LATAM(LTMAY) - 2023 Q4 - Annual Report

Financial Performance - LATAM Airlines reported a revenue of US$11,640,541 thousand for the year ended December 31, 2023, representing a 24.3% increase from US$9,362,521 thousand in 2022[10]. - The gross margin improved significantly to US$2,823,951 thousand in 2023, compared to US$1,259,038 thousand in the previous year, indicating a gross margin increase of 124%[10]. - Net income for the year was US$581,550 thousand, a decrease of 56.5% from US$1,337,137 thousand in 2022[11]. - For the year ended December 31, 2023, LATAM Airlines reported proceeds from sales of goods and services amounting to ThUS$ 13,397,385, an increase of 27.4% compared to ThUS$ 10,549,542 in 2022[17]. - The net cash inflow from operating activities for 2023 was ThUS$ 2,263,568, a significant increase from ThUS$ 96,797 in the previous year[17]. Assets and Liabilities - Total assets increased to US$14,667,315 thousand as of December 31, 2023, up from US$13,211,024 thousand in 2022, marking a growth of 11%[6]. - Current liabilities rose to US$5,688,135 thousand in 2023, compared to US$5,088,695 thousand in 2022, reflecting an increase of 11.8%[8]. - Non-current liabilities also increased to US$8,540,905 thousand in 2023, up from US$8,091,608 thousand in 2022, which is a rise of 5.5%[8]. - LATAM's total cash and cash equivalents at the end of 2023 reached ThUS$ 1,714,761, up from ThUS$ 1,216,675 at the end of 2022, reflecting a growth of 40.9%[17]. Equity and Shareholder Transactions - LATAM Airlines' total equity increased to US$438,275 thousand in 2023, compared to US$30,721 thousand in 2022, indicating a significant recovery in equity[8]. - The company declared dividends totaling ThUS$ 174,549 during the reporting period[13]. - The total increase in equity from transactions with shareholders was ThUS$ 3,000, reflecting contributions from owners[13]. - The company issued equity amounting to ThUS$ 800,000 during the year[15]. Foreign Exchange and Hedging - The company experienced a foreign exchange gain of US$85,891 thousand in 2023, compared to a gain of US$25,993 thousand in 2022, reflecting improved currency management[10]. - LATAM Airlines Group S.A. recognized gains of US$15.7 million for fuel hedging net of premiums in the costs of sales for the year ended December 31, 2023, compared to US$18.8 million for the previous year[159]. - The Company recognized losses of $10.1 million for FX hedging derivatives net of premiums as of December 31, 2023, compared to gains of $5.2 million at the end of December 2022[171]. Employee and Workforce - LATAM's average number of employees in 2023 was 34,174, with a total of 35,568 employees at year-end, indicating a workforce increase of approximately 4.1%[24]. Debt and Financing - The Company received an infusion of approximately US$8.19 billion through a mix of new equity, convertible notes, and debt to exit Chapter 11 proceedings[42]. - Total debt upon emergence from Chapter 11 was approximately US$6.8 billion, with cash and cash equivalents of approximately US$1.1 billion[42]. - The Company raised up to US$500 million through a new revolving credit facility and approximately US$2.25 billion in total new money debt financing through exit financing[49]. Accounting and Financial Reporting - LATAM Airlines Group S.A. has implemented critical accounting estimates and judgments in preparing its consolidated financial statements, adhering to IFRS standards[37]. - The Company’s functional currency is the United States Dollar, which is also the presentation currency of its consolidated financial statements[63]. - The company applies the simplified approach for expected credit losses on trade receivables, recognizing lifetime losses upon initial recognition[103]. Market Risks - LATAM Airlines Group S.A. is exposed to market risks including fuel-price risk, exchange-rate risk, and interest-rate risk, and has developed strategies to mitigate these risks[155][156]. - A 10% appreciation of the R$/US$ exchange rate would negatively impact the income statement by $6.6 million for the year ended December 31, 2023[177]. - The sensitivity analysis indicates that a 100 basis point increase in the SOFR rate would result in a loss of $20.27 million before taxes as of December 31, 2023[188].