Fourth Quarter 2019 Results Presentation
March 4, 2020
Full Year 2019 Highlights
Operations & Network
- 74 million passengers, +5 million YoY
- 26 new routes in 2019
- Most punctual airline group in the world
- CASK ex-fuel stable at 4.5 cents
Commercial Agreements
- Framework Agreement with Delta
- US$1.1bn reduction in fleet commitments 2020-2022
- New codeshare partners, leaving oneworld on May 1, 2020
Customer Experience
- Focus of investments in passengers
- Acquisition of Multiplus
- New cabins (A320, A321, B767, B777)
- "Best Airline in South America"1
Financial position
- EBIT 7.1% / Net income US$190 million
- US$1.1bn cash flow after investments2
- Leverage 4.0x (from 4.2x in September)
- US$2.1 bn liquidity (20% LTM Revenues)
1Skytrax World Airline Awards and APEX Passenger Choice awards | 2 |
2Cash flow from operating activities - Cash flow used in investing activities - Payments for changes in ownership interests in subsidiaries (Multiplus) |
Fourth Quarter 2019 Financial Summary
(US$ Millions) | 4Q19 | 4Q18 | Change | FY19 | FY18 | Change | |
Total Operating Revenues | 2,871 | 2,788 | 3.0% | 10,431 | 10,368 | 0.6% |
Passenger | 2,478 | 2,327 | 6.5% | 9,006 | 8,709 | 3.4% |
Cargo | 280 | 312 | -10.3% | 1,064 | 1,186 | -10.3% |
Others | 113 | 149 | -24.2% | 361 | 473 | -23.7% |
Total Operating Costs | -2,520 | -2,445 | 3.1% | -9,689 | -9,481 | 2.2% |
Fuel | -744 | -832 | -10.6% | -2,929 | -2,983 | -1.8% |
Ex-fuel | -1,776 | -1,613 | 10.1% | -6,760 | -6,498 | 4.0% |
Operating Income | 350 | 343 | 2.1% | 742 | 887 | -16.4% |
Operating Margin | 12.2% | 12.3% | -0.1 p.p. | 7.1% | 8.6% | -1.4 p.p. |
Net Income | 227 | 390 | -41.8% | 190 | 310 | -38.5% |
EBITDA | 741 | 685 | 8.1% | 2,212 | 2,260 | -2.1% |
EBITDA Margin | 25.8% | 24.6% | 1.2 p.p. | 21.2% | 21.8% | -0.6 p.p. |
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Fourth Quarter 2019 Operating Statistics
% YoY | System Capacity | Capacity | Traffic | Load Factor | RASK/RATK (USc) | 1 |
(ASK) | (RPK) | |||||
(% YoY) | ||||||
International
(Long Haul & Regional) | 51% |
Domestic Brazil
30%
19%
SSC Domestic
-5.4% | -5.2% | 83.2% | 6.0 |
(+0.2 p.p.) | (+4.6%) | ||
BRL | |||
4Q19: +13.0% | |||
+17.7% | +20.0% | 85.2% | 7.1 |
(+1.7 p.p.) | (+5.9%) | ||
+9.0% | +3.8% | 78.3% | 6.6 |
(-3.9 p.p.) | (-4.7%) |
Passenger | +3.2% | +3.0% | 82.9% | 6.5 | |
(-0.2 p.p.) | (+3.1%) | ||||
Cargo2 | +0.6% | -0.6% | 56.4% | 17.1 | |
(-0.7 p.p.) | (-8.7%) | ||||
1 | RASK by business unit includes ticket revenue, breakage, frequent flyer program contribution and ancillary revenues | 4 | |||
2 | Excluding the sale of MasAir |
Revenues by point of sale last twelve months evolution
Full year 2018 | Full year 2019 | |||||||||||||
Peru | Colombia | Ecuador | Peru | Colombia | Ecuador | |||||||||
4% | 2% | 4% | 2% | |||||||||||
7% | 8% | |||||||||||||
Europe | Europe | |||||||||||||
8% | Brazil | 7% | ||||||||||||
35% | Brazil | |||||||||||||
Others | Others | 39% | ||||||||||||
8% | 9% | |||||||||||||
Argentina | ||||||||||||||
10% | Chile | Argentina | USA | |||||||||||
USA | 6% | Chile | ||||||||||||
10% | ||||||||||||||
16% | ||||||||||||||
10% | 15% | |||||||||||||
+2% | ||||||||||||||
Passenger + Cargo revenues = US$9,895 million | Passenger + Cargo revenues = US$10,070 million | |||||||||||||
Source: Financial statements as of December 2019 | 5 |
Cost per ASK fell by 0.1% YoY in fourth quarter
Passenger ASK (millions) | Number of Passengers (thousands) | Number of employees per | |||||||||||||||||||||
+3.2% | +9.4% | operating aircraft | |||||||||||||||||||||
-8 FTE/aircraft | |||||||||||||||||||||||
38.405 | 19.946 | ||||||||||||||||||||||
37.207 | 18.232 | ||||||||||||||||||||||
133 | |||||||||||||||||||||||
125 | |||||||||||||||||||||||
4Q18 | 4Q19 | 4Q18 | 4Q19 | 4Q18 | 4Q19 | ||||||||||||||||||
Total Costs US$MM | 4Q19 | 4Q18 | Change | ||||||||||||||||||||
Fuel Cost | 744 | 832 | -10.6% | ||||||||||||||||||||
Wages & Benefits | 440 | 466 | -5.7% | ||||||||||||||||||||
Fleet Cost | 519 | 419 | +23.9% | ||||||||||||||||||||
Others | 818 | 728 | +12.4% | ||||||||||||||||||||
Operating Costs | 2,520 | 2,445 | +3.1% | ||||||||||||||||||||
CASK(US cents) | 6.6 | 6.6 | -0.1% | ||||||||||||||||||||
CASK ex-fuel (US cents) | 4.6 | 4.3 | +6.7% |
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LATAM adjusts its fleet commitments for 2020-2022
Fleet commitments
US$ million
Previous Plan (March 2019)
# aircraft deliveries
11 | 15 | 12 |
1.118 | 990 |
708 |
2020 | 2021 | 2022 | ||||||||
Current Plan | 5 | 12 | 11 | |||||||
(March 2020) | ||||||||||
773 | US$1.1bn | |||||||||
408 | 574 | reduction | ||||||||
2020 | 2021 | 2022 | ||||||||
Subject to execution of the related contract documentation with manufacturers | 7 |
Continued investing in transforming the customer experience
New cabins | Self-Bag Drop | |
New VIP Lounge in MIA | New Premium Economy | |
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Fourth quarter 2019 credit metrics
Net Debt / EBITDA LTM
4,2x | 4,0x |
3.0323.172
7.4857.194
Sep 19 | Dic 19 | |
Financial Debt (US$ MM) | Lease liabilities (US$ MM) | |
Net Debt / EBITDA |
Cash and Equivalents as % of LTM revenues
19,3% | 19,7% | |||||||||
1.992 | 2.059 | |||||||||
600 | 600 | |||||||||
1.459 | ||||||||||
1.392 | ||||||||||
Sep 19 | Dic 19 | |||||||||
Cash (US$ MM) | Committed Lines & RCF (US$ MM) | |||||||||
Fuel Hedge (% consumption) | Cost of debt as of December 31, 2019 | ||||||||||||
PDP | |||||||||||||
Banks 4.6% | |||||||||||||
3.6% | |||||||||||||
65% | 81% | Bonds | Fleet | WACD | |||||||||
56% | 49% | 3.7% | 4.6% | ||||||||||
6.8% | |||||||||||||
4Q19 | 1Q20 | 2Q20 | 3Q20 | ||||||||||
Source: Financial Statements | 9 |
Guidance 2020
Guidance 2020 | |||
Passenger (ASK) | International | 0% - 2% | |
Domestic Brazil | 7% - 9% |
Domestic Spanish | 6% - 8% | |
Speaking Countries | ||
Total | 3% - 5% | |
Cargo (ATK) | 4% - 6% | |
Operating Margin (%) | 7% - 8.5% | |
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Fourth Quarter 2019 Results Presentation
March 4, 2020
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LATAM Airlines Group SA published this content on 04 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 March 2020 13:32:04 UTC