SATA GROUP MAINTAINS REVENUE GROWTH TRAJECTORY, BUT OPERATING COSTS CONDITION THE PERFORMANCE OF THE SEMESTER
In the first half of 2024, SATA Group’s airlines carried 1,174 thousand passengers, corresponding to 166 thousand more passengers (+16%) when compared to the same period last year. The available capacity registered an increase of 13% compared to the first half of 2023, translating into a general increase in the Group's average occupancy rate (load factor) of 2.6 p.p., reaching 78.6%.
Constant revenue growth continues in 2024, reaching around 180 million euros, which represents an increase of around 32 million euros (+22%) when compared to the same period in 2023. However, the pressure on costs caused EBITDA to fall to negative 6.5 million, which compares with the positive 3.6 million euros recorded in the first half of 2023.
SATA Group's Net Result was affected by the increase in operating costs as well as financial expenses, standing at negative 45 million.
SATA AIR AÇORES RECORDS INCREASE IN REVENUE AND PASSENGERS CARRIED. DESPITE OPERATIONAL CONSTRAINTS, NET RESULTS SHOW IMPROVEMENTS, AS A RESULT OF THE REDUCTION IN FINANCIAL EXPENSES
o SATA Air Açores carried 427 thousand passengers, +6% compared to the 1st Semester of 2023, reaching a load factor of 74.5%, higher than the load factor of the same period last year (70.6%).
o Revenue in the 1st Semester of 2024 reached 51.4 million (6.1 million more when compared to the 1st Semester of 2023, +13.4%).
o The Operating Result before interest, taxes, depreciation and amortization (EBITDA) was negative by 1.2 million, which compares with the 0,1 million recorded in the 1st Semester of 2023. o Net Profit in the 1st Semester of 2024 was negative 9 million, which compares to a negative net profit of 11.4 million in the same period last year. SATA Air Açores presented a total revenue of 51.4 million euros in the 1st Semester of 2024, representing an increase of 13.4% compared to the 1st Semester of 2023.
This increase in revenue reflects the increase in the number of passengers carried, +23 thousand passengers (+6%) compared to the 1st Semester of 2023. The average flight occupancy rate (load factor) increased when compared to the same period last year, having been 74.5% in the 1st Half of 2024, +3.9 p.p. compared to the 1st Semester of 2023.
Operating costs in the first half of 2024 totaled 52.7 million, +16% compared to the same period last year, mainly due to the increase in i) personnel costs, resulting from the impacts of the Company's new agreements ; ii) costs of irregularities/indemnities and ACMI; iii) direct costs, i.e. fuel, taxes, catering, etc.; and iv) expenses with aircraft maintenance, resulting from unscheduled maintenance events on the Company's fleet.
Considering the increase in costs greater than revenue, there was a deterioration in operating profit before interest, taxes, depreciation and amortization (EBITDA) in relation to 2023. In the 1st Semester of 2024, EBITDA was negative by 1.2 million, which compares to negative 55 thousand in the 1st Semester of 2023.
Operating results were largely affected by irregularities (indemnities + ACMI's) verified in the first half of 2024. Excluding these impacts, SATA Air Açores would have achieved an operating result very similar to the previous year.
Net profit, in turn, registered improvements compared to the same period last year, mainly due to the reduction in the impact of financial charges on the Company's accounts (a result of the early amortization of 60 million in September 2023). In the 1st Semester of 2024, SATA Air Açores presented a net result of negative 9 million euros, which compares with negative 11.4 million euros in the same period of the previous year.
SATA INTERNACIONAL - AZORES AIRLINES OBTAINS REVENUES OF 135 MILLION EUROS. OPERATING COSTS NEGATIVELY IMPACT RESULTS
o In the 1st Semester of 2024, 747 thousand passengers were carried, +24% vs. 1st Semester of 2023, with a load factor of 81.1% (+1 p.p. vs. 1st Semester of 2023).
o Revenue totalized 135.5 million (+24.4 million when compared to the 1st Semester of 2023).
o The Operating Result before interest, taxes, depreciation and amortization (EBITDA) was negative 4.9 million.
o Net Profit in the 1st Semester of 2024 was negative at 37.8 million. In the 1st Semester of 2024, Azores Airlines reached 135.5 million euros in revenue, +22% when compared to the 1st Semester of 2023.
This growth was due to a concerted set of operational and commercial initiatives and investment in new routes. There was not only the consolidation of North American routes but also the success of new routes, such as Ponta Delgada-Milan and Ponta Delgada -Faro, even though the operation only started in June (with a greater impact on the remaining summer months).
In the 1st Semester of 2024, Azores Airlines reached a total of 747 thousand passengers carried, +24% when compared to the 1st Semester of 2023. The increase in traffic was driven by the increase in connectivity within the network, the greater number of routes operated, the inclusion of aircraft greater in the operation of some of the routes mentioned and benefiting from Azores Airlines' greater notoriety in foreign markets and strong passenger demand in North America. Despite the strong boost in revenues, the 1st Semester also recorded an increase in operating costs, in line with several other players in the market
After a 1st Quarter highly marked by irregularities caused mainly by meteorological issues and delays in the delivery of aircraft that were undergoing maintenance, Azores Airlines saw an equally challenging start to the 2nd Quarter, especially due to irregularities caused by unscheduled maintenance events, causing an increase in costs with compensation and irregularities of +868 thousand euros, +44.1%, compared to the same period last year. Excluding the costs mentioned above, external supplies and services increased due to i) fuel expenses, through the joint effect of price increases and increased consumption; ii) expenses with ACMI (aircraft rental, crew, maintenance and insurance), resulting from the start of the scheduled summer operation and the contracting of this type of service to solve flaws in the fleet and guarantee passenger service; and iii) maintenance expenses. Personnel costs also increased due to the increase in operational activity combined with the impacts of the Company's new agreements that came into force on April 1, 2024.
Therefore, similarly to SATA Air Açores, it appears that the increase in Azores Airlines' operating costs was due, on the one hand, to factors related to the company's operational activity (increase in activity, ACMI's, irregularities and maintenance), and, on the other hand, to aspects related to the increase in costs resulting from the international macroeconomic framework in which Azores Airlines operates, making it vulnerable to the evolution of the costs of some supplies and external services that it is difficult to mitigate, namely fuel costs.
In the case of Azores Airlines, there exists a fact that may account for the decrease in profitability observed during the first semester. This fact pertains to the company's significant expansion of its offer on new routes.
Despite the increase in passengers, the company still lacks the maturity to sustain or enhance profitability. This is expected to occur in the upcoming semester. The accumulated operating results for the 1st Semester were negative by 4.9 million. Depreciation and amortization expenses in the 1st Semester of 2024 increased by +4.5 million (+29%), mainly due to the existence of two new aircraft in the fleet, compared to the same period last year. Given this worsening, earnings before interest and taxes (EBIT) totalled negative 24.9 million in the first half of the year. Net results continue to be pressured by high operational and financial expenses, totaling negative 37.8 million in the 1st Semester.
These results come from a first half of the year with many operational restrictions, combined with an increase in operational expenses (FSE’s and personnel expenses) above the increase in revenues. Furthermore, there was also an increase in financial expenses resulting from the need for treasury reinforcements to prepare and scale the IATA 2024 Summer operation.
SATA GESTÃO DE AERÓDROMOS – COMPANY’S REVENUE FOLLOWS TREND OF INCREASED TRAFFIC AT AZOREAN AIRPORTS
o Revenue totaled 2.6 million (+719 thousand when compared to the 1st Semester of 2023). o Operating Profit before interest, taxes, depreciation and amortization (EBITDA) totaled negative 55 thousand. o Net Profit in the 1st Semester of 2024 was positive at 228 thousand.
SATA Gestão de Aeródromos recorded an increase in revenue in line with the increase in traffic at airports in the Autonomous Region of the Azores. Sales and services provided reached a total of 2 million euros in the 1st Semester of 2024, which compares with 1.9 million euros recorded in the 1st Semester of 2023, translating into +6%. It should be noted that, in addition to sales and services provided, an estimated financial balance worth 598 thousand euros was recorded, referring to the period elapsed in the 4th year of operation of the concession contract.
Operating costs, in turn, increased by around 115 thousand, +4%, highlighting the increase in personnel expenses resulting from the impacts of the Company's new agreements. The increase in revenues, greater than the increase in costs, translated into an increase in EBITDA. The recorded EBITDA was negative at 55 thousand, 604 thousand less negative than the result for the same period last year. The Company's net result registered a very positive evolution, having gone from a negative 506 thousand euros to a positive net result of 228 thousand euros.