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DALLAS — GOL Linhas Aéreas (G3), the largest domestic airline in Brazil, has announced its results for the first quarter of 2023. The company has concluded its tenth capital raise in the last three years, which helped reduce its short-term liabilities. The quarter also showed a continued improvement in operating results, positioning GOL for further gains as air travel continues to grow.
The company achieved a record recurring EBITDA of R$1.2bn and positive operating cash flow, largely due to higher operating volumes in the quarter enabled by accelerated debt reduction. Net operating revenue reached a record R$4.9bn, a 52.8% increase from 1Q22 and 4.1% above 4Q22. The net income of R$620m represents R$1.48 per share and US$0.57 per ADS. However, the unit cost ex-fuel of 3.9 cents (US$) is 12.4% higher than in 1Q22.
In contrast, net leverage has decreased to 7.9x (6.0x in IFRS16 and 4.6x excluding the SSN due 2028), 1.6x lower than 4Q22. Total liquidity also increased to R$4.4 billion, 36% higher than in 1Q22. The company reiterated its 2023 outlook for EPADS of ~US$0.20 (fully diluted) and Net Debt/EBITDA of ~6x.
2023 is off to a strong start thanks to the excellent work and dedication of our Team of Eagles. During the quarter we delivered another sequential increase in our operating performance. We continue to add supply and with our disciplined approach to costs further drive higher levels of productivity. In January, we reached operating fleet utilization levels above 12 hours a day, a level last seen in 2019. As the market recovery continues, our objective is to increase annual average utilization and strengthen our low-cost operating model with our standardized fleet.
Celso Ferrer, CEO, GOL Linhas Aéreas
Summary
GOL also successfully completed a transformative financial transaction that strengthens its capital structure and significantly reduces maturities over the next three years. This transaction provides an additional source of liquidity to help drive growth. The company is proud of the work of the team and their commitment to safety and serving customers.
In the first quarter of 2023, GOL Linhas Aéreas transported 7.9 million passengers, a year-over-year increase of 17.7%. The net revenue per available seat kilometer (RASK) increased by 37.7% to 43.8 cents (R$), and the average yield per passenger increased by 32.0% to 48.5 cents (R$), the highest level in the company's history.
However, the recurring cost per available seat kilometer (CASK) increased by 20.9% to 36.35 cents (R$), and CASK Fuel increased by 32.0% to 15.75 cents (R$) due to the 24.4% increase in jet fuel prices. Recurring CASK ex-Fuel excluding cargo freighter operations increased by 12% to 20.24 cents (R$), or 3.9 cents (US$) due to inflationary effects on variable costs and an increase in take-offs per ASK.
During the quarter, G3, achieved record recurring EBITDA of R$1.2bn, and net operating revenue of R$4.9bn, representing a 52.8% increase from the first quarter of 2022 (1Q22). The increase in operating volume in the quarter was due to an accelerated debt reduction. The quarter also saw the company's net income of R$620m, representing R$1.48 per share and US$0.57 per ADS.
Post-pandemic Recovery
In addition to the financial highlights, the quarter also showed that GOL's recovery process is advancing, with a 14.1% increase in the number of Revenue Passenger Kilometers (RPK) and an 11.0% increase in Available Seat Kilometers (ASK) compared to the first quarter of 2022. The load factor increased by 2.3 percentage points to 83.3%, and the number of passengers transported by the company increased by 17.7% year-over-year, to a total of 7.9 million.
The quarter saw the company generate approximately R$0.2bn of free cash flow due to higher revenues and working capital initiatives, despite the increase in aviation fuel prices. The company's net debt ratio over recurring LTM EBITDA was 7.9x as of March 31, 2023, 1.6x lower than the leverage at the end of 2022. In March, a private placement of Senior Secured Notes maturing in 2028 in the amount of up to US$1.4bn was concluded with Abra Group, GOL's controlling shareholder.
Featured image: GOL PS-GPB Boeing 737-8 SBBR. Photo: Thiago Machado/Airways
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