The pace of debt reduction remains consistent.
- Positive net income in the second quarter of 2024 allows the Airline to close the first six months of the year with a profit of EUR 0.4 million.
- The Airline's Operating Revenues reached EUR 1,969 million, increasing by 3.3% compared to the first half of 2023, with a significant growth in Maintenance and Engineering revenues (+36.7%).
- Recurring operating costs increased by 2.7%, reaching EUR 1,829.3 million.
- TAP also achieved a notable improvement in its Financial Debt/EBITDA ratio, reaching a level of 2.1x, compared to the ratio of 2.6x on December 31, 2023, and 5.2x on December 31, 2019.
- In the first half of 2024, the Airline carried a total of 7.7 million passengers, representing an increase of 1.6% compared to the same period of the previous year.
- Load Factor increased by 0.8 p.p. year-on-year and reached 81.1% in 1H24.
In the first half of 2024 (1H24), TAP Air Portugal's Operating Revenues reached EUR 1,969 million, increasing by 3.3% compared to the first half of 2023, driven, in the passenger revenues, by an increase in capacity (+2.9%) and improved load factor (+0.8 p.p.), and by a significant increase in activity in Maintenance and Engineering revenues (+36.7%).
TAP recorded, In the first half of 2024, an increase in recurring operating results compared to 2023, reaching a recurring EBITDA of EUR 372.7 million (+EUR 11.0 million), with a margin of 19%, and a recurring EBIT of EUR 139.2 million (+EUR 14.7 million), with a margin of seven percent.
In 1H24, TAP recorded a net profit of EUR 0.4 million, because of the positive net profit generated in the second quarter of EUR 72.2 million, offsetting the negative net income in the first quarter of 2024.
As of 30 June 2024, the Group recorded a strong liquidity position of EUR 1,175.7 million, an increase of EUR 386.3 million compared to the end of 2023.
In addition, there was a significant improvement in the Financial Debt / EBITDA ratio, reaching a level of 2.1x, when compared to the ratio of 2.6x on 31 December 2023, reinforcing TAP's path of disciplined and prudent financial management deleveraging, with the aim of inspiring investor confidence.
For the second half of 2024, bookings remain in line with the previous year, although with some pressure on yields.
The focus on the Brazilian market will grow, with the opening of a new route, Florianopolis, and the reopening of another, Manaus, increasing the offer to 13 destinations through 15 routes.
Luís Rodrigues, CEO of TAP, believes that “in the second quarter of 2024, we continued the necessary path of structural transformation of TAP. The investment in people and operations continues to confirm the focus and show results: a significant reduction in disruptions, the continuous increase in punctuality and regularity, and the increase in NPS (the customer satisfaction index), with consequent growth in revenues. Special mention goes to the Maintenance and Engineering area, which is beginning to realize its potential.”
“The strong performance in the second quarter,” Luís Rodrigues continued, “allows for a positive net result in the semester, which, despite being reduced, is achieved for the second consecutive time, but now without salary cuts.”
“We continue on the path we set out to follow, with the commitment of our people and the support of our stakeholders: to establish TAP as a sustainably profitable company and one of the most attractive in the industry,” concluded TAP’s CEO.
ANALYSIS OF THE SECOND QUARTER OF 2024
In the second quarter of 2024 (2Q24), compared to the second quarter of 2023 (2Q23), the number of passengers transported increased by 2.4%, and the number of flights operated increased by 0.7%. Compared to pre-crisis levels in 2019 (“2Q19”), the number of passengers reached 92% and the number of flights operated reached 87%.
Capacity (measured in ASK) increased by 2.1% compared to 2Q23, surpassing pre-crisis levels and reaching 102% of 2Q19.
Load Factor reached 82.7%, improving by 1.4 p.p. when compared to the previous year, and decreasing by 0.8 p.p. when compared to pre-crisis levels.
Operating revenues totaled EUR 1,106.7 million, increasing by 3.4% compared to 2Q23, surpassing and representing 133% of 2Q19 operating revenues. Ticket revenues increased by EUR 8.3 million (+0.8%) compared to 2Q23, totaling EUR 986.4 million, generating a PRASK of EUR 7.39 cents – a decrease of 1.2% (-EUR 0.09 cents) when compared to 2Q23 and an increase of 30.2% (+EUR 1.71 cents) compared to 2Q19.
Maintenance revenues increased by EUR 29.9 million (+71.4%) compared to 2Q23, totaling EUR 71.8 million, mainly due to the increase in engine shop activity. Cargo and Mail revenues decreased by EUR 4.3 million to EUR 39.3 million, down 9.9% compared to 2Q23, due to the continued normalization of cargo yields observed in the market.
Recurring operating costs reached EUR 924.1 million, down 1.2% or EUR 11.6 million compared to 2Q23. This variation is mainly due to the decrease in traffic operating costs (-EUR 24.0 million or 10.1%) due to the reduction in ACMI hiring and reduction in costs with irregularities, and the decrease in impairment costs (-EUR 25.6 million), including the reversal of the impairment loss related to Groundforce resulting from the approval of its restructuring plan, offset by the increase in personnel costs (+EUR 28.5 million or 18.1%) due to the new company agreements that came into force in the second half of 2023.
Total CASK of recurring operating costs decreased by 3.2% (-EUR 0.23 cents), reaching EUR 6.93 cents, when compared to 2Q23. Excluding fuel costs, CASK of recurring operating costs reached EUR 4.95 cents, decreasing by 3.4% (-EUR 0.17 cents) compared to 2Q23.
Recurring EBITDA amounted to EUR 289.0 million in 2Q24, increasing by EUR 47.4 million (+19.6%) compared to 2Q23. Recurring EBIT increased by EUR 47.9 million (+35.5%) compared to 2Q23, totaling EUR 182.5 million, representing a margin of 16.5%. Considering non-recurring items, EBIT amounted to EUR 168.0 million. Compared to pre-crisis levels, recurring EBIT and EBIT increased by EUR 163.7 million and EUR 151.6 million, respectively.
Net income amounted to EUR 72.2 million, a decrease of EUR 8.1 million compared to 2Q23, impacted by foreign exchange losses following the depreciation of the Brazilian Real, offsetting operating gains. However, when compared to 2Q19, it improved by EUR 77.6 million.
As of 30 June 2024, the balance sheet showed a robust cash and cash equivalents position of EUR 1,175.7 million, an increase of EUR 386.3 million compared to 31 December 2023.
The net financial debt/EBITDA ratio improved significantly to 2.1x compared to year-end 2023 (2.6x).
From an operational perspective, five destinations from Lisbon were reopened during the second quarter for the summer season: Ibiza, Alicante, Palma de Mallorca, Menorca and Agadir, and a new route was opened for the summer season from Lisbon to Caracas, with return via Funchal.
The operational fleet consisted of 99 aircraft as of 30 June 2024, with 68% of the medium and long-haul operational fleet consisting of NEO Family aircraft (compared to 67% as of 30 June 2023 and 27% as of 30 June 2019).
Tags: Luís Rodrigues, TAP, profit of 72.2 million
