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Yes ______ No ___X___
Operating Income for the second quarter doubled, reaching R$43 million
São Paulo, August 2, 2018 - GOL Linhas Aéreas Inteligentes S.A. (“GOL” or “Company”), (NYSE: GOL and B3: GOLL4), Brazil's #1 airline, announces its consolidated results for the second quarter of 2018 (2Q18) and for the six months of 2018 (1H18). All information is presented in accordance with IFRS, in Brazilian Reais (R$) and all comparisons are with the second quarter of 2017 (2Q17) and for the six months of 2017 (1H17), unless otherwise stated.
Summary
Significantly improved operating indicators: RPKs increased by 2.5% to 8.3 billion in 2Q18, mainly due to a 4.1% increase in the number of transported passengers. As a result of strong passenger demand and GOL’s continued focus on revenue management, the Company was able to achieve (i) an average yield per passenger of 25.74 cents (R$), an increase of 7.6% compared to 2Q17, (ii) an average load factor 78.1%, an increase of 0.2 p.p. compared to 2Q17, and (iii) on-time performance of 93.6% in 2Q18 according to Infraero.
Strong revenue growth: the combination of higher demand and optimized pricing resulted in net revenue for the quarter of R$2.4 billion, an increase of 9.0% compared to 2Q17. Net RASK was 22.05 cents (R$) in 2Q18, an increase of 6.7% over 2Q17. Net PRASK increased 8.0% over 2Q17, reaching 20.11 cents (R$). Average fare increased by 6.0% from R$268 to R$284. GOL’s 2018 net revenue guidance is approximately R$11.5 billion.
Controlled cost environment: due to higher jet fuel prices, total CASK in 2Q18 increased 5.9% to 21.66 cents (R$) relative to 2Q17. On an ex-fuel basis, CASK fell by 1.4%. GOL remains the cost leader in South America for the 17th consecutive year.
Continued margin expansion: While the average price of jet fuel increased by 12.6% in 2Q18 over 1Q18, the combination of stronger pricing, higher demand, and R$36 million of operating results in hedging, permitted GOL’s EBIT margin to expand to 1.8% in 2Q18, the highest second quarter indicator since 2010 and a 0.8 p.p. improvement over 2Q17. Operating income (EBIT) in 2Q18 was R$42.8 million, an increase of 92.7% compared to 2Q17 (R$22.2 million). EBITDA margin was 8.8% in 2Q18, a growth of 2.3 p.p. q-o-q. EBITDAR margin was 20.3% in 2Q18, an increase of 2.6 p.p. q-o-q over 2Q17. GOL’s 2018 EBIT margin guidance is approximately 11%.
Balance sheet strengthening: While the Real depreciated 16.0% against the U.S. dollar in 2Q18 (end of period) causing a net exchange and monetary variation loss of R$1.0 billion, net debt (excluding perpetual bonds) to LTM EBITDA was 2.9x as of June 30, 2018, up versus March 31, 2018 (2.5x) and improving versus a year-ago metrics (4.2x). In 2Q18, the Company redeemed its Senior Notes due 2023 for R$80.7 million. Total liquidity, including cash, financial investments, restricted cash and accounts receivable, totaled R$3.0 billion, flat in comparison to March 31, 2018 and an increase by R$1.3 billion versus a year ago. The combination of GOL’s operational cash flow generation of R$588.7 million in the quarter and improved cash liquidity increased the Company’s financial flexibility.
GOL’s 2018 and 2019 guidance is on page 14 of this document.
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“We worked hard to achieve our results this second quarter. In 2018, the traditional low season in Brazilian air travel was particularly challenging due to accelerated appreciation of the US Dollar against the Real, and industry-wide supply disruption that affected demand for air travel. Our commitment to continuous improvement in our results has proven that our strategy of offering a differentiated, high quality product while relentlessly focusing on cost efficiency is bearing fruit. We remain focused on offering the best experience in air transportation, providing on-time, exclusive services to our clients on new, modern aircraft that connect our main markets with the most convenient schedules”, commented Paulo Kakinoff, CEO.
In May, the GOL team successfully navigated through the industry-wide disruption caused by an extensive national strike of truck drivers. From May 21 to 31, trucks stopped and blocked the roadways, and supplies of fuel were not delivered to distribution points. As a result of the efforts of GOL’s team and its flight network strategy and single fleet type, the Company operated 99.8% of the schedule flights.
In June, GOL took delivery of its first 737 MAX 8 aircraft. The MAX 8 will permit the Company to serve Brazil’s large addressable market of passengers traveling between Midwest/Northeast Brazil and the State of Florida. In 4Q18 GOL will begin nonstop flights from Brasilia and Fortaleza to the Miami and Orlando international airports. The Brasilia to Orlando flight will be the world’s longest regular flight ever made with a 737 at approximately 6,079 kilometers. Also in June, GOL announced the launch of its 14th international destination: Quito, Ecuador. Three weekly nonstop flights from the Guarulhos International Airport to the Mariscal Sucre International are planned for December 2018. “We will be the only airline to operate nonstop and connection-free flights between Brazil and Ecuador. Our new Boeing 737 MAX 8 aircraft, with next-gen technology, will offer customers all the convenience and comfort of GOL's flights, including in-flight internet and entertainment, eco-leather seats with ample leg room, and free on-board drinks and meals”, concluded Kakinoff.
In July, GOL signed a new agreement to purchase another 15 737-MAX 8 aircraft, increasing the total order to 135 aircraft and converting 30 MAX 8 orders to MAX 10. The 737 MAX 10 will make it possible for GOL to comfortably add until 36 additional seats, up to until 222 passengers. The additional capacity will lead to a greater flexibility and further competitive advantage in cost, given that the MAX 10 will have a lower cost per seat when compared will all other aircraft available in the market with a single hallway. The Company plans to fly the MAX 10 beginning in 2022.
GOL continues its leadership as the lowest operating cost airline in the region for the 17th consecutive year. Its simplified, standardized fleet coupled with the Company’s lean and productive operations, provides GOL with a significant and sustainable competitive advantage over its peers. In 2Q18, aircraft utilization was 11.2 block hours per day, and our load factor increased by 0.2 p.p., reaching 78.1%. “Our operating efficiency and cost advantage support our competitive position as the #1 airline in Brazil,” said Richard Lark, CFO. “We continue to reduce our cost of financing and improve our liquidity and leverage profile. Net cash flow was positive by R$158.2 million for the quarter. As of June 30, 2018, our net debt (ex-perpetual bonds) to LTM EBITDA ratio was 2.9x, and our total liquidity was of R$3.0 billion,” Lark concluded.
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Traffic data – GOL (in millions) |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
RPK GOL – Total |
8,337 |
8,135 |
2.5% |
18,326 |
17,697 |
3.6% |
RPK GOL – Domestic |
7,611 |
7,302 |
4.2% |
16,306 |
15,809 |
3.1% |
RPK GOL – International |
726 |
833 |
-12.9% |
2,020 |
1,888 |
7.0% |
ASK GOL – Total |
10,673 |
10,447 |
2.2% |
23,094 |
22,466 |
2.8% |
ASK GOL – Domestic |
9,618 |
9,324 |
3.2% |
20,398 |
20,014 |
1.9% |
ASK GOL – International |
1,054 |
1,123 |
-6.1% |
2,695 |
2,452 |
9.9% |
GOL Load Factor – Total |
78.1% |
77.9% |
0.2 p.p. |
79.4% |
78.8% |
0.6 p.p. |
GOL Load Factor – Domestic |
79.1% |
78.3% |
0.8 p.p. |
79.9% |
79.0% |
0.9 p.p. |
GOL Load Factor – International |
68.8% |
74.2% |
-5.3 p.p. |
75.0% |
77.0% |
-2.0 p.p. |
Operating data |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
Average Fare (R$) |
284 |
268 |
6.0% |
311 |
283 |
9.8% |
Revenue Passengers - Pax on board ('000) |
7,559 |
7,261 |
4.1% |
15,920 |
15,471 |
2.9% |
Aircraft Utilization (block hours/day) |
11.2 |
11.3 |
-0.7% |
12.0 |
11.8 |
2.2% |
Departures |
58,247 |
57,883 |
0.6% |
122,696 |
121,983 |
0.6% |
Total Seats (‘000) |
9,912 |
9,680 |
2.4% |
20,712 |
20,414 |
1.5% |
Average Stage Length (km) |
1,045 |
1,061 |
-1.5% |
1,097 |
1,082 |
1.3% |
Fuel Consumption (mm liters) |
315 |
311 |
1.4% |
679 |
664 |
2.3% |
Full-time Employees (at period end) |
15,232 |
15,360 |
-0.8% |
15,232 |
15,360 |
-0.8% |
Average Operating Fleet5 |
108 |
106 |
2.4% |
109 |
108 |
0.3% |
On-time Departures |
93.6% |
96.0% |
-2.4 p.p. |
93.9% |
95.3% |
-1.4 p.p. |
Flight Completion |
98.7% |
98.1% |
0.6 p.p. |
98.3% |
98.4% |
-0.1 p.p. |
Passenger Complaints (per 1000 pax) |
2.00 |
1.35 |
47.7% |
2.09 |
1.39 |
50.3% |
Lost Baggage (per 1000 pax) |
1.84 |
2.04 |
-9.9% |
1.94 |
2.11 |
-7.7% |
Financial data |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
Net YIELD (R$ cents) |
25.74 |
23.92 |
7.6% |
26.98 |
24.72 |
9.1% |
Net PRASK (R$ cents) |
20.11 |
18.63 |
8.0% |
21.41 |
19.47 |
10.0% |
Net RASK (R$ cents) |
22.05 |
20.67 |
6.7% |
23.03 |
21.15 |
8.9% |
CASK (R$ cents) |
21.66 |
20.46 |
5.9% |
20.66 |
19.91 |
3.7% |
CASK ex-fuel (R$ cents) |
14.23 |
14.43 |
-1.4% |
13.40 |
13.84 |
-3.2% |
CASK ex-fuel4 (R$ cents) |
15.12 |
14.43 |
4.8% |
14.16 |
13.84 |
2.4% |
Breakeven Load Factor |
76.7% |
77.1% |
-0.4 p.p. |
71.2% |
74.2% |
-3.0 p.p. |
Average Exchange Rate 1 |
3.6056 |
3.2174 |
12.1% |
3.4274 |
3.2174 |
6.5% |
End of period Exchange Rate 1 |
3.8558 |
3.3082 |
16.6% |
3.8558 |
3.3082 |
16.6% |
WTI (avg. per barrel. US$) 2 |
67.91 |
48.15 |
41.0% |
65.46 |
49.95 |
31.1% |
Price per liter Fuel (R$) 3 |
2.73 |
2.08 |
31.4% |
2.62 |
2.11 |
23.9% |
Gulf Coast Jet Fuel (avg. per liter. US$)2 |
0.55 |
0.37 |
49.2% |
0.53 |
0.30 |
75.3% |
1. Source: Brazilian Central Bank; 2. Source: Bloomberg; 3. Fuel expenses excluding hedge results/liters consumed; 4. Excluding results of sale and sale-leaseback transactions; 5. Average operating fleet excluding aircraft in sub-leasing and MRO. *2Q17 and 1H17 results have been restated based on IFRS 15. Certain calculations may not match with the information in the quarterly financials due to rounding.
GOL’s domestic supply increased by 3.2% and demand increased by 4.2% in 2Q18. As a result, the Company’s domestic load factor reached 79.1%, an increase of 0.8 p.p. when compared to 2Q17. GOL transported 7.2 million domestic passengers in the quarter, an increase of 3.9% when compared with the same period in 2017. The Company is the leader in transported passengers in Brazil’s domestic aviation market.
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International market - GOL
GOL’s international supply decreased by 6.1% and international demand decreased 12.9% in 2Q18 compared to 2Q17. The Company’s international load factor in 2Q18 was 68.8%, decreasing 5.3 p.p. over 2Q17. During the quarter, GOL transported 0.3 million passengers in the international market, a decrease of 16.0% when compared to the second quarter of 2017.
Volume of Departures and Total seats - GOL
The total volume of GOL departures was 58,247, an increase of 0.6% in 2Q18 over 2Q17. The total number of seats available to the market was 9.9 million in the second quarter of 2018, an increase of 2.4% over the same period in 2017.
PRASK, Yield and RASK
Net PRASK increased by 8.0% in the quarter when compared to 2Q17, reaching 20.11 cents (R$), driven by a growth in net passenger revenue of 10.3% in the quarter. GOL’s Net RASK was 22.05 cents in (R$) 2Q18, an increase of 6.7% over 2Q17. Net yieldincreased by 7.6 % in 2Q18 over 2Q17, reaching 25.74 cents (R$), driven by a 6.0% increase in GOL’s average fare.
For reference, below is a comparison of passenger and ancillary (cargo and other) revenue for the quarterly periods in 2017 and 2018 in accordance with IFRS15.
Net Operating Revenue/ASK (R$ cents) |
|
1Q |
2Q |
3Q |
4Q |
Passenger |
2018 |
22.53 |
20.11 |
- |
- |
2017 |
20.21 |
18.63 |
20.66 |
22.17 | |
Cargo and Other |
2018 |
1.33 |
1.95 |
- |
- |
2017 |
1.35 |
2.04 |
1.57 |
1.63 |
*Values for 3Q17 and 4Q17 were not reviewed by the independent auditors.
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Income statement in IFRS (R$ MM)
Income statement (R$ MM)* |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. | ||||
Net operating revenues |
2,353.8 |
2,159.4 |
9.0% |
5,318.1 |
4,751.4 |
11.9% | ||||
Passenger |
2,146.2 |
1,945.8 |
10.3% |
4,945.1 |
4,375.1 |
13.0% | ||||
Cargo and Other |
207.6 |
213.6 |
-2.8% |
373.0 |
376.4 |
-0.9% | ||||
Operating Costs and Expenses |
(2,311.2) |
(2,137.1) |
8.1% |
(4,771.2) |
(4,473.9) |
6.6% | ||||
Salaries, wages and benefits |
(410.7) |
(381.7) |
7.6% |
(894.3) |
(795.7) |
12.4% | ||||
Salaries, wages and benefits - Operations |
(311.9) |
(298.2) |
4.6% |
(652.4) |
(610.0) |
6.9% | ||||
Salaries, wages and benefits – Other |
(98.8) |
(83.5) |
18.3% |
(242.0) |
(185.7) |
30.3% | ||||
Aircraft fuel |
(792.7) |
(629.7) |
25.9% |
(1,676.9) |
(1,365.5) |
22.8% | ||||
Taxes on aircraft fuel |
(124.3) |
(99.8) |
24.6% |
(258.4) |
(220.7) |
17.1% | ||||
Aircraft Fuel (ex-taxes) |
(679.9) |
(529.9) |
28.3% |
(1,430.0) |
(1,144.8) |
24.9% | ||||
Aircraft rent |
(268.9) |
(241.9) |
11.2% |
(504.4) |
(483.4) |
4.3% | ||||
Sales and marketing |
(152.7) |
(124.4) |
22.7% |
(280.0) |
(242.0) |
15.7% | ||||
Landing fees |
(168.1) |
(144.7) |
16.2% |
(355.6) |
(319.5) |
11.3% | ||||
Passenger costs |
(103.9) |
(98.4) |
5.6% |
(223.6) |
(215.6) |
3.7% | ||||
Services Provided |
(144.3) |
(137.9) |
4.7% |
(274.5) |
(275.8) |
-0.5% | ||||
Maintenance materials and repairs |
(88.8) |
(132.2) |
-32.8% |
(199.1) |
(220.4) |
-9.7% | ||||
Depreciation and amortization |
(165.1) |
(119.0) |
38.8% |
(315.6) |
(225.6) |
39.9% | ||||
Other |
(16.1) |
(127.3) |
-87.4% |
(47.1) |
(330.4) |
-85.7% | ||||
Equity Income |
0.2 |
0.0 |
NM |
0.2 |
0.1 |
18.3% | ||||
Operating Result (EBIT) |
42.8 |
22.2 |
92.7% |
547.1 |
277.6 |
97.1% | ||||
EBIT Margin |
1.8% |
1.0% |
0.8 p.p |
10.3% |
5.8% |
4.5 p.p | ||||
Financial Results |
(1,261.2) |
(425.3) |
196.6% |
(1,479.1) |
(524.9) |
181.8% | ||||
Interest on loans |
(173.6) |
(165.4) |
4.9% |
(338.7) |
(405.6) |
-16.5% | ||||
Gains from financial investments |
21.6 |
19.7 |
9.4% |
82.9 |
48.9 |
69,6% | ||||
Exchange and monetary variations |
(1,043.4) |
(225.7) |
NM |
1,063.0 |
(82.1) |
NM | ||||
Derivatives net results |
(6.2) |
(12.3) |
-49.4% |
(6.7) |
(24.0) |
-72.0% | ||||
Other expenses (revenues) net |
(59.6) |
(41.6) |
43.4% |
(153.7) |
(62.1) |
147.3% | ||||
Income (Loss) before income taxes |
(1,218.4) |
(403.1) |
202.3% |
(932.0) |
(247.3) |
276.9% | ||||
Pre-tax Income Margin |
-51.8% |
-18.7% |
-33.1 p.p |
-17.5% |
-5.2% |
-12.3 p.p | ||||
Income Tax |
(53.5) |
(6.4) |
NM |
(119.1) |
72.6 |
NM | ||||
Current income tax |
(42.2) |
(69.3) |
-39.1% |
(91.5) |
(154.4) |
-40.7% | ||||
Deferred income tax |
(11.3) |
62.8 |
NM |
(27.6) |
227.0 |
NM | ||||
Net income (loss) |
(1,272.0) |
(409.5) |
210.6% |
(1,051.1) |
(174.6) |
NM | ||||
Net Margin |
-54.0% |
-19.0% |
-35.0 p.p |
-19.8% |
-3.7% |
-16.1 p.p | ||||
Minority Interest |
54.0 |
68.2 |
-20.8% |
127.4 |
140.5 |
-9.3% | ||||
Net income (loss) after minority interest |
(1,326.0) |
(477.7) |
177.6% |
(1,178.5) |
(315.1) |
274.0% | ||||
Net Margin after minority interest |
-56.3% |
-22.1% |
-34.2 p.p |
-22.2% |
-6.6% |
-15.6 p.p | ||||
Earnings per Share (EPS) after minority interest R$ |
(3.80) |
(1.37) |
176.6% |
(3.38) |
(0.91) |
272.6% | ||||
Weighted average shares outstanding MM |
348.7 |
347.5 |
0.4% |
348.7 |
347.5 |
0.4% | ||||
Earnings per ADS Equivalent in US$ |
(2.11) |
(0.85) |
146.8% |
(1.97) |
(0.56) |
249.8% | ||||
Weighted average ADSs outstanding MM |
174.4 |
173.7 |
0.4% |
174.4 |
173.7 |
0.4% | ||||
*2Q17 and 1H17 results have been restated based on IFRS 15. Certain calculations may not match with the information in the quarterly financials due to rounding.
Net revenue
Net revenue in 2Q18 was R$2.4 billion, an increase of 9.0% when compared to 2Q17, with RPKs increasing by 2.5%, to 8,337 billion in 2Q18. Cargo revenues, loyalty program revenues and other ancillary revenues represented R$207.6 million in 2Q18, a 2.8% decrease compared to 2Q17, mainly due to an 8.9% decrease in the Smiles loyalty program revenues, partially offset by a 17.6% increase of cargo revenues versus the year-ago quarter.
GOL’s load factor increased by 0.2 p.p. to 78.1% in the quarter, as demand growth outstripped the increase in ASKs. Average fares increased by 6.0%, from R$268 to R$284, driving a 7.6% increase in yield. In 1H18, average fares reached R$311, a 9.8% increase y-o-y.
5 |
|
Total CASK grew by 5.9% compared to 2Q17, from 20.46 cents (R$) to 21.66 cents (R$), mainly due to a 31.4% increase in the price per liter of jet fuel and 12.1% depreciation of Real against the US Dollar. CASK ex-fuel decreased 1.4% y-o-y, supported by high fleet productivity and operational results from sale of aircraft, partially offset by an increase in sales and marketing costs, and higher depreciation driven by capitalized maintenance on aircraft components (including engines).
GOL’s breakeven load factor decreased by 0.4 p.p., reaching 76.7% vs. 77.1% in 2Q17, primarily due to yield growth of 7.6% in the quarter. The breakdown of the Company’s operating costs and expenses is as follows:
Operating expenses (R$ MM)* |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
Salaries, wages and benefits |
(410.7) |
(381.7) |
7.6% |
(894.3) |
(795.7) |
12.4% |
Salaries, wages and benefits - Operations |
(311.9) |
(298.2) |
4.6% |
(652.4) |
(610.0) |
6.9% |
Salaries, wages and benefits - Other |
(98.8) |
(83.5) |
18.3% |
(242.0) |
(185.7) |
30.3% |
Aircraft fuel |
(792.7) |
(629.7) |
25.9% |
(1,676.9) |
(1,365.5) |
22.8% |
Taxes on aircraft fuel |
(124.3) |
(99.8) |
24.6% |
(258.4) |
(220.7) |
17.1% |
Aircraft Fuel (ex-taxes) |
(679.9) |
(529.9) |
28.3% |
(1,430.0) |
(1,144.8) |
24.9% |
Aircraft rent |
(268.9) |
(241.9) |
11.2% |
(504.4) |
(483.4) |
4.3% |
Sales and marketing |
(152.7) |
(124.4) |
22.7% |
(280.0) |
(242.0) |
15.7% |
Landing fees |
(168.1) |
(144.7) |
16.2% |
(355.6) |
(319.5) |
11.3% |
Passenger costs |
(103.9) |
(98.4) |
5.6% |
(223.6) |
(215.6) |
3.7% |
Services |
(144.3) |
(137.9) |
4.7% |
(274.5) |
(275.8) |
-0.5% |
Maintenance, materials and repairs |
(88.8) |
(132.2) |
-32.8% |
(199.1) |
(220.4) |
-9.7% |
Depreciation and Amortization |
(165.1) |
(119.0) |
38.8% |
(315.6) |
(225.6) |
39.9% |
Other operating expenses |
(16.1) |
(127.3) |
-87.4% |
(47.1) |
(330.4) |
-85.7% |
Total operating expenses |
(2,311.2) |
(2.137.1) |
8.1% |
(4,771.2) |
(4,473.9) |
6.6% |
Operating expenses ex- fuel |
(1,518.5) |
(1.507.4) |
0.7% |
(3,094.2) |
(3,108.4) |
-0.5% |
Operating expenses per ASK (R$ cents) |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
Salaries, wages and benefits |
(3.85) |
(3.65) |
5.3% |
(3.87) |
(3.54) |
9.3% |
Salaries, wages and benefits - Operations |
(2.92) |
(2.85) |
2.4% |
(2.82) |
(2.72) |
4.0% |
Salaries, wages and benefits - Other |
(0.93) |
(0.80) |
15.8% |
(1.05) |
(0.83) |
26.8% |
Aircraft fuel |
(7.43) |
(6.03) |
23.2% |
(7.26) |
(6.08) |
19.5% |
Taxes on aircraft fuel |
(1.16) |
(0.96) |
21.9% |
(1.12) |
(0.98) |
13.9% |
Aircraft Fuel (ex-taxes) |
(6.37) |
(5.07) |
25.6% |
(6.19) |
(5.10) |
21.5% |
Aircraft rent |
(2.52) |
(2.32) |
8.8% |
(2.18) |
(2.15) |
1.5% |
Sales and marketing |
(1.43) |
(1.19) |
20.1% |
(1.21) |
(1.08) |
12.6% |
Landing fees |
(1.58) |
(1.39) |
13.7% |
(1.54) |
(1.42) |
8.3% |
Passenger costs |
(0.97) |
(0.94) |
3.3% |
(0.97) |
(0.96) |
0.9% |
Services |
(1.35) |
(1.32) |
2.5% |
(1.19) |
(1.23) |
-3.2% |
Maintenance, materials and repairs |
(0.83) |
(1.26) |
-34.2% |
(0.86) |
(0.98) |
-12.1% |
Depreciation and amortization |
(1.55) |
(1.14) |
35.8% |
(1.37) |
(1.00) |
36.1% |
Other operating expenses |
(0.15) |
(1.22) |
-87.6% |
(0.20) |
(1.47) |
-86.1% |
CASK |
(21.66) |
(20.46) |
5.9% |
(20.66) |
(19.91) |
3.7% |
CASK excluding fuel expenses |
(14.23) |
(14.43) |
-1.4% |
(13.40) |
(13.84) |
-3.2% |
*2Q17 and 1H17 results have been restated based on IFRS 15. Certain calculations may not match with the information in the quarterly financials due to rounding.
Aircraft fuel costs per ASK increased by 23.2% compared to 2Q17 to 7.43 cents (R$), mainly due to a 31.4% increase in the price of the liter of fuel, as a result of the 49% increase in international jet fuel prices.
Salaries, wages and benefits per ASK increased by 5.3% to 3.85 cents (R$) over 2Q17, mainly due provisions for labor contingencies and annual cost of living adjustments.
Aircraft rent per ASK increased by 8.8% in relation to 2Q17, to 2.52 cents (R$), mainly due to the 12.1% depreciation of the Real against the US Dollar.
6 |
|
Sales and marketing per ASKincreased 20.1% in relation to 2Q17, to 1.43 cent (R$), impacted by incentives directly associated with increased revenues and higher advertising costs in the period.
Landing fees per ASK increased by 13.7% compared to 2Q17 to 1.58 cent (R$), due to higher landing fees, navigation fees and airport parking fees.
Passenger costs per ASK increased 3.3% in relation to 2Q17, to 0.97 cent (R$), due to the increase in ramp costs due to the greater number of take-offs in the period, and related to reimbursement of tickets, accommodation and flights cancellations.
Services per ASK costs increased by 2.5% in relation to 2Q17, to 1.35 cent (R$), mainly due to higher contracted freight services, parcels and aircraft components, increased purchases of products and tickets from partnership companies to be redeemed in our Smiles loyalty program.
Maintenance materials and repairs per ASK decreased by 34.2% in relation to 2Q17, to 0.83 cent (R$), due to fewer checks for aircraft returns, partially offset by higher capitalization of rotable and components (including engines) repairs.
Depreciation and amortization per ASK increased 35.8% in relation to 2Q17, to 1.55 cent (R$), due to the higher capitalized maintenance on key aircraft components (including engines), which consequently, increased depreciation.
Other expenses per ASK decreased 87.6% to 0.15 cent (R$) in 2Q18 compared to 1.22 cent (R$) in 2Q17, mainly due to R$95.1 million of operational results from sales of 737 NGs.
Operating result
Operating income (EBIT) in the second quarter was R$42.8 million, an increase of 92.7% compared to the same period in 2017. 2Q18 operating margin was 1.8%, an increase of 0.8 p.p. in relation to 2Q17. On a per available seat-kilometer basis, EBIT was 0.40 cent (R$) in 2Q18, compared to 0.21 cents (R$) in 2Q17 (an increase of 88.6%).
EBITDA in 2Q18 totaled R$207.9 million in the period, an increase of 47.3% over 2Q17. The impact of the increase in RASK of 1.38 cents (R$) and the increase in CASK ex-depreciation of 0.79 cent (R$) resulted in an EBITDA per available seat-kilometer of 1.95 cents (R$) in 2Q18, an improvement of 0.60 cents (R$) compared to 2Q17.
EBITDAR in 2Q18 totaled R$476.8 million in the period, an increase of 24.5% over 2Q17. On a per available seat-kilometer basis, EBITDAR was 4.47 cents (R$) in 2Q18, compared to 3.67 cents (R$) in 2Q17 (an increase of 21.8%).
EBITDAR Calculation (R$ cents/ASK) |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
Net Revenues |
22.05 |
20.67 |
6.7% |
23.03 |
21.15 |
8.9% |
Operating Expenses |
(21.66) |
(20.46) |
5.9% |
(20.66) |
(19.91) |
3.7% |
EBIT |
0.40 |
0.21 |
88.6% |
2.37 |
1.24 |
91.7% |
Depreciation and Amortization |
(1.55) |
(1.14) |
35.8% |
(1.37) |
(1.00) |
36.1% |
EBITDA |
1.95 |
1.35 |
44.1% |
3.74 |
2.24 |
66.8% |
EBITDA Margin |
8.8% |
6.5% |
2.3 p.p |
16.2% |
10.6% |
5.6 p.p |
Aircraft Rent |
(2.52) |
(2.32) |
8.8% |
(2.18) |
(2.15) |
1.5% |
EBITDAR |
4.47 |
3.67 |
21.8% |
5.92 |
4.39 |
34.8% |
EBITDAR Margin |
20.3% |
17.7% |
2.6 p.p |
25.7% |
20.8% |
4.9 p.p |
*2Q17 and 1H17 results have been restated based on IFRS 15. Certain calculations may not match with the information in the quarterly financials due to rounding.
7 |
|
Operating Margins (R$ MM) |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
EBIT |
42.8 |
22.2 |
92.7% |
547.1 |
277.6 |
97.1% |
EBIT Margin |
1.8% |
1.0% |
0.8 p.p |
10.3% |
5.8% |
4.5 p.p |
EBITDA |
207.9 |
141.2 |
47.3% |
862.7 |
503.2 |
71.5% |
EBITDA Margin |
8.8% |
6.5% |
2.3 p.p |
16.2% |
10.6% |
5.6 p.p |
EBITDAR |
476.8 |
383.1 |
24.5% |
1,367.1 |
986.6 |
38.6% |
EBITDAR Margin |
20.3% |
17.7% |
2.6 p.p |
25.7% |
20.8% |
4.9 p.p |
*2Q17 and 1H17 results have been restated based on IFRS 15. Certain calculations may not match with the information in the quarterly financials due to rounding.
EBIT, EBITDA and EBITDAR reconciliation (R$ MM)* |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
Net income (loss)¹ |
(1,272.0) |
(409.5) |
210.6% |
(1,051.1) |
(174.6) |
NM |
(-) Income taxes |
(53.5) |
(6.4) |
NM |
(119.1) |
72.6 |
NM |
(-) Net financial result |
(1,261.2) |
(425.3) |
196.6% |
(1,479.1) |
(524.9) |
181.8% |
EBIT |
42.8 |
22.2 |
92.7% |
547.1 |
277.6 |
97.1% |
(-) Depreciation and amortization |
(165.1) |
(119.0) |
38.8% |
(315.6) |
(225.6) |
39.9% |
EBITDA |
207.9 |
141.2 |
47.3% |
862.7 |
503.2 |
71.5% |
(-) Aircraft rent |
(268.9) |
(241.9) |
11.2% |
(504.4) |
(483.4) |
4.3% |
EBITDAR |
476.8 |
383.1 |
24.5% |
1,367.1 |
986.5 |
38.6% |
*In accordance with CVM Instruction 527, the Company presents the reconciliation of EBIT and EBITDA, whereby: EBIT = net income (loss) plus income and social contribution taxes and net financial result; and EBITDA = net income (loss) plus income and social contribution taxes, net financial result, and depreciation and amortization. GOL also shows the reconciliation of EBITDAR, given its importance as a specific aviation industry indicator, whereby: EBITDAR = net income (loss) plus income and social contribution taxes, the net financial result, depreciation and amortization, and aircraft operating lease expenses;
*2Q17 and 1H17 results has been restated based on IFRS 15. Certain calculations may not match with the information in the quarterly financials due to rounding.
¹ Net income (loss) before minority interest
Net financial result
Net financial expense was R$1.3 billion, an increase of R$835.9 million compared to 2Q17. Due to the appreciation of the USD during the period, interest expense increased by R$8.2 million versus 2Q17, to R$173.6 million, and financial expenses on derivatives contracts decreased by R$6.1 million over 2Q17. Exchange and monetary losses were R$1.0 billion in 2Q18 compared to losses of R$225.7 million in the same period in 2017.
| Interest expensetotaled R$173.6million in 2Q18, an increase of 4.9% over 2Q17, mainly due to the appreciation of the U.S. dollar in the period, partially offset by the reduced cost of debt.
| Gains from financial investments totaled R$21.6 million in 2Q18, primarily due to gains on financial investments and investment funds.
| Net exchange and monetary variation totaled a loss of R$1.0 billion in 2Q18, due to the 16.0% depreciation of the Brazilian Real vs. US Dollar (final exchange rate for the period), from R$3.3238 per dollar as of March 31, 2018 to R$3.8558 per dollar as of June 30, 2018.
| Net result of derivatives was R$6.2 million negative in 2Q18, in comparison to a negative result of R$12.3 million in 2Q17.
| Other financial expenses totaled R$59.6 million in 2Q18, in comparison to R$41.6 million in 2Q17.
8 |
|
The Company uses hedge accounting to account for some of its derivative instruments. In 2Q18, GOL registered a net gain of R$29.9 million from hedge operations, a R$6.2 million loss of which was accounted for in the Company’s financial results and R$36.1 million gain recorded in operating results.
| Fuel: fuel hedge operations made through derivative contracts tied to WTI resulted in an operating gain of R$40.1 million in 2Q18.
| Interest: swap operations to protect the cash flow of future contracted leases, the installments of which are exposed to the volatility of the Libor rate until receiving aircraft, resulted in losses of R$8.3 million in 2Q18.
Consolidated income tax in the second quarter of 2018 represented an expense of R$53.5 million, compared to an expense of R$6.4 million of income tax in 2Q17. On July 1, 2017, Smiles S.A merged into Smiles Fidelidade S.A and, based on financial projections, recognized an income tax benefit totaling R$193.0 million. GLA has tax credits on net loss carryforwards of approximately R$1.7 billion. The Company (GLAI) has tax credits of R$57.9 million, of which R$56.8 million are related to tax loss carry forwards and R$1.2 million related to temporary differences, with realization supported by GOL’s long-term plan.
Smiles Fidelidade S.A. subsidiary results
In 2Q18, net income from our Smiles loyalty program was R$114.2 million, with a net margin of 57.6%. Net revenue in 2Q18 declined by 8.9% to R$198.1 million, compared to R$217.6 million in 2Q17, due to the increase in the cost of acquisition of partners’ products. Operating income was R$130.5 million, a 21.8% reduction from R$166.9 million in 2Q17. Operating margin was 65.9%, a decrease of 10.9 p.p. versus the year-ago period, largely due to an increase in salaries, wages and benefits, payment of profit sharing, and software and data network maintenance expenses. The following table is a summary of the results of GOL’s Smiles subsidiary:
Operating Data (billion) |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
Miles Accrual (ex-GOL) |
22.7 |
20.2 |
12.6% |
42.9 |
35.3 |
21.6% |
Program Redemptions |
19.1 |
15.7 |
21.7% |
32.4 |
37.3 |
-13.2% |
Financial Information (R$ million) |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
Total Gross Billings |
552.4 |
464.8 |
18.8% |
1,060.1 |
895.7 |
18.4% |
Net Revenues |
198.1 |
217.6 |
-8.9% |
445.2 |
447.4 |
-0.5% |
Operating Income |
130.5 |
166.9 |
-21.8% |
314.5 |
346.3 |
-9.2% |
Operating Margin |
65.9% |
76.7% |
-10.9p.p. |
70.6% |
77.4% |
-6.8p.p. |
Net Income |
114.2 |
143.9 |
-20.7% |
269.2 |
300.2 |
-10.3% |
Net Margin |
57.6% |
66.1% |
-8.5p.p. |
60.5% |
67.1% |
-6.6p.p. |
*2Q17 and 1H17 results have been restated based on IFRS 15.
9 |
|
Net income and Earnings per Share (EPS)
In 2Q18, net loss after minority interest was R$1.3 billion compared to net loss of R$477.7 million during 2Q17. The 2Q18 result was impacted by the negative exchange rate variation of R$1.0 billion compared to the negative exchange variation in 2Q17 of R$225.7 million.
(R$ MM) |
2Q18 |
2Q17 |
% Var. |
1H18 |
1H17 |
% Var. |
Net income (loss) before exchange and monetary variations |
(228,6) |
(183,8) |
24,4% |
11,9 |
(92,5) |
-112,9% |
Exchange and monetary variations |
(1,043.4) |
(225.7) |
NM |
(1,063.0) |
(82.1) |
NM |
Net income (loss) |
(1,272.0) |
(409.5) |
210.6% |
(1,051.1) |
(174.6) |
NM |
Minority Interest |
54.0 |
68.2 |
-20.8% |
127.4 |
140.5 |
-9.3% |
Net income (loss) after minority interest |
(1,326.0) |
(477.7) |
177.6% |
(1,178.5) |
(315.1) |
274.0% |
Weighted average shares outstanding |
348.7 |
347.5 |
0.4% |
348.7 |
347.5 |
0.4% |
EPS in R$ before minority interest |
(3.65) |
(1.18) |
209.5% |
(3.01) |
(0.50) |
NM |
EPS in R$ after minority interest |
(3.80) |
(1.37) |
176.6% |
(3.38) |
(0.91) |
272.6% |
EPS in R$ before exchange and monetary variations |
(0.81) |
(0.73) |
11.7% |
(0.33) |
(0.67) |
-50.6% |
Weighted average ADS outstanding |
174.4 |
173.7 |
0.4% |
174.4 |
173.7 |
0.4% |
Earnings per ADS in US$ before min. interest |
(2.02) |
(0.73) |
176.2% |
(1.76) |
(0.31) |
NM |
Earnings per ADS in US$ after min. interest |
(2.11) |
(0.85) |
146.8% |
(1.97) |
(0.56) |
249.8% |
Earnings per ADS in US$ before exchange and mon. var. |
(0.45) |
(0.45) |
-0.3% |
(0.19) |
(0.42) |
-53.6% |
*2Q17 and 1H17 results have been restated based on IFRS 15.
Earnings per share were a negative of R$3.80 in 2Q18 versus a negative R$1.37 for the second quarter of 2017. The number of shares used for the calculation was 348,710,059 in 2Q18 and 347,486,357 in 2Q17, using a ratio of 35 common shares per preferred share.
Earnings per ADS were a negative of US$2.11 in 2Q18, compared to a negative of US$0.85 for the second quarter of 2017. The weighted average number of ADSs was 174.4 million in 2Q18 and 173.7 million in 2Q17, according to the current ratio of the number of preferred shares per ADS (2:1), which came into effect in November 2017.
Cash Flow
As of June 30, 2018, total liquidity (comprised by cash, cash equivalents, short-term investments, restricted cash and accounts receivable) was R$3.0 billion, flat in comparison to March 31, 2018 and increased by R$1.3 billion versus a year ago.
Operating activities generated R$588.7 million in 2Q18, 16.8% up versus 2Q17, mainly due to higher operating income and actions that strengthened working capital.
Investment activities consumed a net R$430.4 million in the quarter, mainly due to a higher volume of engine maintenance R$400.7 million and R$43.3 million related to the acquisition of a spare engine for aircraft MAX. Net cash flow was positive by R$158.2 million for the quarter.
Financing activities in 2Q18 used R$245.9 million, mainly due to dividends and interest on equity of R$214.7 million paid out by our Smiles subsidiary and R$89.9 million for the tender offer payments for repurchase of Senior Notes due 2020 and 2023.
10 |
|
Consolidated Cash Flow Summary (R$mm)(1) |
2Q18 |
2Q17 |
% Var. |
1Q18 |
% Var. |
Net Income (Loss) for the Period |
(1,272.0) |
(409.5) |
210.6% |
220.8 |
NM |
Adjustment of Non-Cash Items |
1,362.5 |
458.2 |
197.4% |
433.1 |
214.6% |
Net Income (Loss) After Adjusting Non-Cash Items |
90.5 |
48.7 |
85.9% |
653.9 |
-86.2% |
Net Cash Provided by Operating Activities |
588.7 |
503.9 |
16.8% |
123.7 |
NM |
Net Cash Used in Investment Activities |
(430.4) |
(110.4) |
289.9% |
(181.8) |
136.7% |
Net Cash Flow (2) |
158.2 |
393.5 |
-59.8% |
(58.1) |
NM |
Net Cash Used in Financing Activities |
(245.9) |
(140.3) |
75.3% |
(20.6) |
NM |
Net Increase (decrease) in Cash, Cash Equivalents and A/R |
(87.7) |
253.2 |
NM |
(78.8) |
11.3% |
Cash at beginning of period |
2,096.3 |
694.5 |
201.8% |
2,250.5 |
-6.9% |
Accounts receivable at beginning of period |
1,011.9 |
822.7 |
23.0% |
936.5 |
8.1% |
Cash at end of period |
2,097.5 |
910.6 |
130.4% |
2,096.3 |
0.1% |
Accounts receivable |
923.0 |
859.9 |
7.3% |
1,011.9 |
-8.8% |
Total Liquidity |
3,020.5 |
1,770.5 |
70.6% |
3,108.2 |
-2.8% |
1- Some items reclassified for clearer presentation.
2- Net Income (Loss) after adjusting Non-Cash Items + cash flow from operating activities + cash flow from investing activities.
Total Fleet
Final |
2Q18 |
2Q17 |
Var. |
1Q18 |
Var. |
Boeing 737s |
119 |
120 |
-1 |
118 |
1 |
800 NG |
92 |
92 |
0 |
92 |
0 |
700 NG |
26 |
28 |
-2 |
26 |
0 |
MAX 8 |
1 |
0 |
1 |
0 |
1 |
By rental type |
2Q18 |
2Q17 |
Var. |
1Q18 |
Var. |
Financial Leases |
27 |
31 |
-4 |
29 |
-2 |
Operating Leases |
92 |
89 |
3 |
89 |
-3 |
At the end of 2Q18, GOL’s total fleet was 119 Boeing 737 aircraft with 117 aircraft in operation, one aircraft subleased for another airline and one MAX 8 aircraft in preparation to start operating. At the end of June 2017, of total of 120 Boeing 737 aircraft, GOL was operating 116 aircraft on routes. The four remaining aircraft were sub-leased to another airline.
GOL has 92 aircraft under operating leasing arrangements and 27 aircraft under financial lease structures. 27 aircraft have a purchase option at the end of their lease contracts.
The average age of the fleet was 9.6 years at the end of 2Q18. The Company has 135 firm Boeing 737 MAX orders, comprised of 105 737 MAX 8 orders and 30 737 MAX 10 orders, allowing complete fleet renewal by 2028. GOL expects to end the year with 6 MAX 8 aircraft in the fleet.
Fleet plan |
2018 |
2019E |
2020E |
>2020E |
Total |
Operating Fleet (End of the year) |
120 |
122 |
125 |
|
|
Aircraft Commitments (R$ million)* |
- |
1,302.7 |
5,289.8 |
45,964.8 |
52,557.3 |
Pre-Delivery Payments (R$ million) |
179.4 |
628.8 |
793.4 |
5,974.2 |
7,575.8 |
* Considers aircraft list price.
11 |
|
Liquidity and Indebtedness
As of June 30, 2018, the Company registered total liquidity (total cash, including cash and cash equivalents, financial investments, restricted cash and accounts receivable) of R$3.0 billion, an increase of R$1.3 billion versus a year ago. Accounts receivable, consisting mostly of ticket sales via credit card and accounts receivable from travel agencies, totaled R$923.0 million, an increase of 7.3% over 2Q17.
Liquidity (R$ MM) |
2Q18 |
2Q17 |
% Var. |
1Q18 |
% Var. |
Cash, cash equivalents and restricted cash |
2,097.5 |
910.6 |
130.4% |
2,096.3 |
0.1% |
Short-Term Accounts Receivable |
923.0 |
859.9 |
7.3% |
1,011.9 |
-8.8% |
Total Liquidity |
3,020.5 |
1,770.5 |
70.6% |
3,108.2 |
-2.8% |
Total Liquidity as % of LTM Net Revenues |
27.4% |
18.0% |
9.4 p.p. |
28.7% |
-1.3 p.p. |
Indebtedness (In R$MM, except when otherwise indicated) |
2Q18 |
2Q17 |
% Var. |
1Q18 |
% Var. |
Loans and Financings |
2,199.1 |
1,321.9 |
66.4% |
1,788.7 |
22.9% |
Debt Issuance |
3,913.5 |
3,028.6 |
29.2% |
3,526.9 |
11.0% |
Aircraft Rent |
525.6 |
267.4 |
96.6% |
364.1 |
44.4% |
Aircraft Financing |
1,393.4 |
1,599.0 |
-12.9% |
1,336.9 |
4.2% |
Total Loans and Financings |
8,031.7 |
6,217.0 |
29.2% |
7,016.6 |
14.5% |
Short-Term Debt |
1,534.2 |
728.1 |
110.7% |
1,188.8 |
29.1% |
Debt in US$ |
289.6 |
188.1 |
53.9% |
238.6 |
21.4% |
Debt in BRL |
417.7 |
105.8 |
294.9% |
395.8 |
5.5% |
Long-Term Debt |
6,497.5 |
5,488.9 |
18.4% |
5,827.8 |
11.5% |
Debt in US$ |
1,524.4 |
1,354.2 |
12.6% |
1,567.3 |
-2.7% |
Debt in BRL |
619.5 |
1,008.8 |
-38.6% |
618.4 |
0.2% |
Perpetual Notes |
510.8 |
438.2 |
16.6% |
440.3 |
16.0% |
Accumulated Interest |
175.6 |
125.1 |
40.4% |
73.0 |
140.7% |
Operating Leases (off-balance)¹ |
6,073.7 |
5,579.0 |
8.9% |
5,287.7 |
14.9% |
Debt and Leverage (R$MM) |
2Q18 |
2Q17 |
% Var. |
1Q18 |
% Var. |
Gross Debt ex-perpetual notes (R$ MM) |
7,520.9 |
5,778.8 |
30.1% |
6,576.3 |
14.4% |
LTM Aircraft Rent x 7 years2 |
6,724.6 |
6,090.0 |
10.4% |
6,535.6 |
2.9% |
Gross Adjusted Debt3 (R$ MM) |
14,245.5 |
11,868.8 |
20.0% |
13,111.9 |
8.6% |
Cash (R$ MM) |
2,097.5 |
910.6 |
130.4% |
2,096.3 |
0.1% |
Net Adjusted Debt3 (R$ MM) |
12,147.9 |
10,958.2 |
10.9% |
11,015.6 |
10.3% |
% of debt in foreign currency |
85.5% |
82.1% |
3.4 p.p |
84.5% |
1.1 p.p |
% of debt in Short-Term |
19.1% |
11.7% |
7.4 p.p |
16.9% |
2.2 p.p |
% of debt in Long-Term |
80.9% |
88.3% |
-7.4 p.p |
83.1% |
-2.2 p.p |
Total of Loans and Financings |
8,031.7 |
6,217.0 |
29.2% |
7,016.6 |
14.5% |
- Perpetual notes |
510.8 |
438.2 |
16.6% |
440.3 |
16.0% |
- Cash, equivalents, short-term inv. and restricted cash |
2,097.5 |
910.6 |
130.4% |
2,096.3 |
0.1% |
= Net Debt (ex-perpetual notes) |
5,423.3 |
4,868.2 |
11.4% |
4,480.0 |
21.1% |
LTM EBITDA |
1,853.8 |
1,156.8 |
60.2% |
1,787.1 |
3.7% |
Net Debt (ex-perpetual notes)/LTM EBITDA |
2.9 x |
4.2 x |
-1.3x |
2.5 x |
0.4 x |
Adjusted Gross Debt3 / EBITDAR Annualized |
5.1 x |
5.9 x |
-0.8x |
4.8 x |
0.3 x |
Adjusted Net Debt3 / EBITDAR Annualized |
4.3 x |
5.4 x |
-1.1x |
4.0 x |
0.3 x |
Net Financial Commitments4 / EBITDAR Annualized |
4.1 x |
5.2 x |
-1.1x |
3.6 x |
0.5 x |
1 - Total minimum lease payments / 2 – LTM Aircraft rent costs x7, according to the market convention for average fleet age 3 - Financial commitments (gross debt + operational leasing contracts – perpetual notes) less Cash / 4 - Debt (excluding perpetual notes) + LTMoperational leasing expenses x 7 /; *2Q17 and 1H17 results has been restated based on IFRS 15. Certain calculations may not match with the information in the quarterly financials due to rounding.
12 |
|
Loans and financing
GOL maintained its cost of debt and liquidity levels during 2Q18 despite the 16% dollar increase in the quarter. In 2Q18, the Company redeemed its Senior Notes due 2023 in the amount of R$80.7 million. The Company registered total loans and financings as of June 30, 2018 of R$8.0 billion (including finance leases), an increase of 14.5% versus 1Q18. The net debt/LTM EBITDA ratio (excluding perpetual notes) was 2.9x at the end of the period, compared to 2.5x of March 31, 2018. The average maturity of the Company's long-term debt in 2Q18, excluding finance leases and perpetual notes, was 3.8 years. GOL’s average interest rate was 8.43% for local-currency debt, the same level as 1Q18, and 6.76% for Dollar-dominated debt, compared to 6.86% in 1Q18.
Financial Debt amortization schedule 2Q18 (R$ MM)
13 |
|
Financial Outlook |
2018E |
2019E | |||
(Consolidated, IFRS) |
Previous |
Revised |
|
Previous |
Revised |
Total fleet (average) |
117 |
117 |
|
122 to 124 |
122 to 124 |
Total Operational fleet (average) |
* |
110 |
|
* |
116 |
ASKs, System (% change) |
1 to 2 |
1 to 2 |
|
5 to 10 |
5 to 10 |
- Domestic |
0 to 2 |
0 to 2 |
|
1 to 3 |
1 to 3 |
- International |
6 to 8 |
6 to 8 |
|
30 to 40 |
30 to 40 |
Seats, System (% change) |
0 to 2 |
0 to 2 |
|
3 to 5 |
3 to 5 |
Departures, System (% change) |
0 to 2 |
0 to 2 |
|
2 to 5 |
2 to 5 |
Average load factor (%) |
79 to 80 |
79 to 80 |
|
79 to 81 |
79 to 81 |
Ancillary revenues1 (R$ billion) |
~ 1.2 |
~ 1.0 |
|
~ 1.6 |
~ 1.3 |
Total net revenues (R$ billion) |
~ 11 |
~ 11.5 |
|
~ 12 |
~ 12.5 |
Non-fuel CASK (R$ cents) |
~ 14 |
~ 13.5 |
|
~ 15 |
~ 14 |
Fuel liters consumed (mm) |
~ 1,380 |
~ 1,370 |
|
~ 1,440 |
~ 1,420 |
Fuel price (R$/liter) |
~ 2.5 |
~ 2.9 |
|
~ 2.6 |
~ 2.9 |
EBITDA margin (%) |
~ 16 |
~ 16 |
|
~ 18 |
~ 17 |
Operating (EBIT) margin (%) |
~ 11 |
~ 11 |
|
~ 13 |
~ 12 |
Net financial expense2 (R$ mm) |
~ 650 |
~ 800 |
|
~ 500 |
~ 500 |
Pre-tax margin2 (%) |
* |
~ 4 |
|
* |
~ 8 |
Effective income tax rate (%) |
~ 5 |
~ 23 |
|
~ 0 |
~ 10 |
Minority interest3 (R$ mm) |
* |
~ 289 |
|
* |
* |
Capital expenditures, net (R$ mm) |
~ 700 |
~ 750 |
|
~ 600 |
~ 600 |
Net Debt4 / EBITDA (x) |
~ 2.8x |
~ 2.8x |
|
~ 2.5x |
~ 2.5x |
Aircraft rent (R$ mm) |
~ 960 |
~ 1,100 |
|
~ 1,000 |
~ 1,000 |
Fully-diluted shares out. (million) |
348.4 |
348.7 |
|
348.7 |
348.7 |
Earnings per share, fully diluted2 (R$) |
* |
0.10 to 0.30 |
|
* |
1.50 to 1.90 |
Earnings per share, fully diluted (R$) |
0.90 to 1.10 |
(1.20) to (1.00) |
|
1.70 to 2.30 |
1.50 to 1.90 |
Fully-diluted ADS out. (million) |
174.2 |
174.4 |
|
174.4 |
174.4 |
Earnings per ADS, fully diluted2 (US$) |
* |
0.05 to 0.15 |
|
* |
0.80 to 1.20 |
Earnings per ADS, fully diluted (US$) |
0.50 to 0.65 |
(0.60) to (0.50) |
|
1.00 to 1.50 |
0.80 to 1.20 |
(1) Cargo, loyalty, buy-on-board and other ancillary revenues; (2) Excluding currency gains and losses; (3) Average of analyst estimates (Source: Bloomberg); (4) Excluding perpetual bonds; (*) Not provided.
14 |
|
E-mail: ri@voegol.com.br
Phone: +55 (11) 2128-4700
Website: www.voegol.com.br/ri
2Q18 Earnings Calls Thursday, August 2, 2018
Live Webcast(www.voegol.com.br/ri)
In English 11:00 a.m. (US EDT) 12:00 p.m. (Brasília) Code: GOL Replay: +1 (412) 317-0088 Replay Code: 10120814 |
In Portuguese 1:30 p.m. (Brasília) 12:30 p.m. (US EDT) Code: GOL Replay: +55 (11) 3193-1012 Replay Code: 309573#
|
15 |
|
Income statement (R$ MM)* |
2Q18 |
2Q17 |
|
% Change | |
Net operating revenues |
|
|
|
|
|
Passenger |
2,146.2 |
1,945.8 |
|
10.3% | |
Cargo and Other |
207.6 |
213.6 |
|
-2.8% | |
Total net operating revenues |
2,353.8 |
2,159.4 |
|
9.0% | |
Operating Expenses |
|
| |||
Salaries, wages and benefits |
(410.7) |
|
(381.7) |
|
7.6% |
Aircraft fuel |
(792.7) |
(629.7) |
|
25.9% | |
Aircraft rent |
(268.9) |
(241.9) |
|
11.2% | |
Passenger Costs |
(103.9) |
(98.4) |
|
5.6% | |
Sales and marketing |
(152.7) |
(124.4) |
|
22.7% | |
Landing fees |
(168.1) |
(144.7) |
|
16.2% | |
Services Provided |
(144.3) |
(137.9) |
|
4.7% | |
Maintenance materials and repairs |
(88.8) |
(132.2) |
|
-32.8% | |
Depreciation and amortization |
(165.1) |
(119.0) |
|
38.8% | |
Other |
(16.1) |
(127.3) |
|
-87.4% | |
Total Operating Expenses |
(2,311.2) |
(2,137.1) |
|
8.1% | |
Equity Income |
0.2 |
0.0 |
|
NM | |
Operating Income |
42.8 |
|
22.2 |
|
92.7% |
Financial Income (expense), net |
(1,261.2) |
|
(425.3) |
|
196.6% |
Income (Loss) before income taxes |
(1.218.4) |
(403.1) |
|
202.3% | |
Current income tax |
(42.2) |
|
(69.3) |
|
-39.1% |
Deferred income tax |
(11.3) |
62.8 |
|
NM | |
Net income (loss) before minority interest |
(1,272.0) |
(409.5) |
|
210.6% | |
Smiles’ Minority interest |
54.0 |
68.2 |
|
-20.8% | |
Net income (loss) after minority interest |
(1,326.0) |
(477.7) |
|
177.6% | |
EPS in R$ after minority interest |
(3.80) |
(1.37) |
|
176.6% | |
Earnings per ADS in US$ after minority interest |
(2.11) |
|
(0.85) |
|
146.8% |
Number of shares at the end of the period MM |
348.7 |
|
347.5 |
|
0.4% |
*2Q17 and 1H17 results have been restated based on IFRS 15; Breakdown of costs with different methodology in relation to that reported in 2Q17; Certain calculations may not match with the information in the quarterly financials due to rounding.
16 |
|
Income statement (R$ MM)* |
1H18 |
1H17 |
% Change | ||
Net operating revenues |
|
|
|
|
|
Passenger |
4,945.1 |
4,375.1 |
13.0% | ||
Cargo and Other |
373.0 |
376.4 |
-0.9% | ||
Total net operating revenues |
5,318.1 |
4,751.4 |
11.9% | ||
Operating Expenses |
|||||
Salaries, wages and benefits |
(894.3) |
|
(795.7) |
|
12.4% |
Aircraft fuel |
(1,676.9) |
(1,365.5) |
22.8% | ||
Aircraft rent |
(504.4) |
(483.4) |
4.3% | ||
Passenger Costs |
(223.6) |
(215.6) |
3.7% | ||
Sales and marketing |
(280.0) |
(242.0) |
15.7% | ||
Landing fees |
(355.6) |
(319.5) |
11.3% | ||
Services Provided |
(274.5) |
(275.8) |
-0.5% | ||
Maintenance materials and repairs |
(199.1) |
(220.4) |
-9.7% | ||
Depreciation and amortization |
(315.6) |
(225.6) |
39.9% | ||
Other |
(47.1) |
(330.4) |
-85.7% | ||
Total Operating Expenses |
(4,771.2) |
(4,473.9) |
6.6% | ||
Equity Income |
0.2 |
0.1 |
18.3% | ||
Operating Income |
547.1 |
|
277.6 |
|
97.1% |
Financial Income (expense). net |
(1.479.1) |
|
(524.9) |
|
181.8% |
Income (Loss) before income taxes |
(932.0) |
(247.3) |
276.9% | ||
Current income tax |
(91.5) |
|
(154.4) |
|
-40.7% |
Deferred income tax |
(27.6) |
227.0 |
NM | ||
Net income (loss) before minority interest |
(1,051.1) |
(174.6) |
NM | ||
Smiles’ Minority interest |
127.4 |
140.5 |
-9.3% | ||
Net income (loss) after minority interest |
(1.178.5) |
|
(315.1) |
|
274.0% |
EPS in R$ after minority interest |
(3.38) |
|
(0.91) |
|
272.6% |
Earnings per ADS in US$ after minority interest |
(1.97) |
|
(0.56) |
|
249.8% |
Number of shares at the end of the period MM |
348.7 |
|
347.5 |
|
0.4% |
*2Q17 and 1H17 results have been restated based on IFRS 15; Breakdown of costs with different methodology in relation to that reported in 2Q17; Certain calculations may not match with the information in the quarterly financials due to rounding.
17 |
|
Consolidated Balance Sheet (R$ 000)* |
June 30, 2018 |
Dec 31, 2017 |
% Change | |
ASSETS |
10,240,103 |
10,004,748 |
2.4% | |
Current Assets |
3,186,269 |
3,344,998 |
-4.7% | |
Cash and cash equivalents |
615,321 |
1,026,862 |
-40.1% | |
Short-term investments |
1,153,465 |
955,589 |
20.7% | |
Trade receivables |
922,953 |
936,478 |
-1.4% | |
Inventories |
205,659 |
178,491 |
15.2% | |
Recoverable taxes |
117,337 |
83,210 |
41.0% | |
Derivatives |
45,238 |
40,647 |
11.3% | |
Other credits |
126,296 |
123,721 |
2.1% | |
Non-Current Assets |
7,053,834 |
6,659,750 |
5.9% | |
Deposits |
1,360,461 |
1,163,759 |
16.9% | |
Restricted cash |
328,761 |
268,047 |
22.7% | |
Recoverable taxes |
20,344 |
7,045 |
188.8% | |
Deferred taxes |
235,825 |
276,514 |
-14.7% | |
Other noncurrent assets |
- |
- |
0.0% | |
Investments |
1,488 |
1,333 |
11.6% | |
Property. plant and equipment |
3,365,448 |
3,195,767 |
5.3% | |
Intangible assets |
1,741,507 |
1,747,285 |
-0.3% | |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
10,240,103 |
|
10,004,748 |
2.4% |
Current Liabilities |
6,582,028 |
|
5,769,620 |
14.1% |
Short-term debt |
1,534,173 |
|
1,162,872 |
31.9% |
Suppliers |
1,464,837 |
|
1,249,124 |
17.3% |
Suppliers – forfaiting |
420,880 |
|
78,416 |
NM |
Salaries |
275,801 |
|
305,454 |
-9.7% |
Taxes payable |
105,080 |
|
134,951 |
-22.1% |
Landing fees |
261,698 |
|
365,651 |
-28.4% |
Air traffic liability |
1,382,615 |
|
1,476,514 |
-6.4% |
Mileage program |
806,345 |
|
765,114 |
5.4% |
Advances from customers |
58,202 |
|
21,718 |
168.0% |
Provisions |
66,349 |
|
46,561 |
42.5% |
Derivatives |
16,042 |
|
34,457 |
-53.4% |
Operational leases |
150,558 |
|
28,387 |
NM |
Other current liabilities |
39,448 |
|
100,401 |
-60.7% |
Non-Current Liabilities |
7,949,341 |
|
7,323,649 |
8.5% |
Long-term debt |
6,497,479 |
|
5,942,795 |
9.3% |
Suppliers |
187,389 |
|
222,026 |
-15.6% |
Provisions |
671,294 |
|
562,628 |
19.3% |
Mileage program |
203,777 |
|
188,204 |
8.3% |
Deferred taxes |
171,929 |
|
188,005 |
-8.6% |
Taxes payable |
57,468 |
|
66,196 |
-13.2% |
Operational leases |
114,947 |
|
110,723 |
3.8% |
Other noncurrent liabilities |
45,058 |
|
43,072 |
4.6% |
Shareholders' Equity |
(4,291,266) |
|
(3,088,521) |
38.9% |
Capital Stock |
3,090,100 |
|
3,082,802 |
0.2% |
Shares to Issue |
2,472 |
|
- |
0.0% |
Share Issuance Costs |
(155,618) |
|
(155,618) |
0.0% |
Treasury shares |
(126) |
|
(4,168) |
-97.0% |
Capital reserves |
88,476 |
|
88,762 |
-0.3% |
Equity valuation adjustment |
(63,642) |
|
(79,316) |
-19.8% |
Share-based payments reserve |
108,330 |
|
119,308 |
-9.2% |
Gain on change in investments |
759,984 |
|
760,545 |
-0.1% |
Accumulated losses |
(8,489,685) |
|
(7,312,849) |
16.1% |
Non-controlling interests |
368,443 |
|
412,013 |
-10.6% |
18 |
|
Consolidated Cash Flow (R$000) |
2Q18 |
2Q17 |
% Change | ||
Net Income (loss) for the period |
(1,271,953) |
(409,511) |
210.6% | ||
Depreciation and amortization |
165,080 |
118,956 |
38.8% | ||
Allowance for doubtful accounts |
(4,014) |
1,719 |
NM | ||
Provisions for legal proceedings |
59,487 |
34,611 |
71.9% | ||
Provision for inventory obsolescence |
3,394 |
580 |
485.2% | ||
Deferred taxes |
11,325 |
(62,824) |
NM | ||
Equity results |
(174) |
(5) |
NM | ||
Share-based payments |
4,097 |
3,160 |
29.7% | ||
Exchange and monetary variations. net |
965,215 |
221,361 |
336.0% | ||
Interest on debt. leases and other obligation |
171,438 |
139,248 |
23.1% | ||
Amortization of costs on loans and leases |
- |
|
- |
|
NM |
Unrealized hedge |
(10,612) |
(11,172) |
-5.0% | ||
Provision for profit sharing |
(15,157) |
(5,545) |
173.3% | ||
Write-off of property. plant and equipment and intangible assets |
12,395 |
18,103 |
-31.5% | ||
Adjusted net income |
90,521 |
|
48,681 |
|
85.9% |
Changes in operating assets and liabilities: |
|
|
|
|
|
Trade receivables |
92,432 |
|
(35,583) |
|
NM |
Short-term investments |
134,080 |
(45,844) |
NM | ||
Inventories |
(28,139) |
|
(20,652) |
|
36.3% |
Deposits |
(100,849) |
|
(34,406) |
|
193.1% |
Suppliers |
245,444 |
|
106,523 |
|
130.4% |
Suppliers - forfaiting |
(16,600) |
|
- |
|
0.0% |
Air traffic liability |
328,753 |
|
336,934 |
|
-2.4% |
Mileage program |
77,224 |
|
(8,938) |
|
NM |
Advances from customers |
(23,456) |
|
(43,154) |
|
-45.6% |
Labor obligations |
(30,656) |
|
(20,816) |
|
47.3% |
Taxes and airport fees |
4,037 |
|
48,875 |
|
-91.7% |
Tax obligations |
32,869 |
|
98,048 |
|
-66.5% |
Obligations arising from derivative transactions |
7,280 |
|
(2,659) |
|
NM |
Provisions |
(65,797) |
|
(74,845) |
|
-12.1% |
Operational leases |
106,519 |
|
(59,520) |
|
NM |
Other assets |
(19,526) |
|
242,278 |
|
NM |
Interest paid |
(47,039) |
|
(44,316) |
|
6.1% |
Income taxes paid |
(62,869) |
|
(73,679) |
|
-14.7% |
Net cash flows from (used in) operating activities |
724,228 |
|
416,927 |
|
73.7% |
Disposal of non-controlling shares, net |
- |
|
|
|
NM |
Short-term investments - Smiles |
91,217 |
|
58,030 |
|
57.2% |