LATAM Raises 2023 Guidance to US$2.35-2.5b Adjusted EBITDAR and Double-Digit Margin for FY 2023 on the Back of Strong Second Quarter Results
Santiago, August 2, 2023. LATAM announced today its financial results for the second quarter of the year, maintaining the positive trend of recent months. At the end of said period, LATAM reported a net profit of US$145 million mainly explained by higher revenues from the passenger segment and lower fuel prices during the quarter. At the end of the first half of 2023, LATAM Airlines Group recorded a net profit of US$267 million.
During the second quarter, operating revenues reached US$2,676 million, 20.2% more than in the same quarter last year, while adjusted operating expenses were US$2,405 million, resulting in an adjusted operating margin of 10.1% for the quarter.
The CFO of LATAM Airlines Group, Ramiro Alfonsín, said that "the good results achieved in the first six months of the year led the group to update its guidance for the full year 2023. Adjusted operating margin is projected to be between 10% to 11%, increasing from the previously announced 6% to 8% and adjusted EBITDAR is expected to be $2.35 billion to $2.5 billion.”
The group continued to strengthen its balance sheet, quarter after quarter, generating US$110 million in cash during the period and reporting total liquidity of US$2.6 billion.
“LATAM has been working systematically and with a long-term focus. Our financial results are the result of the combination of an effective business strategy, an attractive value proposition for customers, cost discipline, a robust network in the region, a globally-leading punctuality, and a solid balance sheet," said Roberto Alvo, CEO of LATAM Airlines Group.
Greater and better connectivity
Domestic operations of the Brazilian affiliates grew 18% compared to 2022 (measured in ASKs), while the domestic operations of affiliates in Colombia, Chile, Peru and Ecuador increased 6.5% compared to last year. During the second quarter, the group transported 17.1 million passengers, 22.6% over the same quarter of 2022.
LATAM Airlines Colombia added 5 aircraft to its fleet, increasing its capacity by approximately 20%. As a result, the Colombian affiliate increased its market share from 24% in the first quarter to 33% in the second quarter.
The quarter was particularly active in network connectivity. LATAM Airlines Peru announced new routes, such as Lima-Aruba and Lima-Caracas. As well, as part of the JVA with Delta, three new routes were announced and an increase in frequency of an existing route, providing better connectivity between North and South America. Two of the routes will begin in October: LATAM Airlines Colombia will operate Medellin-Miami, LATAM Airlines Peru will operate Lima-Atlanta, and Delta Air Lines will add a second daily flight between Atlanta and Bogotá. The third route announced is Cartagena-Atlanta, operated by Delta Airlines, which will begin operations in December.
As well, LATAM Airlines Brazil announced a new interline agreement with the South African airline Airlink that will be available from September 2, the date on which the brazilian subsidiary will restart its flights to Johannesburg from Sao Paulo. With this new agreement, LATAM passengers will access more than 40 destinations throughout Africa.
In the group's cargo operations, during the second quarter, the group announced two new cargo routes, Miami-Guayaquil and Miami-San José Dos Campos, strengthening the Miami hub and expanding the group's cargo network. In addition, added the eighteenth cargo freighter to the group’s fleet, which is focused on transporting flowers from Colombia and Ecuador to the world, completing a total of 65 weekly frequencies of cargo planes from these countries.
Reaffirming the group's value proposition for its customers, LATAM group obtained several recognitions. It was distinguished as the most sustainable airline in in-flight service by the Onboard Hospitality Awards 2023 and cargo subsidiaries of LATAM were recognized by IATA as the winner of the Air Cargo Innovation Award for its plastic reduction projects in its cargo operations in Chile and Brazil. In addition, Skytrax World Airline recognized the LATAM group as the Best Airline in South America and, for the second consecutive year, it was highlighted as "Best Seat Comfort in South America" and "Best Catering in South America" at the APEX Passengers Choice Awards.
ABOUT LATAM GROUP
LATAM Airlines Group S.A. and its subsidiaries are the leading airline group in Latin America, with presence in five domestic markets in the region: Brazil, Chile, Colombia, Ecuador and Peru, in addition to international operations within Latin America and to Europe, Oceania, the United States and the Caribbean.
The group has a fleet of Boeing 767, 777, 787, Airbus A321, A320, A320neo and A319 aircraft.
LATAM Cargo Chile, LATAM Cargo Colombia and LATAM Cargo Brazil are the LATAM group’s cargo subsidiaries, having a combined fleet of 18 freighter aircraft, which will gradually increase to a total of 20 cargo aircraft by 2024. These cargo subsidiaries have access to the group's passenger aircraft, and operate within the LATAM group network, as well as on exclusive international routes for cargo transportation. In addition, they offer a modern infrastructure and a wide variety of services and support options to meet the needs of its customers.
More financial information at www.latamairlinesgroup.net