Core Insights - LATAM Airlines Group S.A. has achieved significant operational improvements, regaining operating margin and consolidating its leadership in the region [1] - In Q2 2025, the company reported an 8% increase in revenues and reached a record adjusted operating margin of 12.9% [1] - The company's leverage has been reduced, indicating improved financial stability [1]

Financial Data and Key Metrics Changes - LATAM Airlines Group reported total revenues of $3.3 billion, an increase of 8.2% year over year, driven by healthy demand in both passenger and cargo segments [21][7] - Adjusted EBITDA reached $850 million with a margin of 25.9%, reflecting a 5.5 percentage point improvement from the same period last year [7][22] - Net income for the quarter was $242 million, marking a 66% increase year over year, bringing first half net income to nearly $597 million [8][29] Business Line Data and Key Metrics Changes - Passenger revenues rose by 8.5%, while revenues from premium travelers increased by 12% year over year [21] - Cargo revenues grew by 10.2%, with notable performance during seasonal peaks [22] - Consolidated capacity measured in ASKs increased by 8.3%, with a 10.9% expansion in LATAM Airlines Brazil domestic operations [13][14] Market Data and Key Metrics Changes - LATAM transported over 20.5 million passengers, achieving a consolidated load factor of 83.5%, a 1.2 percentage point improvement year over year [4][15] - Domestic capacity across affiliates in Chile, Colombia, Ecuador, and Peru recorded a slight decline of 0.3% due to strategic reallocation of resources [14] - International passenger RASK remained nearly flat despite a 9.6% increase in capacity, indicating healthy demand dynamics [16] Company Strategy and Development Direction - LATAM Group is focused on strengthening its value proposition and enhancing customer experience through investments in product and technology [5][17] - The company is on track with its fleet plan, having incorporated 14 new aircraft in the first half of the year and expecting 12 more in the second half [10][30] - LATAM is analyzing opportunities for further growth, including potential acquisitions of additional aircraft to serve passenger and cargo traffic [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in current booking trends across domestic and international markets, reinforcing a positive outlook for the second half of the year [8][27] - The company has narrowed its full-year guidance, expecting adjusted operating margins between 14% and 15% and adjusted EBITDAR between $3.65 billion and $3.85 billion [28][27] - Management highlighted the strength of LATAM's diversified business model and its ability to adapt to shifting external conditions [8][7] Other Important Information - LATAM's liquidity at the end of the second quarter was $3.6 billion, equivalent to 27.2% of last twelve months revenues [25] - The company completed a refinancing of $800 million in senior secured notes, significantly reducing interest costs and generating annual savings of $33 million [26][30] - LATAM Group received multiple awards at the 2025 Skytrax World Airline Awards, reinforcing its position as the best airline in South America [6][20] Q&A Session Summary Question: Growth outlook and ASK growth - Management indicated solid demand across most markets and suggested a high single-digit growth prospect for 2026 based on the fleet plan [36][37] Question: Capital allocation and leverage - Management emphasized the importance of financial policy and performance in determining capital distribution to shareholders, with no immediate plans to increase dividends [41][42] Question: Cargo revenue performance - Management clarified that "other revenues" are minor and consist of various small income sources, with loyalty revenues included in passenger revenue [48][52] Question: Seasonal impact on profitability - Management acknowledged reduced seasonality impacts due to network diversification and growth in premium traffic revenue, which is less seasonal [56][58] Question: Capacity growth drivers - Management attributed capacity growth to timely aircraft deliveries, improved utilization, and the ability to adjust capacity across markets [67][70] Question: Cost efficiency opportunities - Management highlighted ongoing efforts to improve operational efficiency through technology and daily cost management practices [74][76]

Financial Data and Key Metrics Changes - LATAM Airlines Group reported total revenues of $3.3 billion, an increase of 8.2% year over year, driven by healthy demand in both passenger and cargo segments [20][6] - Adjusted EBITDA reached $850 million with a margin of 25.9%, reflecting a 5.5 percentage point improvement from the same period last year [6][22] - Net income for the quarter was $242 million, marking a 66% increase year over year, bringing first half net income to nearly $597 million [7][22] Business Line Data and Key Metrics Changes - Passenger revenues rose by 8.5%, while revenues from premium travelers increased by 12% year over year [20] - Cargo revenues grew by 10.2%, with notable performance during seasonal peaks [20][21] - Consolidated load factor reached 83.5%, a 1.2 percentage point improvement compared to the same period last year [13][6] Market Data and Key Metrics Changes - LATAM transported over 20.6 million passengers, a 7.6% year over year increase [13] - Domestic capacity across the group's affiliates in Chile, Colombia, Ecuador, and Peru recorded a slight decline of 0.3% due to strategic reallocation of resources [12] - International passenger revenue per available seat kilometer (RASK) remained stable despite a 9.6% increase in capacity, indicating healthy demand dynamics [15] Company Strategy and Development Direction - LATAM Group is focused on strengthening its value proposition and enhancing customer experience through investments in product and technology [5][16] - The company is on track with its fleet plan, having incorporated 14 new aircraft in the first half of the year and expecting to receive 12 more in the second half [32][8] - LATAM is analyzing opportunities for further growth, including potential acquisitions of additional aircraft to serve passenger and cargo markets [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand environment for the coming quarters, supported by solid booking trends across domestic and international markets [7][29] - The company has narrowed its full-year guidance, expecting adjusted EBITDAR between $3.65 billion and $3.85 billion, reflecting improved visibility for the year [30] - Management noted that the macroeconomic environment has become less uncertain, contributing to a positive outlook for the second half of the year [28][29] Other Important Information - LATAM Group maintained a strong capital structure with $3.6 billion in liquidity and an adjusted net leverage ratio of 1.6 times [26][27] - The company returned $445 million to shareholders through dividends and share repurchase programs during the quarter [25][31] - LATAM was recognized as the best airline in South America for the sixth consecutive year at the 2025 Skytrax World Airline Awards [5][19] Q&A Session Summary Question: Growth outlook and ASK growth - Management indicated solid demand in most markets and expects high single-digit growth prospects for 2026, supported by the fleet plan [36][39] Question: Capital allocation and leverage - Management stated that capital distribution decisions will be evaluated based on performance and liquidity, with no current barriers to propose further distributions [43][45] Question: Other revenue decline - Management clarified that "other revenues" amounted to $36 million, primarily from LatAm travel and other minor sources, which do not significantly impact overall results [50][52] Question: June quarter seasonality - Management acknowledged that while June has historically been challenging, the diversification of the network and growth in premium traffic revenue have mitigated seasonal impacts [56][61] Question: Guidance update and capacity growth - Management confirmed that capacity growth is supported by timely aircraft deliveries and strong demand, with a focus on balancing capacity across markets [66][72] Question: Cost efficiency opportunities - Management emphasized ongoing daily efforts to improve cost efficiency, particularly through technology and operational improvements [78][80]

Financial Performance - LATAM group recorded a net income of US$242 million in 2Q25, a 66.0% increase compared to 2Q24[6, 20] - Adjusted EBITDAR reached US$850 million in 2Q25, up 37.4% year-over-year, with a margin of 25.9%[6, 20] - The adjusted operating margin was a record 12.9% for the second quarter, a 3.9 percentage point increase compared to 2Q24[6, 20] - Revenues increased by 8.2% year-over-year, reaching US$3.279 billion in 2Q25[6, 20] - The company returned US$445 million to shareholders through dividends and share repurchases, representing 1.6% of outstanding shares[6, 40] Operational Highlights - LATAM transported over 20.5 million passengers in 2Q25[6] - Capacity grew by 8.3% year-over-year (ASK)[6] - Consolidated load factor reached 83.5%, a 1.2 percentage point increase compared to 2Q24[6, 8] Refinancing and Debt Management - LATAM successfully refinanced US$800 million of high-interest rate debt, reducing interest costs by over 570 basis points and unlocking annual savings of US$33 million[6, 32, 42] Customer Experience - Customer satisfaction (NPS) remained at a high of 56 points in 2Q25[6, 41] Fleet and Guidance - The company received 12 aircraft in 2Q25 (11 narrow-body + 1 wide-body)[6] - Updated 2025 full-year guidance reflects an improved outlook, with adjusted EBITDAR expected to be between US$3.65 billion and US$3.85 billion[6, 37]

Company Performance - LATAM (LTM) has returned approximately 50.3% since the beginning of the calendar year, significantly outperforming the Transportation sector, which has returned an average of -2.7% year-to-date [4] - The Zacks Consensus Estimate for LATAM's full-year earnings has increased by 28.8% over the past 90 days, indicating improved analyst sentiment and a more positive earnings outlook [3] Industry Context - LATAM is part of the Transportation - Airline industry, which consists of 25 individual companies and currently ranks 87 in the Zacks Industry Rank. The average gain for stocks in this group is 6.1% this year, highlighting LATAM's superior performance [5] - Another notable performer in the Transportation sector is Ryanair (RYAAY), which has returned 41.6% year-to-date and has a consensus EPS estimate that has increased by 9.2% over the past three months [4][5] Sector Ranking - The Transportation sector, which includes LATAM, is ranked 9 in the Zacks Sector Rank, which evaluates the strength of 16 individual sector groups based on the average Zacks Rank of the stocks within those groups [2]

Core Insights - LATAM Airlines Group reported a year-over-year increase in revenue passenger-kilometers (RPK) for June 2025, indicating growth in air traffic [1] Group 1: Capacity and Traffic - LATAM Airlines experienced a 10.7% year-over-year increase in consolidated capacity, measured in available seat-kilometers (ASK), driven by a 13.9% increase in domestic capacity in Brazil and a 12.3% increase in international capacity [2] - The consolidated traffic for LATAM Airlines increased by 10.2% year-over-year, although it did not outpace the capacity expansion, leading to a decrease in the consolidated load factor by 0.4 percentage points to 83.8% [4][11] - LATAM Airlines transported nearly 7 million passengers in June 2025, marking a 7.3% year-over-year increase, with a year-to-date total exceeding 41.5 million passengers [5][11] Group 2: Market Developments - New domestic routes were launched in Brazil from Aracaju to Congonhas and from Fortaleza to Juazeiro do Norte, along with an international connection between Bariloche in Argentina and Guarulhos in Brazil [3]

[Form 6-K Filing Overview](index=1&type=section&id=Form%206-K%20Filing%20Overview) This section provides an overview of LATAM Airlines Group S.A.'s Form 6-K filing, detailing administrative information and a material fact exhibit [Filing Details](index=1&type=section&id=Filing%20Details) This section outlines the administrative details of the Form 6-K filing by LATAM Airlines Group S.A., a foreign private issuer, indicating its compliance with SEC reporting requirements - LATAM Airlines Group S.A. filed a Form 6-K as a foreign private issuer[1](index=1&type=chunk) Filing Information | Detail | Value | | :----- | :---- | | Registrant Name | LATAM Airlines Group S.A. | | Commission File Number | 1-14728 | | Filing Type | Form 20-F | | Filing Date | June 2025 | [Exhibit 99.1 Material Fact](index=2&type=section&id=Exhibit%2099.1%20Material%20Fact) The Form 6-K includes Exhibit 99.1, which is identified as a 'Material Fact,' indicating the disclosure of significant information to investors Exhibit Details | Exhibit No. | Description | | :---------- | :---------- | | 99.1 | Material Fact | [Signatures](index=4&type=section&id=Signatures) This section confirms the official authorization and signatory details for the Form 6-K filing [Authorization and Signatory Details](index=4&type=section&id=Authorization%20and%20Signatory%20Details) This section confirms the due authorization and signing of the Form 6-K report by an authorized representative of LATAM Airlines Group S.A - The report was duly signed on behalf of LATAM Airlines Group S.A. by an authorized individual[6](index=6&type=chunk) Signatory Information | Detail | Value | | :----- | :---- | | Date | June 27, 2025 | | Name | Juan Carlos Menció | | Title | Legal and Compliance Vice President |

Core Insights - The article highlights the importance of the Zacks Rank system in identifying winning stocks through earnings estimates and revisions [1] - Value investing is emphasized as a popular strategy for finding undervalued stocks that offer profit potential [2] - The Style Scores system is introduced as a tool for investors to identify stocks with specific traits, particularly in the "Value" category [3] Company Analysis: Japan Airlines (JAPSY) - Japan Airlines has a Zacks Rank of 1 (Strong Buy) and an A for Value, indicating strong investment potential [4] - The stock's current P/E ratio is 8.22, significantly lower than the industry average of 10.57, suggesting it may be undervalued [4] - JAPSY's P/B ratio is 1.26, compared to the industry's average of 3.15, further indicating attractive valuation [5] - The P/CF ratio for JAPSY is 4.88, which is lower than the industry average of 6.56, highlighting its strong cash flow outlook [6] Company Analysis: LATAM Airlines Group (LTM) - LATAM Airlines Group also holds a Zacks Rank of 1 (Strong Buy) and an A for Value, making it another strong candidate for value investors [7] - The Forward P/E ratio for LATAM is 8.46, which is favorable compared to the industry average of 10.57, indicating potential undervaluation [7] - The PEG ratio for LATAM is 0.57, significantly lower than the industry average of 1.00, suggesting strong growth potential relative to its valuation [7] - LATAM's P/B ratio is 12.23, which is much higher than the industry average of 3.15, indicating a different valuation perspective [8] Investment Outlook - Both Japan Airlines and LATAM Airlines Group are identified as likely undervalued stocks based on their financial metrics and earnings outlook [9]

Company Overview - Flex LNG (FLNG) is currently ranked 1 (Strong Buy) in the Zacks Rank system, indicating strong analyst sentiment and an improving earnings outlook [3] - The Zacks Consensus Estimate for FLNG's full-year earnings has increased by 12.1% over the past three months, reflecting positive revisions in earnings estimates [3] Performance Comparison - Year-to-date, Flex LNG has gained approximately 6.4%, outperforming the average loss of 7.8% in the Transportation sector [4] - In comparison, LATAM (LTM), another outperforming stock in the Transportation sector, has returned 37.8% year-to-date [4] Industry Context - Flex LNG is part of the Transportation - Shipping industry, which consists of 36 companies and currently holds a Zacks Industry Rank of 186, with an average gain of 0.5% this year [5] - In contrast, LATAM belongs to the Transportation - Airline industry, which has seen a decline of 10.7% this year and is ranked 57 [6]

Group 1 - The analyst has over 20 years of experience covering airlines, specifically LATAM Airlines (NYSE: LTM), and anticipated that many airlines would seek Chapter 11 protection during the Covid pandemic due to high debt and fixed costs impacting cash flow [1] - The analyst has a diverse background in analyzing various industries including airlines, oil, retail, mining, fintech, and e-commerce, along with macroeconomic, monetary, and political factors [1] - The analyst has lived through multiple crises, including the tequila crisis, the dot-com bubble, 9/11, the Great Recession, and the Covid-19 pandemic, which has contributed to a robust base of experience applicable across multiple disciplines [1] Group 2 - The analyst holds a beneficial long position in the shares of LTM through stock ownership, options, or other derivatives, indicating a personal investment in the company [2] - The article expresses the analyst's own opinions and is not influenced by compensation from any company mentioned [2]