticipated in 2025, driven by ACMI contracts and cost reductions.

• The ACMI contract will deploy two aircraft in February 2025 and four more in September 2025, with a minimum contract value of USD 462 million.

• The company will focus its network on proven, profitable routes and increase fixed revenue share to reduce market risk.

• Cost reductions, especially in SG&A and crewing, are expected to materialize by May 2025.

• Q4 2024 and Q1/Q2 2025 are trending ahead of prior years in load factor and fares per ASK.