The following is a summary of the LATAM Airlines Group S.A. (LTMAY) Q1 2024 Earnings Call Transcript:
Financial Performance:
LATAM Group displayed a strong Q1 2024 performance, reporting revenues of $3.3 billion and an adjusted EBIT margin of 13.9%.
The company posted an adjusted EBITDA of approximately $800 million and a net income of $258 million.
Passenger ex-fuel cost remained steady at $0.043 per ASK.
The group successfully lowered its adjusted net leverage to 1.9x and generated positive cash flow of $137 million.
For 2024, the company expects a fleet cost of around $900 million due to the global aircraft shortage and the resultant increased prices.
The 2024 guidance predicts a rise in adjusted EBITDA, with a midpoint of $2.9 billion.
Business Progress:
The company transported a record-breaking 20.2 million passengers, obtained a robust load factor of 84.4%, and saw recovery in capacity to 2019 levels.
LATAM Brazil achieved a record domestic market share of 41% in March, its highest in the last 11 years.
Despite aircraft delivery delays and high fuel prices, operations remain strong.
The airline is making strategic improvements to its offerings, remodeling premium cabins, improving onboard connectivity, and building a new VIP lounge in Lima Airport.
Plans to reopen and release the New York Exchange, subject to market conditions, have been approved by LATAM's Board.
The aim for 2024 is to finish the year with an adjusted net leverage between 1.6 to 1.8x.
Rating agencies have positively recognized the company's performance: Moody's (BA3 with a stable outlook), S&P (B+ grade with a positive outlook), and local agency Seller (BBB with a positive outlook).
The company is focusing on reviving operations in its Santiago, Lima, and Guarulhos hubs to pre-pandemic levels and is re-launching pre-pandemic routes.
Progress is being made on its ADR listing, with the Board set to approve the timing of listing.
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