GOL Linhas Aéreas (B3: GOLL4 and NYSE: GOL), today announced its consolidated results for the second quarter of 2023 (2Q23). This second quarter, the weakest seasonally of the year, confirmed the continuous improvement in operational efficiency and productivity, as well as positioned the Company to obtain even better results with the growth in air travel.
Celso Ferrer, CEO, commented: “Thanks to the unrivaled work of our Team of Eagles, we are delivering solid operational performance and continually providing our Customers with a great product with the best service in the industry. During this winter period, we expanded our offering to around 91% of pre-pandemic capacity and achieved record revenue in Q2. In addition, we maintained our disciplined approach to costs to further drive productivity and achieved unit revenue (PRASK) of 36,18 cents (R$), an increase of 8,9% year-on-year, focusing on our strategies revenue management. We continue to prioritize reliability, profitability and strengthening our balance sheet.”
All information in this release is presented in Reais (R$), in accordance with international ing standards (IFRS) and with adjusted metrics, made available to enable comparison of this quarter with the same period of the previous year (2Q22). Adjusted (recurring) indicators exclude non-recurring expenses related to the quarter's results, and are detailed in the respective tables.
Summary of Results for the Second Quarter of 2023 (vs. 2Q22)
- The number of Paid enger Kilometers Carried (RPK) increased by 13,4%, while total Seat Kilometers Provided (ASK) grew by 14,0%;
- Net Revenue increased 27,9% to R$4,1 billion, reaching a record for a second quarter. Auxiliary Revenues, especially from the Smiles and Gollog business units, grew 72,7% to R$425,6 million;
- The average occupancy rate (load factor) was stable at 76,9%. The domestic load factor was 77,3%, an increase of 0,7 pp, while the international load factor was 73,1%;
- Aircraft utilization was 10,8 hours per day, 6% higher than the 10,2 hours in 2Q22;
- The number of engers transported by the Company was 7 million, an increase of 19,9%;
- Net Revenue per Seat Kilometer Offered (RASK) grew 12,2% to 40,3 cents (R$);
- O yield average per enger grew 9,5%, a record 47,1 cents (R$) for a second quarter;
- Adjusted Cost per Seat Kilometer decreased by 8,4% to 34,89 cents (R$). The CASK Fuel decreased 17,8% to 13,20 cents (R$), due to the 22,2% reduction in aviation kerosene (QAV) prices. Adjusted CASK ex-Fuel decreased by 1,5% to 21,69 cents (R$) in the period;
- EBITDA was R$947,3 million with a margin of 22,8%, while EBIT was R$537,2 million with a margin of 13,0%;
- Net loss was R$415,7 million excluding FX variation income of R$0.9 billion;
- Operating cash generation was R$0,7 billion due to higher operating volumes and working capital initiatives;
- Total liquidity (cash and cash equivalents, financial investments, deposits and s receivable) reached R$4,1 billion on 30/06/2023, a reduction of 8,4% compared to 31/03/2023; It is
- Net debt ratio (including 7x annual lease payments and excluding perpetual bond) to recurring EBITDA UDM was 6,7x at 30/06/2023 (5,0x in IFRS16 and 3,5x excluding SSN 2028), a 0,9x decrease compared to leverage on 31/03/2023.
Management Comments
In this quarter, GOL obtained a 14% increase in its offer (ASK) compared to 2022, equivalent to approximately 91% of the offer in 2Q19. Combined with better productivity ratios and a larger portfolio of ancillary revenues, the Company recorded an EBITDA margin of 22,8%, particularly relevant considering that the 2Q is seasonally the weakest of the year.
“We remain committed to maintaining the lowest unit costs in the industry. The utilization of our operational fleet remained high, reaching approximately 11 hours a day, an increase of 5,9% compared to 2Q22. As capacity increases and the entire fleet returns to operations, we hope that, with our low-cost discipline and the commitment of our Team of Eagles to delivering the best customer satisfaction, we will further strengthen GOL's competitive advantage in the market.” , added Celso Ferrer.
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New Revenue and Sales Level Confirmed
The Company's net revenue in 2Q23 increased 28% compared to the previous year, to R$ 4,1 billion, the highest revenue in 2Q in its history, with important advances in the Smiles and Gollog business units. This strong revenue performance was driven by continued strength in broad-based demand. The Company also reached approximately R$5,1 billion in sales volume, mainly driven by the leisure traveler.
Several initiatives contributed to a significant 12,2% increase in RASK (revenue per available seat kilometer) and a 9,5% increase in yield compared to 2Q22.
“Our discipline in yield management has enabled us to achieve continued unit revenue growth. These results were made possible by our capacity discipline and inventory management, as well as our continued investments in tools and technologies for rate and inventory management. Our digital channels ensured an improved experience for our Customers and facilitated the sale of additional services that added even more value to the trip”, says Eduardo Bernardes, Commercial Vice-President.
Cost Performance and Capacity Management
GOL continues its process of resuming supply, based on sustainable growth and diversification with the opening of new bases, focusing on the regional market. The Company's occupancy rate increased to 76,9%, 0,3 percentage points above 2Q22.
GOL expanded its offer (ASKs) by 14,0% compared to 2Q22, reaching around 91% of its capacity in 2Q19 and exceeding 100% on selected dates. Compared to 1Q23, the seasonally stronger quarter, ASK decreased by approximately 8%. Aircraft utilization reached 10,8 hours a day, confirming the Company's focus on improving its productivity indicators, and further ing the reduction of its unit cost. In the international market, the Company continued to increase its offer at a stronger pace (73,1% versus 2Q22), reaching around 63% of its capacity in 2Q19.
The number of departures increased approximately 20% compared to 2Q22, mainly due to the redesign of the network and the opening of regional markets. The cities of Ribeirão Preto and São José do Rio Preto, in São Paulo, which started to receive GOL's Boeing 737s, connecting Customers to several national destinations such as Rio de Janeiro, Salvador, Curitiba and Brasília.
The unit cost (CASK) excluding the cargo fleet reached 34,89 cents (R$), around 3% below the previous quarter, even with an offer in ASK lower by 8%. The reduction in the cost of aviation kerosene in the period helped to reduce the unit cost in the quarter. The unit cost excluding fuel (CASK Ex-Comb) and excluding the cargo fleet reached 21,69 cents (R$), around 1,5% lower than 2Q22 and 7,2% higher than 1Q23, even with a reduction of 8 % in supply in the same period.
Smiles and Gollog Continue to Leverage Value
Smiles Viagens, our new tour operator, was launched this quarter. Resulting from the synergy between GOL and Smiles, it allows the offer of complete packages for the B2C market with a unique online sales experience, both for domestic and international destinations. Later this year, it will also start to serve the B2B market, and will expand its reach to travel agents and other distribution channels, in addition to strengthening partnerships with agencies, hotels and the entire tourism chain.
In 2Q23, the Company maintained the high growth pace of its cargo and loyalty businesses, both in billing and revenue. Revenue from these combined businesses was R$1,4 billion, while GOL's ancillary revenue grew 72,7% in the same period.
Gollog more than doubled its quarterly gross revenue to R$247 million year-over-year. During 2Q23, the Company added a Boeing 737 cargo aircraft to its fleet, bringing the total to four, as part of the exclusivity agreement with Mercado Livre for the transport of cargo. The total cargo aircraft is expected to reach six by the end of the year, with the potential to expand to 12 cargo aircraft in the future.
Smiles, the largest loyalty program in the country, achieved revenue growth of 21,6% compared to 2Q22, reaching levels above R$1,2 billion. Smiles achieved a 10% growth in the base of ed and has around eight million more than its nearest competitor.
“Since the reincorporation of Smiles, business synergies continue to be captured at an accelerated pace. In less than two years, Smiles practically doubled its revenue compared to the pre-pandemic period. Now, with Smiles Viagens in operation, we see additional revenue potential to contribute even more to the evolution of our ancillary revenues and to the strengthening of GOL as a whole,” says Carla Fonseca, Customer Experience Director and President of Smiles.
Customer Loyalty and Experience
Smiles expanded its customer base by more than 8% to 21,8 million compared to 2Q22, demonstrating the high value being extracted from combining the loyalty business with the operating airline in 2021.
The Company focused on several important initiatives and investments, including expanding its network and entering new regional markets, improving its digital channels and the continuous evolution of its cargo (Gollog) and loyalty (Smiles) businesses.
GOL was recognized as the Best Airline in South America (APEX enger Choice Award 2023), which demonstrates the dedication and effort of Team das Águias in exceeding enger expectations. It also reflects the Company's ongoing commitment to Be First for All, offering exceptional flight-quality services and a unique customer experience. Through its dedication to offering safe, comfortable and efficient flights, GOL remains a leader in the sector, establishing a standard of excellence that elevates the aviation industry in the region.
Fleet Initiatives Update
During 2Q23, as part of the fleet transformation plan, the Company returned two Boeing 737-NG aircraft, which reduced fleet idleness, and received a new Boeing 737-NG cargo aircraft. As of June 30, 2023, GOL had a fleet of 143 Boeing 737 aircraft, including 38 MAXs, 101 NGs and four 800BCFs.
“GOL is a pioneer in the renegotiation of liabilities. In December 2022, the Company successfully launched a guaranteed debt to address liabilities with our lessors, expanded further with two other retaps in 2023. GOL also recently completed a major debt restructuring move, led by the Abra Group, where the US $1,1 billion in face value of capital markets debt was repurchased. The current restructuring of our lease agreements is expected to allow for a long-term increase in free cash flow while honoring our commitments and partnerships,” concluded Mario Liao, Chief Financial Officer.
ESG Developments
#MeuVooCompensa is an important and innovative step in voluntary carbon neutralization by Customers. GOL offers carbon offsets when purchasing tickets through the Company's website and, since the beginning of the partnership with MOSS in 2Q21, more than 14 thousand tons of CO2 already been compensated, equivalent to more than 3.600 hectares of preserved forests.
In May, ANAC authorized GOL to use Digital Navigation on board aircraft, which will further contribute to current initiatives to save paper and fuel. Since the beginning of the Project paperless, in 2018, the Company estimates that it has already saved 41,5 million sheets of paper and 48,9 million liters of jet fuel.
GOL created affinity groups to intensify and broaden the debate on diversity and inclusion, in addition to intensifying the training program for the entire Team of Eagles.
The Company started a Demographic Census to get to know its Employees better and strengthen the values of the Team of Eagles with GOL's culture of being simple, human and intelligent.
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