GOL Linhas Aéreas Inteligentes S.A. ("GOL" or "Company") (NYSE: GOL and B3: GOLL4), Brazil's largest domestic airline by market share, today announces its consolidated results for the fourth quarter of 2019 (4Q19).
All information is presented in Brazilian Reais (R$), in accordance with international accounting standards (IFRS), and comparisons are with the fourth quarter 2018, unless stated otherwise.
- Net revenue was R$3.8 billion, the highest ever recorded by the Company, an increase of 18.8% compared to 4Q18.
- EBITDA margin was 38.5% in 4Q19, an increase of 22.2 p.p. quarter-over-quarter. GOL's 2020 EBIT margin and EBITDA margin guidance is approximately 19% and 30%, respectively.
- Revenue Passenger Kilometer (RPK) increased 5.5% totaling 10.8 billion in 4Q19, driven by 8.0% growth in the number of transported passengers.
- GOL transported approximately 9.7 million customers during the quarter, a growth of 8.0% over the same period last year, and achieved a 38% market share in the Brazilian domestic market, according to ANAC. According to Abracorp, 38% of passengers in the corporate segment travelled on GOL, what makes the Company the leader in corporate sales and tickets issued.
- The Company returned R$800.0 million of cash to capital partners in the fourth quarter, mainly comprised of R$617.1 million of debt repayments, R$50.2 million of interest on own capital and R$102.4 million of share repurchases.
Strong operating indicators:
Revenue Passenger Kilometer (RPK) increased 5.5% totaling 10.8 billion in 4Q19. driven by 8.0% growth in the number of transported passengers. Strong passenger demand and dynamic revenue management enabled GOL to offset the increase in operating unit costs. The Company achieved:
Average yield per passenger of 33.17 cents (R$), an increase of 13.8% compared to 4Q18;
Average load factor of 81.5%, a reduction 0.4 p.p. quarter-over-quarter;
Average aircraft utilization of 12.2 hours/day, an increase of 6.1% quarter-over-quarter;
Flight completion of 99.2% in 4Q19, an increase of 0.6 p.p., according to Infraero and data from major airports.
Net revenue was R$3.8 billion, the highest for a quarter ever recorded by the Company, and an increase of 18.8% over 4Q18. GOL carried 9.7 million customers in the quarter, with 9.2 million in the domestic market (+9.5% over 4Q18) and 0.5 million in the international market. Net Revenue per Available Seat Kilometer (RASK) was 28.69 cents (R$) in 4Q19, an increase of 12.1% over 4Q18. Net Passenger Revenue per Available Seat Kilometer (PRASK) was 27.04 cents (R$) in 4Q19, an increase of 13.3% over 4Q18. The net revenue guidance for 2020 is approximately R$15.4 billion.
Unit costs based on Cost per Available Seat Kilometer (CASK), excluding non-recurring expenses, decreased by 12.8%, from 24.19 cents (R$) in 4Q18 to 21.10 cents (R$), partially impacted by 17% decrease in the average fuel price and a 2% reduction in fuel consumption per flight hour. Fuel costs per ASK decreased 15.6%, mainly due to a reduction of fuel taxes. CASK ex-fuel, excluding non-recurring expenses, increased by 11.1% primarily due to increased productivity (operating efficiency, aircraft utilization and increase in ASKs), and a reduction in aircraft maintenance expenses due to a decrease in aircraft returns in the 4Q19, partially compensated by:
A 32.6% increase in depreciation due to the addition of 16 aircraft in the fleet and a reduction in the depreciable life of capitalized engine maintenance and large components; and
A 23.8% growth in personnel expenses, mainly due to an increase in the federal payroll tax rate to 20%, and the hiring and training of 819 new employees due to the expansion of operations, new routes and new bases.
GOL has the lowest unit costs in its markets. The Company estimates first quarter 2020 recurring CASK ex-fuel to increase by approximately 4% to 6%, year-over-year.
Due to strong cost control and yield management, the Company achieved operating profits for the 14th consecutive quarter. Recurring operating income (EBIT) was R$1,006.3 million in the quarter and R$2,645.0 million in 2019; R$830.0 million and R$1,601.1 million higher than in 4Q18 and 2018, respectively. Recurring EBITDA margin was 38.5% in the period, an increase of 22.2 p.p. quarter-over-quarter.
Balance sheet strengthening:
GOL reported operating cash flow generation of approximately R$1.0 billion in the quarter. Total liquidity was R$4.3 billion, R$238.4 million higher in comparison to September 30, 2019 and R$1.3 billion higher than December 31, 2018. In 4Q19, the Company repaid R$617.1 million in principal debt and leasing payments, R$50.2 million of interest on own capital and repurchased R$102.4 million of shares. The net exchange and monetary variation gains in the quarter totaled R$372.4 million. Net debt (excluding Perpetual Notes and Exchangeable Notes) to LTM EBITDA was 2.4x as of December 31, 2019.
Earnings per diluted share excludes results from (i) exchange variation, net; (ii) Exchangeable Senior Notes and capped calls; and (iii) non-recurring expenses, net.