SÃO PAULO, April 7, 2020
/PRNewswire/ -- GOL Linhas Aéreas Inteligentes S.A. (NYSE: GOL
and B3: GOLL4), Brazil's
premier domestic airline, provides its Investor Update.
The information below for the quarter ended in March 2020 is preliminary and unaudited.
Overall
Commentary
|
- GOL expects
Earnings Per Share (EPS) and Earnings Per American Depositary Share
(EPADS) for 1Q20 of approximately R$0.251 and
US$0.101, respectively.
- EBITDA2,3 margin for the first quarter is
expected to be 44% to 46%, an increase in relation to the quarter
ended in March 2019 (29.7%2).
- Passenger unit
revenue (PRASK) for the first quarter is expected to be down
approximately 1% year-over-year. GOL expects unit revenue (RASK) to
be in line with 1Q19.
- Non-fuel unit costs
(CASK ex-fuel) are expected to decrease by approximately
23%2,3 compared to 1Q19, primarily due to
increased productivity (aircraft utilization and operating
efficiency), partially offset by increased depreciation from nine
(net) additional aircraft in the fleet. Fuel unit costs (CASK fuel)
are expected to increase by approximately 3% year-over-year,
negatively impacted by a 3% increase in the average fuel price,
partially offset by a 10% reduction in fuel consumption per flight
hour primarily due to an increase in utilization of 737-700s during
March 2020.
- GOL's financial
leverage, as measured by the Net Debt4/LTM EBITDA ratio,
was approximately 2.8x at the end of the March 2020 quarter. The
Company amortized approximately R$490 million of debt in the
quarter, and total liquidity was at R$4.3 billion, comprised of
R$3.0 billion in cash and investments and R$1.3 billion in
receivables. And including R$1.7 billion of prepaid expenses,
maintenance reserves and security deposits, liquidity totaled
around R$6 billion.
|
Preliminary and
Unaudited Projections
|
EBITDA Margin2,3
EBIT
Margin2,3
Other Revenue (cargo,
loyalty, other)
Average fuel price
per liter
Average exchange
rate
Passenger unit revenue (PRASK)
CASK
Ex-fuel2,3
Total Demand –
RPK
Total Capacity –
ASK
Total Capacity –
Seats
|
1Q20
44%
- 46%
27% -
29%
6% of total net
revenues
R$2.78
- R$2.84
R$4.45
1Q20 vs.
1Q19
Down ~1%
Down ~23%
Down ~7%
Down ~4%
Down
~3%
|
1. Excluding gains and losses on currency and
Exchangeable Senior Notes.
2. Excluding non-recurring expenses of
approximately R$41 million in 1Q19
and R$159 million in 1Q20.
3. Including net results of approximately
R$595 million related to aircraft
sales in 1Q20.
4. Excluding perpetual notes and Exchangeable
Senior Notes.
Recent
Developments and Considerations for the Next 90 Days
|
Recent
Developments
The Covid-19 pandemic
began affecting GOL's operations in mid-March 2020, and, therefore
had a limited effect on first quarter performance. Due to the
Covid-19 pandemic related shutdown in Brazil and to prepare for a
reduction in demand and revenues, GOL took measures to preserve
cash for the next 90 days through cost reductions, new payment
terms, and rollovers. Below is a summary of the Company's main
initiatives:
- Fixed cost
reductions: (i) 50% reduction in payroll through several
compensation and deferral initiatives (number of hours, extra
hours, unpaid leave, unpaid vacation, suspension of profit sharing
payments, tax deferrals and wage cuts of 35% for all employees and
40% for the top 30 executives); and (ii) grace period of six months
and deferral of lease payments for the same period with aircraft
lessors;
- Variable cost
reductions from the 93% reduction in supply measured in ASK and:
(i) deferral of all fuel payments to installments to be paid after
September 30, 2020; (ii) suspension of navigation fees and public
airports fees; (iii) suspension of all projects and investments for
180 days; (iv) extension of payment terms for engine maintenance by
up to 90-180 days; (v) extension of Capex payment terms by up to
90-180 days; and (vi) elimination of PDPs for the next 12
months;
- Government support:
taxes and fees suspended for 2Q20; and
- Financial costs and
payments: (i) rollover of existing local bank short-term maturities
with local banks and increased credit limits to maintain all
existing working capital lines (increased to incorporate the
depreciated Brazilian real); and (ii) extension of the quarter's
R$156 million local debentures amortization to 2022 (all covenant
waivers have been approved by debenture holders).
Considerations for
the Next 90 Days
In support of the
Brazilian Government's actions to prevent the spread of the
Covid-19 virus, which since mid-March have included widespread
flight bans and travel restrictions that closed most of Brazil's
skies to air traffic, GOL reduced its flight offer to an essential
network of 50 daily flights between the São Paulo International
Airport in Guarulhos (GRU) and the 26 State capitals of Brazil and
the city of Brasília. GOL continues to work with the Brazilian
Government to maintain minimum flight links for emergency reasons,
and to operate rescue and medical flights when requested to do
so.
Due to this reduction
in capacity, during the second half of March we removed 120
aircraft from operations. GOL expects to maintain the majority of
its fleet on the ground during April and May. We therefore expect
to record ineffectiveness on our fuel hedges as an exceptional item
in our 1Q20 and 2Q20 financial results. We currently estimate that
this will amount to an extraordinary financial expense of
approximately R$80 million in 1Q20 and R$200 million in
2Q20.
GOL has a solid
balance sheet and total liquidity was R$4.3 billion on March 31,
2020. Liquidity totaled around R$6 billion including R$1.7 billion
of prepaid expenses, maintenance reserves and security deposits.
Additionally, the Company owns approximately R$1.5 billion of
assets unencumbered and debt free.
We are grateful to
the Government of Brazil for its foresight and speed of response in
recognizing Brazilian airlines' exposure to the Covid-19 pandemic,
as our operations fall under the necessary Government restrictions
to stop the pandemic. We further support the governmental actions
to offset, at least partially, the impact of Covid-19 on the
passenger transportation industry.
Given the continued
uncertainty about the impact and duration of the Covid-19 pandemic,
GOL is suspending its 2020 and 2021 guidance until the operating
environment returns to normal. In the meantime, GOL will continue
to focus on delivering cost savings, protecting jobs, working with
the Brazilian Government, and preparing for the return to normal
service in due course.
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About GOL Linhas Aéreas Inteligentes S.A.
GOL
serves more than 37 million passengers annually. With Brazil's largest network, GOL offers
customers more than 750 daily flights to over 100 destinations in
Brazil and in South America, the Caribbean and the
United States. GOLLOG's cargo transportation and
logistics business serves more than 3,400 Brazilian municipalities
and more than 200 international destinations in 95 countries.
SMILES allows over 16 million registered clients to
accumulate miles and redeem tickets to more than 700 destinations
worldwide on the GOL partner network. Headquartered in São Paulo,
GOL has a team of approximately 16,000 highly skilled aviation
professionals and operates a fleet of 137 Boeing 737 aircraft,
delivering Brazil's top on-time
performance and an industry leading 19-year safety record. GOL has
invested billions of Reais in facilities, products and services and
technology to enhance the customer experience in the air and on the
ground. GOL's shares are traded on the NYSE (GOL) and the B3
(GOLL4). For further information, visit www.voegol.com.br/ir.
Disclaimer
The information contained in this press
release has not been subject to any independent audit or review and
contains "forward-looking" statements, estimates and projections
that relate to future events, which are, by their nature, subject
to significant risks and uncertainties. All statements other than
statements of historical fact contained in this press release
including, without limitation, those regarding GOL's future
financial position and results of operations, strategy, plans,
objectives, goals and targets, future developments in the markets
in which GOL operates or is seeking to operate, and any statements
preceded by, followed by or that include the words "believe",
"expect", "aim", "intend", "will", "may", "project", "estimate",
"anticipate", "predict", "seek", "should" or similar words or
expressions, are forward-looking statements. The future events
referred to in these forward-looking statements involve known and
unknown risks, uncertainties, contingencies and other factors, many
of which are beyond GOL's control, that may cause actual results,
performance or events to differ materially from those expressed or
implied in these statements. These forward-looking statements are
based on numerous assumptions regarding GOL's present and future
business strategies and the environment in which GOL will operate
in the future and are not a guarantee of future performance. Such
forward-looking statements speak only as at the date on which they
are made. None of GOL or any of its affiliates, officers,
directors, employees and agents undertakes any duty or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except to
the extent required by law. None of GOL or any of its affiliates,
officers, directors, employees, professional advisors and agents
make any representation, warranty or prediction that the results
anticipated by such forward-looking statements will be achieved,
and such forward-looking statements represent, in each case, only
one of many possible scenarios and should not be viewed as the most
likely or standard scenario. Although GOL believes that the
estimates and projections in these forward-looking statements are
reasonable, they may prove materially incorrect and actual results
may materially differ. As a result, you should not rely on these
forward-looking statements.
Non-GAAP Measures
To be consistent with industry
practice, we disclose so-called non-GAAP financial measures which
are not recognized under IFRS or U.S. GAAP, including "Net Debt",
"Adjusted Net Debt", "total liquidity" and "EBITDA". Our management
believes that disclosure of non-GAAP measures provides useful
information to investors, financial analysts and the public in
their review of our operating performance and their comparison of
our operating performance to the operating performance of other
companies in the same industry and other industries. However, these
non-GAAP items do not have standardized meanings and may not be
directly comparable to similarly-titled items adopted by other
companies. Potential investors should not rely on information not
recognized under IFRS as a substitute for the GAAP measures of
earnings or liquidity in making an investment decision.
Investor Relations
ri@voegol.com.br
www.voegol.com.br/ir
+55(11) 2128-4700
Media Relations
Becky
Nye, Montieth & Company
bnye@montiethco.com
+1 646 864 3517
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SOURCE GOL Linhas Aéreas Inteligentes S.A.