GOL Announces 2Q22 Investor Update

Rhea-AI Summary

On July 11, 2022, GOL Linhas Aéreas Inteligentes S.A. announced its preliminary expectations for Q2 2022. The company forecasts a Loss Per Share of approximately R$1.80 and an EBITDA margin of about 10%. Passenger revenue is set to rise by 50% year-over-year, reflecting a robust recovery in corporate and leisure travel. However, fuel costs are anticipated to increase by 73%, impacting overall profitability. By the end of June 2022, GOL's Net Debt to EBITDA ratio stood at approximately 10x, and total liquidity is projected at R$3.6 billion.

Positive

• Passenger unit revenue (PRASK) expected to increase ~50% year-over-year, indicating strong recovery in travel demand.
• Total unit revenue (RASK) anticipated to grow ~40% year-over-year.
• Non-fuel unit costs (CASK Ex-Fuel) predicted to decrease ~40%, improving operational efficiency.
• Total liquidity at quarter-end projected to be R$3.6 billion, providing a buffer for operations.

Negative

• Forecasted Loss Per Share of R$1.80 and Loss Per American Depositary Shares of US$0.75, reflecting ongoing challenges.
• Fuel unit costs expected to rise approximately 73% year-over-year, driven by high jet fuel prices, impacting margins.
• Financial leverage at Net Debt/EBITDA ratio of approximately 10x, indicating high debt levels.

SÃO PAULO, July 11, 2022 /PRNewswire/ -- A GOL Linhas Aéreas Inteligentes S.A. (NYSE: GOL e B3: GOLL4) ("GOL" ou "Company"), Brazil's largest airline, today provides an Investor Update on its expectations for the second quarter of 2022. The information below is preliminary and unaudited. The Company will discuss its 2Q22 results in a conference call on July 28, 2022.

Overall Commentary

For 2Q22, GOL expects a Loss Per Share (EPS) and Loss Per American Depositary Shares (EPADS) of approximately R$1.801 and US$0.751, respectively.  EBITDA margin for the quarter is expected to be approximately 10%2.  Passenger unit revenue (PRASK) for the second quarter is expected to be up approximately 50% year over year, driven by the strong recovery in corporate travel on GOL's domestic and regional networks and the return of leisure travel on the Company's international network. Smiles revenues increased by 48% when compared to same period of 2019 with a 25% growth in the customer base versus 2Q19. Total unit revenue (RASK) is expected to be up approximately 40% year over year. Non-fuel unit costs (CASK Ex-Fuel) are expected to decrease approximately 40%2 compared to the second quarter of the prior year, primarily due to the increase in productivity (ASKs, aircraft utilization and operating efficiency) and the appreciation of the Brazilian Real versus the U.S. Dollar. Fuel unit costs (CASK Fuel) are expected to increase approximately 73% year over year, driven by an 80% increase in the average jet fuel price, partially offset by a reduction of approximately 6% in fuel consumption per flight hour due to the higher number of 737-MAXs in the fleet. GOL's financial leverage, as measured by Net Debt3 / EBITDA2,4 ratio was approximately 10x at the end of June 2022 quarter (8.4x in IFRS-16). Total liquidity at quarter-end is expected to be at R$3.6 billion5.

 

Preliminary and Unaudited Projection
				June Quarter 2022
EBITDA Margin2					~10%
EBIT Margin2					~ 0%
Other Revenue				~8% of total revenues
Average fuel price per liter					R$ 6.10
Average Exchange rate					R$ 4.83
				June Quarter 2022 vs. June Quarter 2021
Passenger unit revenue (PRASK)					Up ~50%
CASK Ex-fuel2					Down ~40%
Total Demand - RPK					Up ~100%
Total Capacity - ASK					Up ~125%
Total Capacity - Seats					Up ~130%

1. Excluding gains and losses on currency and Exchangeable Senior Notes.
2. Recurring; excludes non-recurring maintenance costs related to fleet transformation of approximately R$ 270 million.
3. Including 7x annual aircraft lease payments and excluding perpetual bonds.
4. Last twelve months
5. Cash and cash equivalents, restricted cash, accounts receivable and deposits.

Investor Relations
ri@voegol.com.br
www.voegol.com.br/ir
+55(11) 2128-4700

About GOL Linhas Aéreas Inteligentes S.A.

GOL is the largest airline in Brazil, leader in the corporate and leisure segments. Since founded in 2001, the Company has the lowest unit cost in Latin America, thus democratizing air transportation. The Company has alliances with American Airlines and Air FranceKLM, besides several codeshare and interline agreements available to Customers, bringing more convenience and simple connections to any place served by these partnerships. With the purpose of "Being the First for All", GOL offers the best travel experience to its passengers, including: the largest number of seats and more space between seats; the greatest platform with internet, movies and live TV; and the best frequent-flyer program, SMILES. In cargo transportation, GOLLOG delivers orders to different regions in Brazil and abroad. The Company has a team of 14,000 highly qualified aviation professionals focused on Safety, GOL's #1 value, and operates a standardized fleet of 142 Boeing 737 aircraft. The Company's shares are traded on the NYSE (GOL) and the B3 (GOLL4). For further information, visit www.voegol.com.br/ir.

Disclaimer

The information contained in this press release has not been subject to any independent audit or review and contains "forward-looking" statements, estimates and projections that relate to future events, which are, by their nature, subject to significant risks and uncertainties. All statements other than statements of historical fact contained in this press release including, without limitation, those regarding GOL's future financial position and results of operations, strategy, plans, objectives, goals and targets, future developments in the markets in which GOL operates or is seeking to operate, and any statements preceded by, followed by or that include the words "believe", "expect", "aim", "intend", "will", "may", "project", "estimate", "anticipate", "predict", "seek", "should" or similar words or expressions, are forward-looking statements. The future events referred to in these forward-looking statements involve known and unknown risks, uncertainties, contingencies and other factors, many of which are beyond GOL's control, that may cause actual results, performance or events to differ materially from those expressed or implied in these statements. These forward-looking statements are based on numerous assumptions regarding GOL's present and future business strategies and the environment in which GOL will operate in the future and are not a guarantee of future performance. Such forward-looking statements speak only as at the date on which they are made. None of GOL or any of its affiliates, officers, directors, employees and agents undertakes any duty or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law. None of GOL or any of its affiliates, officers, directors, employees, professional advisors and agents make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. Although GOL believes that the estimates and projections in these forward-looking statements are reasonable, they may prove materially incorrect and actual results may materially differ. As a result, you should not rely on these forward-looking statements.

Non-GAAP Measures

To be consistent with industry practice, GOL discloses so-called non-GAAP financial measures which are not recognized under IFRS or U.S. GAAP, including "Net Debt", "Adjusted Net Debt", "total liquidity" and "EBITDA". The Company's management believes that disclosure of non-GAAP measures provides useful information to investors, financial analysts and the public in their review of its operating performance and their comparison of its operating performance to the operating performance of other companies in the same industry and other industries. However, these non-GAAP items do not have standardized meanings and may not be directly comparable to similarly-titled items adopted by other companies. Potential investors should not rely on information not recognized under IFRS as a substitute for the GAAP measures of earnings or liquidity in making an investment decision.

 

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SOURCE GOL Linhas Aéreas Inteligentes S.A.

FAQ

What is GOL's expected EPS for Q2 2022?

GOL expects a Loss Per Share of approximately R$1.80 for Q2 2022.

How did GOL's passenger revenue perform in Q2 2022?

GOL anticipates a 50% year-over-year increase in passenger unit revenue (PRASK) for Q2 2022.

What is the predicted EBITDA margin for GOL in Q2 2022?

The expected EBITDA margin for GOL in Q2 2022 is approximately 10%.

What challenges is GOL facing regarding fuel costs?

GOL forecasts a 73% year-over-year increase in fuel unit costs due to rising jet fuel prices.

What is GOL's financial leverage ratio as of June 2022?

GOL's Net Debt to EBITDA ratio was approximately 10x at the end of June 2022.