Azul(US:AZUL)2022-02-24 23:03Financial Data and Key Metrics Changes - The company achieved a record net revenue of BRL 3.7 billion in Q4 2021, surpassing pre-pandemic levels by 15% compared to Q4 2019 and more than doubling Q4 2020 revenue [7][12] - EBITDA for the quarter exceeded BRL 1 billion, with an operating income of BRL 525 million, representing a margin of 14.1% and an EBITDA margin of 27.5% [8][14] - CASK reached 33.91 cents, up 33% compared to Q4 2019, primarily due to a 51% increase in jet fuel prices and currency depreciation [13] Business Line Data and Key Metrics Changes - Azul Cargo generated BRL 1.1 billion in net revenue in 2021, significantly surpassing the target to double cargo revenue compared to 2019 [15] - The loyalty program, Tudo Azul, saw a 34% increase in gross billings in Q4 2021 compared to Q4 2019, with nearly 14 million members [16] - Azul Viagens, the vacation business, sold nearly 30% more travel packages in 2021 compared to 2019, leveraging the unique network and fleet flexibility [17] Market Data and Key Metrics Changes - The domestic market showed over 100% recovery in leisure travel, while corporate recovery was around 70% of 2019 levels, with small and medium businesses exceeding 100% recovery [22][24] - The company is now flying to almost 150 destinations, adding more than 30 destinations since 2019, indicating significant market expansion [10] Company Strategy and Development Direction - The company is focused on fleet transformation to reduce fuel consumption and unit costs, having already achieved a 20% reduction in fuel consumption per ASK since the transformation began [11][13] - The strategy includes maintaining a disciplined approach to capacity deployment and fare management to enhance profitability [12][20] - The company aims to leverage its logistics and loyalty businesses for margin expansion, with a strong emphasis on sustainable development and ESG commitments [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of corporate and international demand, anticipating exciting opportunities in passenger loyalty and logistics businesses [20] - The company acknowledged challenges from rising fuel prices and currency fluctuations but emphasized its ability to pass through cost increases to fares [28][40] - Management remains optimistic about the resilience of the Brazilian market, expecting a strong recovery post-Omicron [25] Other Important Information - The company ended Q4 2021 with immediate liquidity of BRL 4.1 billion, up 41% compared to the same period in 2019, ensuring a strong cash position for future opportunities [18] - The company has been included in the corporate sustainability index of the B3 Stock Exchange, highlighting its commitment to ESG initiatives [19] Q&A Session Summary Question: Can you provide more granularity on the domestic market in terms of leisure and business before and after Omicron? - The domestic market saw leisure travel over 100% recovery, corporate recovery at around 70%, and small-medium businesses exceeding 100% recovery, with average fares significantly higher than 2019 levels [22][24] Question: How many F-Class freighters does the company plan to add to the fleet? - Currently, there are four F-Class freighters, with plans to add more as the company showcases them to potential customers [26][27] Question: What can be expected for yields in 2022 and the ability to pass through higher fuel prices to customers? - The company expects to continue recovering yields, with corporate fares significantly higher than 2019 levels, and anticipates a disciplined market response to rising fuel prices [28][30] Question: What are the assumptions behind the $4 billion EBITDA guidance for 2022? - The company remains confident in achieving the $4 billion EBITDA target, despite recent volatility, and emphasizes the importance of managing fuel and FX costs together [35][40] Question: What is the CapEx estimate for 2022 and 2023? - The recurrent level of CapEx is expected to be around BRL 1.5 billion, similar to 2019 levels, with flexibility to adjust based on demand and currency fluctuations [74][75]