Gulf Today

Brazil airline Azul hikes 2024 earnings forecast


SAO PAULO: Brazilian carrier Azul bumped up its estimate for core earnings in 2024 as air travel demand in Latin America’s largest economy remains at robust levels, helping Azul despite capacity bottleneck­s in the industry.

Azul said it expects earnings before interest, taxes, depreciati­on and amortizati­on (EBITDA) of around 6.5 billion reais this year, representi­ng nearly 25 per cent growth over 2023 and above the 6.3 billion reais previously projected.

The upward revision, the company said in a securities filing, reflects strong demand, improving fuel prices, expected growth in capacity and a greater number of fuel-efficient aircraft entering its fleet.

For the fourth quarter of 2023, the airline reported 74.5 per cent growth in net profit to 403.3 million reais, while net revenue rose 13% to 5.03 billion reais, topping the estimate of analysts polled by LSEG of 4.93 billion.

Sao Paulo-traded shares of Azul slipped some 5 per cent ater the report, making the stock the biggest decliner on Brazil’s Bovespa stock index, but sell-side analysts welcomed the results.

“Azul reported decent results,” Jpmorgan analysts said in a note to clients, adding that the company offers “significan­t asymmetry to the upside” even ater an upcoming equity dilution related to a deal with lessors.

Azul wrapped up restructur­ing obligation­s last year with lessors and equipment manufactur­ers in a bid to boost its capital structure and cash flow, giving equity and tradable debt in exchange for lower payments.

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