GOL Preserves Liquidity and Controls Costs as Customer Demand Begins to Return

Rhea-AI Summary

GOL Linhas Aéreas Inteligentes reported its 2Q20 results, highlighting a 92% decline in Revenue Passenger-Kilometers (RPK) compared to 2Q19, totaling 773 million RPK, despite a 103% increase in RPK from April to June. The company faced an 89% drop in net revenues, totaling R$358 million. GOL's cash position remains strong at R$3.3 billion, aided by effective liquidity management. The airline increased daily flights from 50 to 120 and plans additional capacity growth, aiming to revive operations to around 25% of July 2019 levels.

Positive

• Strong liquidity position with R$3.3 billion in cash and receivables.
• Effective cost control, reducing daily cash expenditures to R$3 million.
• Increase in daily flights from 50 to 120, with further plans to scale operations.

Negative

• 92% decrease in Revenue Passenger-Kilometers (RPK) compared to 2Q19.
• 89% decrease in net revenues, totaling R$358 million.
• Only 13% of flight operations compared to June 2019.

Strong capacity management discipline led to 78% load factor

Daily flights increase from 50 to 120 in the 2Q20

Company maintains strong cash position

SÃO PAULO, July 31, 2020 /PRNewswire/ -- GOL Linhas Aéreas Inteligentes S.A. ("GOL" or "Company") (NYSE: GOL and B3: GOLL4), Brazil's largest domestic airline, today announced consolidated results for the second quarter of 2020 (2Q20) and outlined its continued initiatives in response to the COVID-19 global pandemic.

All information is presented in Brazilian Reals (R$), according to both International Financial Reporting Standards (IFRS) and adjusted metrics and are made available to enable comparability in this quarter of the abrupt drop in demand. Such adjusted metrics exclude expenses related to the portion of the operating fleet that GOL grounded this quarter and are detailed in the table of the "operating expenses" section below. Comparisons are made to the second quarter of 2019 (2Q19), unless otherwise specified.

"Our second quarter results are a reflection of the severe impact that COVID-19 is having on Brazil's economy, the air transportation industry and our Company. To offset the steep decline in revenues, we took several measures to decrease costs and preserve liquidity as we manage through this crisis. We reduced our average daily cash expenditures to R$3 million in 2Q20, while taking all the necessary measures to offer a safe and comfortable flight experience. Customer demand is returning, and we are gradually increasing our capacity as a result," said Paulo Kakinoff, GOL's CEO.

GOL maintained a strong liquidity position, enabled in part by the broad support from many of its stakeholders, ending the quarter with R$3.3 billion in cash and receivables. The Company also amortized R$304 million of principal and R$47 million in interest on debt and leases in the quarter.

Added Kakinoff: "GOL's financial resiliency in this market affirms the value of the work we have been doing to strengthen our balance sheet over the last four years, not just the past four months. The continued dedication of the Company's Employees and the support of our many stakeholders will be critical as we navigate through these unprecedented times and position GOL for continued future growth."

Summary of 2Q20 Results

• The number of Revenue Passenger-Kilometers (RPK) decreased by 92% compared to the same period in 2019, totaling 773 million RPK. However, we saw an increase of 103% in RPK from April to June;
  
  
• Available Seat Kilometers (ASK) grew 104% within the quarter, a decrease of 91% compared to 2Q19. GOL transported 0.6 million Customers across the quarter, a decrease of 92% compared to 2Q19;
  
  
• Net revenues were R$358 million, a decrease of 89% compared to 2Q19. Monthly revenues began with R$104.3 million in April and by the end of June reached R$164.1 million, representing an increase of 57% within 2Q20. Other revenues (primarily cargo and loyalty) totaled R$115 million, a reduction of 37% in relation to 2Q19;
  
  
• The Revenue per Available Seat Kilometer (RASK) was 36.15 cents (R$), an increase of 31%. The Passenger Revenue per Available Seat Kilometer (PRASK) was 24.58 cents (R$), a decrease of 6% compared to 2Q19; and
  
  
• Adjusted EBITDA and adjusted EBIT were R$99 million and R$20 million, respectively, and represent a positive contribution as a result of the Company's rational and responsible management of supply relative to demand.

The second quarter of 2020 reflects the direct impacts of the pandemic on the volume of operations. GOL ended the month of June with a total fleet of 130 B737s, with 27 aircraft operating in its network. Flight operations were 13% of the schedule in June 2019, ramping up to 17% at the end of the month to 120 daily flights with the planned re-opening of seven bases (Juazeiro do Norte, Foz do Iguaçu, Navegantes, Petrolina, Porto Seguro, Ilhéus and Chapecó) and an increase in flights between São Paulo and Rio de Janeiro.

With an increase to approximately 250 daily flights in July, operations are expected to be around 25% of the July 2019 schedule with 36 aircraft operating in the network. GOL plans to re-open a further 14 bases from August to December 2020.

MANAGEMENT VIDEOS WITH PRESENTATION & FULL EARNINGS RELEASE
Access earnings release, management videos, presentation and complete financial statements at: www.voegol.com.br/ri

2Q20 Conference Call: July 31, 2020, 11:00 a.m. (US EDT), Phone: +1 (412) 317-6382, Code: GOL, with webcast (https://webcastlite.mziq.com/cover.html?webcastId=81cc7077-9dd0-4439-b192-e85cb8de7804)

About GOL Linhas Aéreas Inteligentes S.A. (www.voegol.com.br): Brazil's largest airline group with three main businesses: passenger transportation, cargo transportation and coalition loyalty program.

 

View original content:http://www.prnewswire.com/news-releases/gol-preserves-liquidity-and-controls-costs-as-customer-demand-begins-to-return-301103831.html

SOURCE GOL Linhas Aéreas Inteligentes S.A.

FAQ

What was GOL's load factor in 2Q20?

GOL achieved a load factor of 78% in 2Q20.

How did customer demand change for GOL in 2Q20?

Customer demand returned gradually, leading to an increase in daily flights.

What were GOL's net revenues for 2Q20?

GOL reported net revenues of R$358 million in 2Q20.

How has GOL managed its costs during the pandemic?

GOL reduced its average daily cash expenditures to R$3 million to preserve liquidity.

What is GOL's cash position as of 2Q20?

GOL ended the quarter with R$3.3 billion in cash and receivables.