Azul(US:AZUL)2023-05-15 23:00Financial Data and Key Metrics Changes - Revenue reached an all-time record of BRL 4.5 billion with an EBITDA of over BRL 1 billion, a 74% increase year-over-year despite a 24% rise in fuel prices [10][11] - EBITDA margin for the quarter was 23%, with an operating result of BRL 460 million and an operating margin of BRL 10.3 million [10][11] - RASK (Revenue per Available Seat Kilometer) increased by 23% year-over-year, reaching BRL 0.4147, with a 28% increase in the domestic market [11][12] Business Line Data and Key Metrics Changes - TudoAzul, the loyalty program, more than doubled its gross billings since 2019, benefiting from expanded presence in Congonhas [6] - Azul Viagens grew four times in gross billings compared to pre-pandemic levels, becoming the second-largest vacation agency in Brazil [7] - Azul Cargo almost tripled since 2019, maintaining a 33% market share as the largest air logistics provider in Brazil [7] Market Data and Key Metrics Changes - The company served 158 destinations and holds a leadership position in 93% of its routes [5] - The launch of nonstop service to Paris attracted over 30% first-time customers, indicating strong market expansion potential [6] Company Strategy and Development Direction - The company is focused on optimizing its capital structure and improving cash flow through a comprehensive restructuring plan [15][16] - The introduction of Azul TecOps aims to leverage the company's expertise in heavy maintenance, addressing global AMR capacity challenges [7] - The fleet transformation program is expected to enhance operational efficiency and profitability, with a commitment to maintaining capacity discipline [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving BRL 5.5 billion EBITDA for 2023, the highest in the company's history, supported by lower fuel prices and strong seasonality [12][14] - The restructuring plan is designed to ensure fair treatment for all stakeholders while significantly reducing lease payments and improving cash flow [16][17] - Management highlighted the importance of maintaining a competitive edge through a fuel-efficient fleet and disciplined capacity growth [13][14] Other Important Information - The company expects to be free cash flow breakeven in 2023 and generate positive free cash flow in 2024 [17] - The restructuring agreements with lessors and OEMs are expected to reduce annual lease payments by approximately BRL 1 billion [17][18] Q&A Session Summary Question: Confirmation on restructuring details and international traffic growth - Management confirmed that options for non-conversion of shares include issuing additional shares, new notes, or cash, with negotiations expected [27][28] - International traffic growth will be supported by existing routes rather than new markets, with a total ASK growth of 14% anticipated [30] Question: Details on non-recurring items and lessor agreements - The majority of the BRL 300 million non-recurring items are related to fleet adjustments, with expectations for reversals in future agreements [34][35] - Management clarified that the lessor agreements are being fine-tuned, with ongoing discussions with bondholders [39][40] Question: Fleet commitment and stock price conditions - The fleet commitment remains unchanged, with expectations for stable growth and the ability to accelerate deliveries if market conditions improve [48][49] - The equity instrument's conditions vary based on stock performance, with management confident in achieving the BRL 36 target [51][52] Question: Leasing payments and cash flow estimates - Management indicated that while leasing payments will initially appear higher, they will decrease significantly in subsequent years due to negotiations with lessors [58][60] - Positive cash flow is expected in 2024 and beyond, with breakeven anticipated for 2023 [62]