UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________________
FORM 6-K
_________________________________________________________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
August 2024
Commission File Number 1-14728
_________________________________________________________________
LATAM Airlines Group S.A.
(Translation of Registrant’s Name Into English)
_________________________________________________________________
Presidente Riesco 5711, 20th floor
Las Condes
Santiago, Chile
(Address of principal executive offices)
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Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F x Form 40-F o
LATAM AIRLINES GROUP S.A.
The following exhibit is attached:
| | | | | | | | |
| EXHIBIT NO. | | DESCRIPTION |
| 99.1 | | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| Date: August 7, 2024 | LATAM AIRLINES GROUP S.A. |
| | |
| By: | /s/ Ramiro Alfonsín |
| Name: | Ramiro Alfonsín |
| Title: | CFO |
LATAM AIRLINES GROUP REPORTS NET INCOME OF US$146 MILLION FOR THE SECOND QUARTER 2024 DRIVEN BY HEALTHY MARGINS AND GROWTH
Santiago, Chile, August 7, 2024 – LATAM Airlines Group S.A. (SSE: LTM) announced today its consolidated financial results for the second quarter ending June 30, 2024. “LATAM” or “the Company” makes reference to the consolidated entity, which includes its passenger and cargo affiliated airlines in Latin America. LATAM prepares its financial statements under IFRS as issued by the IASB, however, for ease of presentation and comparison, the Income Statement in this report is presented in an adapted US Format. On some occasions, adjustments to these Income Statement figures are made for Special Items. A table reconciling the figures adjusted for Special Items to their as-reported IFRS figures can be found at the end of the report. All figures in this report are expressed in U.S. dollars. Percentages and certain U.S. dollar, Chilean peso and Brazilian real amounts contained in this report have been rounded for ease of presentation. Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding. The Brazilian real / U.S. dollar average exchange rate for the quarter was BRL 5.22 per USD.
HIGHLIGHTS
During the second quarter of 2024 LATAM group increased its passenger operations by 16.2%, boosting its operational revenues to over US$3.0 billion, an increase of 13.2% compared to the same period of last year. This led to an adjusted operating margin of 9.0% and a net income for the period of US$146 million. LATAM strengthened its already robust capital structure by generating US$177 million in cash during the period, excluding the dividend payment in May. As a result, LATAM achieved an adjusted net leverage of 1.9x and maintained a strong liquidity position of approximately US$3.0 billion.
•During the second quarter 2024, consolidated capacity, measured by available seat-kilometers (ASK), increased by 16.2% when compared to the same quarter of 2023, surpassing 2019 ASK levels by 8.3%. The quarter reflected a strong load factor performance, with a consolidated load factor of 82.2%, improving 1.8 percentage points compared to the second quarter of 2023. In our international operations, we achieved a solid load factor of 84.3%. Additionally, our domestic operations in Brazil experienced the largest increase, with a notable 2.5 percentage point improvement compared to 2Q23, reaching 79.8%.
•Total operating revenues amounted to US$3,030 million during the second quarter (+13.2% vs 2Q23). This revenue increase was mainly driven by the increase in passenger revenues during the quarter, (+14.3% vs 2Q23) which was supported by the growth of international demand, together with a sustained preference of customers for the LATAM brand. On the other hand, cargo revenues increased by 6.9% during the quarter and have grown above pre-pandemic levels by 41.1%.
•During this quarter, average jet fuel price increased by 3.7%, however, there was a decrease of 1.4% in the total adjusted CASK. This decrease also occurred in adjusted CASK ex-fuel, decreasing 2.3% to US$4.7 cents, and in adjusted passenger CASK ex fuel, which was US$4.1 cents. Due to the foreign exchange variations including the devaluation of the Brazilian Real, these cost figures were positively impacted by approximately US$0.2 cents, although even excluding this impact, costs remained in line with the projected guidance for the full year.
•Due to flooding in the state of Rio Grande do Sul, in southern Brazil, Salgado Filho International Airport in Porto Alegre (POA) closed in May 2024. This forced all airlines, including LATAM Airlines Brazil, to cancel operations at the airport. For the Brazilian affiliate, this represented an average of 24 daily frequencies as of the end of April 2024. Between May and June, the group has re-allocated 12% of that capacity to other markets, both domestic and international, and expects 100% of that capacity to be re-allocated to other airports or routes in August. This accounted for a negative impact on the second quarter operating income of approximately US$25 million.
•LATAM group reported a strong adjusted EBITDAR of US$619 million for this quarter, due to increase in capacity and decrease in unit costs, leading to an adjusted EBITDAR margin of 20.4%.
•In the second quarter of 2024, net income of LATAM group amounted to US$146 million. With this, net income registered for the first half of the year totals US$405 million, an increase of 52.9% compared to the same period of 2023.
•LATAM generated US$177 million in cash during the second quarter, excluding the dividend payment of US$175 million made in May. Net of the dividend payment, the cash balance remained stable and in line with guidance. With this, the group ended the quarter with a liquidity position of US$3.0 billion, representing 23.3% of last twelve months revenues.
•On July 15th, LATAM group completed the successful renegotiation of its revolving credit facility lines, resulting in an extension and increase in both facilities until July 2029. The first revolving credit facility, initially set at US$600 million, was increased to a total amount of US$800 million. Similarly, the second revolving credit facility, initially set at US$500 million, was increased to US$750 million. Consequently, LATAM's total revolving facility lines now amount to a substantial US$1.550 million, providing the company with enhanced financial flexibility and liquidity. With this new amount and the cash position at the end of this quarter of US$1.9 billion, liquidity stands at 27% of the last twelve months revenues on a pro-forma basis, equivalent to US$3.4 billion.
•On July 25th, LATAM Airlines Group S.A. achieved a significant milestone by successfully reopening and relisting its American Depositary Receipts (ADRs) on the New York Stock Exchange. This strategic move will open up new avenues of investment for a wider range of investors, providing them with the opportunity to participate in the growth and success of the company.
MANAGEMENT COMMENTS - SECOND QUARTER OF 2024
LATAM has continuously placed customers at the center of its business strategy, which has been key in allowing the group to deliver strong operational and financial results quarter after quarter. This contributed to LATAM becoming the leading airline group in South America. By prioritizing efficiency and financial stability, whilst also keeping our clients at the forefront, LATAM has earned a reputation for reliability and effectiveness even when being faced with challenges, and this quarter was no exception. During the second quarter of 2024, LATAM group successfully transported 19.1 million passengers, representing an 11.7% increase compared to the same period of last year. This growth occurred notwithstanding the impact that LATAM Airlines Brazil faced with the flooding in the state of Rio Grande do Sul, and the suspension of operations at Salgado Filho International Airport in Porto Alegre (POA) in May. In the last 12 months, the group transported over 79 million passengers, marking the first time LATAM group has achieved this milestone within a one-year span. This growth has enabled us to continue delivering on our value proposition of connecting South America and the region with the world.
LATAM group experienced relevant growth in the first half of this year, stemming from all business segments and especially driven by the international market, with a substantial increase of 24.6% in operations during this period compared to the previous years. This was accompanied by solid demand as witnessed by the year over year increase in consolidated load factor to 83.3% across all segments as well.
During this second quarter, LATAM group made significant progress in enhancing the travel experience. Furthermore, in the second quarter passengers rated LATAM with a Net Promoter Score (NPS) of 54 points, the highest result in the history of the group under normal, non-pandemic operational conditions. This success is attributed to the excellent performance and occupancy of the Premium Economy cabins, as well as our consistent punctuality. These achievements have been recognized externally as well. LATAM Airlines Group was awarded "Best Airline in South America" for the fifth consecutive year, and "Best Airline Crew in South America" for the third consecutive year at the 2024 Skytrax World Airlines Awards.
In parallel, market shares have increased in all regions compared to the previous quarter. Though it is not LATAM group's main focus, we believe it to be a reflection of the group's unique value proposition and continued customer preference. Particularly notable is the South American regional market, in which LATAM group has a solid 42%. Regarding the Joint Venture Agreement (JVA) with Delta Air Lines, when the market shares of the airlines are combined, they reach 39%, which is also the highest figure recorded since the implementation of this agreement. Therefore, this demonstrates the growth and strong impact of the JVA for the airlines.
These achievements are the result of the collective effort of the more than 37 thousand employees of LATAM group who have dedicated themselves to providing a safe and customer-centric service. The collaborators of the group are highly focused and share a common purpose that drives the delivery of results of LATAM group. The sense of belonging further promotes collaborators to work together towards shared goals, while also ensuring a balance between economic growth, efficiency, environmental care, and social well-being.
Finally, with the consistent delivery of results and the well-executed value proposition, LATAM Airlines Group S.A. has taken a step forward and reopened and relisted its ADRs on the New York Stock Exchange (with a new ratio of 2,000 shares to 1 ADR), accompanied by a secondary offering by certain shareholders of 19,000,000 ADRs. This is a significant milestone for the Company, as it provides LATAM Airlines Group S.A. greater liquidity and visibility. Returning to the New York Stock Exchange after four years is a notable achievement that reflects the robust results obtained and provides a prominent global platform for further expanding operations and attracting a broader group of new investors who can now actively engage with the Company's stock. This development marks an important step in LATAM's journey towards expanding its shareholder base and strengthening its position in the market.
During the fourth quarter of this year, LATAM has the opportunity to refinance part of its Chapter 11 emergence debt. That includes a Term Loan-B for US$1.1 billion, callable at par, and both 2027 and 2029 senior secured notes for a total amount of US$1.15 billion. Subject to market conditions, we believe there will be opportunities to reduce the interest rate on this debt given current secondary trading, yields as well as our improved balance sheet and credit ratings, and therefore this would be accretive to earnings and to levered free cash flow. As such, the Company will be looking at all opportunities in the debt market, including bonds and loans, for a potential refinancing. From an accounting perspective, it is important to note that a liability management exercise would have a one-time, negative non-cash impact on the group's net income for that period. This is due to the structuring fees, which were fully paid in cash at the time of issuance, but whose accrual is recognized in the Income Statement evenly during the duration of the instruments. Therefore, a liability management exercise would result in a one-time negative impact from the recognition of the totality of the remaining fees.
MANAGEMENT DISCUSSION AND ANALYSIS OF SECOND QUARTER 2024 RESULTS
LATAM group reported total operating revenues of US$3,030 million in the second quarter, an increase of 13.2% compared to the same period of 2023, mainly explained by a 14.3% increase in passenger revenues and a 6.9% increase in cargo revenues. For the second quarter of 2024, passenger and cargo revenues accounted for 85.9% and 12.5% of total operating revenues, respectively.
Passenger revenues amounted to US$2,603 million in the second quarter, increasing 14.3% versus the same period of 2023, driven by a 16.2% increase in capacity, measured in ASKs. Additionally in the second quarter, LATAM's RASK reached US$6.9 cents, showing a slight decrease of 1.6% compared to the same period of 2023 (US$7.0 cents).
Cargo revenues amounted to US$380 million in the second quarter, increasing 6.9% versus the same period of 2023. Cargo capacity, measured in ATK, increased by 12.2%, mainly explained by the upsizing in the group's cargo and passenger fleet. Regarding cargo yields, in the second quarter they amounted to US$36.3 cents per RTK, showing a decrease of 9.3% compared to the second quarter of 2023 but stable compared to 1Q24. Even though the cargo business has experienced a moderation in revenues since pandemic times, yields remain situated 14.4% above 2019 levels.
Other income amounted to US$47 million in the second quarter, increasing 8.0% versus the same period of 2023. This year-over-year growth is attributed to the increase in sales of ancillaries services related to the LATAM Travel business.
Total adjusted operating expenses were US$2,756 million during the quarter, increasing 14.6% versus 2Q23, mainly explained by the 16.2% increase in passenger operations. Aircraft fuel costs increased 16.7% versus the same period of 2023. During the second quarter of 2024, LATAM group reported an adjusted passenger CASK ex-fuel of US$4.1 cents, a 4.7% decrease compared to the same quarter of 2023. This adjusted passenger CASK ex-fuel is in line with LATAM's full year guidance, even when excluding the foreign exchange variation impact, thus reflecting a continued focus on cost containment.
In order to more closely align with SEC standards, LATAM has adjusted the methodology used for calculating Total Operating Expenses. Changes in methodology are further explained below in each corresponding line and in detail on page 18 in the Reconciliation Tables section of the earnings release.
The changes in adjusted operating expenses during the quarter were mainly explained by:
•Wages and benefits increased 12.6% versus the same period of 2023, mainly explained by a 9.2% an increase in the average headcount of the group (mainly pilots, cabin crew and airport employees), due to the 16.2% increase in passenger operations year over year, and primarily offset by foreign exchange rate effects.
•Aircraft fuel costs increased 16.7% compared to the second quarter of 2023, explained by a 14.8% increase in fuel consumption due to higher operations and a 3.7% increase in the average jet fuel price (excluding hedges) compared to the same period of 2023. During the quarter, this cost line was partially offset by positive fuel hedge effects of approximately US$20 million.
•Commissions to agents increased 6.1% versus 2Q23, associated with the increase in total revenues, and partially offset by higher direct sale penetration.
•Depreciation and amortization increased 20.0% versus 2Q23, explained by the increase of the number of aircraft in the fleet during this period and the incorporation of newer aircraft. Specifically, the fleet size, excluding aircraft available for sale, expanded from 280 aircraft as of June 30, 2023 to 312 aircraft as of June 30, 2024 and the number of newer Airbus Neo family aircraft more than doubled year over year.
•Other rental and landing fees increased 26.5% versus 2Q23, mainly explained by a 24.6% increase in international operations, in addition to a higher number of passengers transported (+11.7%).
•Passenger services expenses totaled US$78 million versus 2Q23, increasing 19.5% versus the same period of 2023. This is mainly explained by the 16.2% growth in capacity, in particular the growth of the international segment that has led to a greater international mix in the operation.
•Aircraft rentals expenses, which correspond exclusively to LATAM group’s fleet power-by-the-hour (PBH) contracts, amounted to US$1.0 million, representing a 95.7% decrease versus 2Q23. This significant decline is a result of almost all PBH contracts for aircraft expiring, with only a few aircraft remaining under PBH. This expense is considered a special item since there is a non-cash double counting of fleet PBH in Aircraft Rentals and in the Depreciation & Amortization line, and therefore has been adjusted for in the adjusted financial figures.
•Aircraft maintenance expenses totaled US$160 million, corresponding to a 4.6% increase versus 2Q23, explained by a 16.2% increase in operations, partially offset by the reversal of the maintenance provisions of aircraft acquired by LATAM group during the quarter.
•Other operating expenses increased 0.2% compared to 2Q23 and amounted to US$319 million, partially explained by higher variable costs of crew and reservation systems as a result of the 16.2% increase in passenger operations.
•Other gains and losses totaled US$3 million in gains for the second quarter. This line includes, but is not limited to, contingencies related to non-current operations, fair value adjustments, and other one-time effects. In previous publications, other gains and losses were accounted in the non-operating line "other income (expense)". In LATAM's revised methodology, this line is accounted within the operating expenses but is completely adjusted for in the adjusted financial figures.
Non-operating results
•Interest income amounted to US$31 million in the quarter, in line with previous quarters' results and cash levels. Cash and cash equivalents are mainly invested in fixed-term bank deposits.
•Interest expense increased 9.8% versus 2Q23, to US$189 million during the quarter, mainly due to the higher interest rate environment and the increase in the number of aircraft leases. As a reference, SOFR base rate increased by an average of 20 basis points compared to the same quarter of 2023.
•Foreign exchange gains and losses amounted to US$47 millions in the second quarter, with an increase of 3.0% compared to the same period of 2023, mainly related to the depreciation of the Brazilian Real. In previous publications, foreign exchange gains and losses were accounted in the non-operating line "other income (expense), which is a line that consolidated several accounts and is no longer included in the Income Statement
since its individual components are now presented separately: Foreign exchange gains and losses, Results of indexation units and Other gains and losses. In LATAM's revised methodology, this line is completely adjusted for in the adjusted financial figures.
•Result of indexation units amounted to US$7 million in the quarter, which is an increase compared to the same period of 2023 mainly due to the adjustments for hyperinflation primarily linked to the increase in labor contingencies in Argentina due to the cease of its domestic operations, together with a higher CPI than 2023. In previous publications results of indexation units were accounted in the non-operating line "other income (expense), which is a line that consolidated several accounts and is no longer included in the Income Statement since its individual components are now presented separately: Foreign exchange gains and losses, Results of indexation units and Other gains and losses. In LATAM's revised methodology, this line is completely adjusted for in the adjusted financial figures.
•Net income attributable to the owners of the parent company during the quarter was US$146 million.
LIQUIDITY AND FINANCING
During the second quarter of 2024, LATAM group generated US$ 177 million in cash, excluding dividend payment of approximately US$175 million, which was approved at the Ordinary Shareholders' Meeting held on April 25, 2024. As of quarter end, LATAM's liquidity stood at approximately US$3.0 billion, comprised of approximately US$1.9 billion in cash and cash equivalents, in addition to US$1.1 billion in available and fully undrawn revolving credit facilities (“RCF”). Liquidity as a percentage of revenues of last twelve months was 23.3%.
After the quarter end on July 15, 2024, LATAM group announced through a material fact the changes to extend and upsize its revolving credit facilities. Consequently, the Company's fully undrawn RCF lines have been increased to a total of US$1,550 million and are scheduled to mature in 2029. With this new amount and the cash position at the of this quarter of US$ 1.9 billion, liquidity stands at 27% of the last twelve months revenues on a pro-forma basis.
LATAM group registered a consolidated fleet debt (operational leases and finance leases) of US$4.4 billion, alongside a non-fleet debt of US$2.7 billion. This results in a total gross debt of US$7.1 billion and a net debt of US$5.3 billion. At the end of the period, LATAM group reported an adjusted net leverage of 1.9x, demonstrating its continued strong capital structure and robust operations.
With respect to LATAM group’s fuel hedging policy, its main objective is to protect against medium-term liquidity risk from fuel price increases, while benefiting from fuel price reductions. Accordingly, LATAM group hedges a portion of its estimated fuel consumption. Hedge positions per quarter for the next months, as of August 5, 2024, are shown in the table below:
| | | | | | | | | | | | | | |
| 3Q24 | 4Q24 | 1Q25 | 2Q25 |
| Hedge positions | | | | |
| Estimated Fuel consumption hedged | 48% | 43% | 29% | 24% |
Note: Hedge positions per quarter for the next months (3Q24, 4Q24, 1Q25 and 2Q25), as of June 30, were 43%, 40%, 19% and 12% respectively.
LATAM FLEET PLAN
LATAM group’s fleet is composed of 262 Airbus narrow-body aircraft, 57 Boeing wide-body aircraft and 21 Boeing cargo freighters, totaling 340 aircraft. During the second quarter, the group received 5 Airbus A321Neo. For a breakdown of the current fleet, please see the fleet chart in the reference tables section toward the end of this report.
As of the date of publication, LATAM group has fleet commitment agreements with Airbus and Boeing for new aircraft and additionally has signed several contracts with lessors to receive both narrow-body Airbus and wide-body Boeing aircraft in the coming years, as detailed below. These new technology aircraft will allow LATAM group to continue to modernize and expand its fleet.
| | | | | | | | | | | | | | |
| Fleet Plan | | As of end of year |
| 2023 | 2024 | 2025 | 2026 |
| Passenger Aircraft | | | | |
| Narrow Body | | | | |
| Airbus Ceo Family | 225 | 224 | 221 | 212 |
| Airbus Neo Family | 31 | 45 | 62 | 77 |
| Total NB | 256 | 269 | 283 | 289 |
| | | | |
| Wide Body | | | | |
| Boeing 787 | 36 | 37 | 39 | 41 |
| Other Boeing | 21 | 19 | 19 | 19 |
| Total WB | 57 | 56 | 58 | 60 |
| | | | |
| TOTAL | 313 | 325 | 341 | 349 |
| | | | |
| Cargo Aircraft | | | | |
| Boeing 767-300F | 20 | 21 | 19 | 19 |
| TOTAL | 20 | 21 | 19 | 19 |
| TOTAL FLEET | 333 | 346 | 360 | 368 |
| | | | |
| AVERAGE FLEET | 316 | 339 | 350 | 366 |
Note: This fleet plan takes into account LATAM group's best estimates for committed arrivals, current decisions regarding aircraft sales, retirements and lease extensions. In the Financial Statements, Note 13 describes the aircraft that are currently held for sale and expected to be sold in 2024.
2024 GUIDANCE
Guidance is detailed below:
| | | | | | | | | | | | | |
| Indicator | Guidance | 2024E | |
| | | | | |
| Operating Indicators | Total ASK Growth vs 2023 | 14 | % - | 16% | | |
| Domestic Brazil ASK Growth vs 2023 | 8 | % - | 10% | | |
| Domestic Spanish Speaking Countries ASK Growth vs 2023 | 14 | % - | 16% | | |
| International ASK Growth vs 2023 | 18 | % - | 20% | | |
| Total ATK Growth vs 2023 | 10 | % - | 12% | | |
| | | | | |
| Financial Indicators | Revenues (US$ billion) | 12.8 - | 13.1 | | |
| CASK ex fuel (US$ cents) | 4.8 - | 5.0 | | |
| Adjusted Passenger CASK ex fuel1 (US$ cents) | 4.3 - | 4.5 | | |
| Adjusted EBIT2 (US$ billion) | 1.40 - | 1.60 | | |
| Adjusted EBIT Margin | 11.0 | % - | 12.5% | | |
| Adjusted EBITDAR2 (US$ billion) | 2.75 - | 3.05 | | |
| Adjusted EBITDAR Margin | 21.5 | % - | 23.5% | | |
| Liquidity3 (US$ billion) | 2.9 - | 3.1 | | |
| Financial Net Debt4 (US$ billion) | 5.0 - | 5.2 | | |
| Financial Net Debt4/Adjusted EBITDAR2 (x) | 1.6x - | 1.8x | | |
| | | | | |
| Assumptions | | | |
| Average exchange rate (BRL/USD) | 5.1 | | |
| Jet fuel price (US$/bbl) | 110 | | |
1) Adjusted Passenger CASK ex fuel excludes cargo costs associated with belly and freighter operations, adjusted to add back the effect of other
gains and losses, variable Aircraft Rental expenses (non-cash P&L effect) and employee compensations associated with the Corporate Incentive Plan.
2) Adjusted EBIT and Adjusted EBITDAR exclude other gains and losses, variable Aircraft Rental expenses (non-cash P&L effect), employee compensations associated with the Corporate Incentive Plan, foreign exchange gains and results of indexation units.
3) Liquidity is defined as Cash and Cash Equivalents and undrawn, committed revolving credit facilities. Does not assume Liability Management excercise in 2024.
4) Financial Net Debt includes operating leases liabilities, financial leases and other financial debt, net of Cash and Cash Equivalents.
Note on Forward-Looking Statements Assumptions and expectations are not facts but rather a good faith estimate of reality based on selected information believed to be reasonable. However, reality may differ from assumptions and expectations. This report also contains forward-looking statements. Such statements may contain words such as “could,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “believe” or other similar expressions. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. These statements are based on LATAM's current plans, estimates and projections and, therefore, you should not place undue reliance on such statements or the estimates arising from them. Forward-looking statements involve known and unknown inherent risks, uncertainties and other factors, many of which are beyond LATAM's control and are difficult to predict. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. The financial information contained herein does not constitute or replace in any way the submission of the corresponding financial statements of the Commission for the Financial Market (CMF) and the market, in terms of their content requirements, applicable procedures and deadlines of submission corresponding to the CMF in accordance with current regulations. These factors and uncertainties include in particular those described in documents we have filed with the United States Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update any of them, whether as a result of new information, future events or any other factor. Our revised 2024 guidance is based on our unaudited results for the first quarter of 2024, which exceeded our estimates for that period. We believe the primary drivers of the improvement in our results for the first quarter of 2024 were strong demand, additional capacity and costs containment . Our first quarter results may not be indicative of future performance, which remains subject to a number and uncertainties, including the risks disclosed in our annual report on Form 20-F, which was filed on February 22, 2024 and especially the risks and uncertainties associated with the more recent conflicts developing in the Middle East. In addition, as disclosed in our annual report on Form 20-F, our business is seasonal and our passenger revenues are generally higher in the first and fourth quarters of each year, during the southern hemisphere’s spring and summer. Finally, demand for air travel and cargo services is influenced by a number of factors beyond our control, including global, regional and national political and socioeconomic developments as well as changes in our competitive landscape, all of which could have a material impact on our ability to achieve the guidance disclosed herein.
FINANCIAL STATEMENTS PUBLICATION AND CONFERENCE CALL
LATAM Airlines Group S.A. filed its financial statements for the period ended June 30, 2024 with the Comisión para el Mercado Financiero (CMF) of Chile on August 7, 2024. These financial statements are available in Spanish and English at http://www.latamairlinesgroup.net. For further inquiries, please contact the Investor Relations team at InvestorRelations@latam.com.
The Company will hold a conference call to discuss the second quarter 2024 financial results on Thursday, August 8, 2024, at 9:00 am ET / 9:00 am Santiago.
Webcast Link: Click here
Participant Call Link: Click here
About LATAM Airlines Group S.A.:
LATAM Airlines Group S.A. and its affiliates are the principal group of airlines in Latin America present in five domestic markets in the region: Brazil, Chile, Colombia, Ecuador and Peru, in addition to international operations within Latin America and to / from Europe, the United States, Oceania, Africa and the Caribbean.
The group has a fleet of Boeing 767, 777, 787, Airbus A321, A321Neo, A320, A320Neo and A319 aircraft.
LATAM Cargo Chile, LATAM Cargo Colombia and LATAM Cargo Brazil are the LATAM group cargo subsidiaries. In addition to having access to the bellies of the passenger affiliates's aircraft, they have a fleet of 21 freighters. They operate on the LATAM group network as well as international routes that are solely used for freighters. They offer modern infrastructure, a wide variety of services and protection options to meet all customer needs.
For LATAM press inquiries, please write to comunicaciones.externas@latam.com. Additional financial information is available at www.latamairlinesgroup.net.
LATAM Airlines Group S.A.
Consolidated Financial Results for the Second Quarter 2024 (in thousands of US Dollars)
| | | | | | | | | | | | | | | | | |
| For the three month period ended June 30 |
| 2024 | Adjustments | 2024 Adjusted | 2023 Adjusted | % Change |
| REVENUE | | | | | |
| Passenger | 2,603,275 | — | 2,603,275 | 2,277,553 | 14.3% |
| Cargo | 380,006 | — | 380,006 | 355,324 | 6.9% |
| Other Income | 46,637 | — | 46,637 | 43,186 | 8.0% |
| TOTAL OPERATING REVENUE | 3,029,918 | — | 3,029,918 | 2,676,063 | 13.2% |
| EXPENSES | | | | | |
| Wages and Benefits | (419,488) | 15,684 | (403,804) | (358,690) | 12.6% |
| Aircraft Fuel | (992,453) | — | (992,453) | (850,523) | 16.7% |
| Commissions to Agents | (54,050) | — | (54,050) | (50,947) | 6.1% |
| Depreciation and Amortization | (344,789) | — | (344,789) | (287,405) | 20.0% |
| Other Rental and Landing Fees | (403,522) | — | (403,522) | (318,942) | 26.5% |
| Passenger Services | (78,168) | — | (78,168) | (65,402) | 19.5% |
| Aircraft Rentals | (1,012) | 1,012 | — | — | n.m. |
| Aircraft Maintenance | (159,913) | — | (159,913) | (152,871) | 4.6% |
| Other Operating Expenses | (319,423) | — | (319,423) | (320,047) | (0.2%) |
| Other gains/(losses) | 3,304 | (3,304) | — | — | n.m |
| TOTAL OPERATING EXPENSES | (2,769,514) | 13,392 | (2,756,122) | (2,404,827) | 14.6% |
| OPERATING INCOME/(LOSS) | 260,404 | 13,392 | 273,796 | 271,236 | 0.9% |
| Operating Margin | 8.6% | 0.4pp | 9.0% | 10.1% | -1.1pp |
| Interest Income | 31,080 | — | 31,080 | 45,264 | (31.3%) |
| Interest Expense | (189,445) | — | (189,445) | (172,613) | 9.8% |
| Foreign exchange gains | 47,455 | (47,455) | — | — | n.m |
| Result of indexation units | 6,680 | (6,680) | — | — | n.m |
| INCOME/(LOSS) BEFORE TAXES | 156,174 | (40,743) | 115,431 | 143,887 | (19.8%) |
| Income Taxes | (10,885) | — | (10,885) | (2,792) | 289.9% |
| NET INCOME/(LOSS) | 145,289 | (40,743) | 104,546 | 141,095 | (25.9%) |
| Attributable to: | | | | | |
| Owners of the parent | 145,546 | (40,743) | 104,803 | 142,288 | (26.3%) |
| Non-controlling interest | (257) | — | (257) | (1,193) | (78.5%) |
| NET INCOME/(LOSS) attributable to the owners of the parent | 145,546 | (40,743) | 104,803 | 142,288 | (26.3%) |
| Net Margin attributable to the owners of the parent | 4.8% | -1.3pp | 3.5% | 5.3% | -1.9pp |
| Effective Tax Rate | (7.0%) | -2.5pp | (9.4%) | (1.9%) | -7.5pp |
Financial Metrics for the Second Quarter 2024 (in thousands of US Dollars) |
| For the three month period ended June 30 |
| 2024 | 2023 | Change (%) |
| | | |
| | | |
| | | | | |
Adjusted EBITDAR | 618,585 | 558,641 | 10.7% |
| Adjusted EBITDAR Margin | 20.4% | 20.9% | -0.5pp |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
}
Note: Adjustments include adjustments to add back the effect of other gains and losses, variable Aircraft Rental expenses (non-cash P&L effect), employee compensations associated with the Corporate Incentive Plan, foreign exchange gains and results of indexation units.
LATAM Airlines Group S.A.
Consolidated Financial Results for the six-month period ended June (in thousands of US Dollars)
| | | | | | | | | | | | | | | | | |
| For the six month period ended June 30 |
| 2024 | Adjustments | 2024 Adjusted | 2023 Adjusted | Var. % |
| REVENUE | | | | | |
| Passenger | 5,501,117 | — | 5,501,117 | 4,671,904 | 17.7% |
| Cargo | 749,363 | — | 749,363 | 732,615 | 2.3% |
| Other Income | 100,771 | — | 100,771 | 77,002 | 30.9% |
| TOTAL OPERATING REVENUE | 6,351,251 | — | 6,351,251 | 5,481,521 | 15.9% |
| EXPENSES | | | | | |
| Wages and Benefits | (845,240) | 36,395 | (808,845) | (710,245) | 13.9% |
| Aircraft Fuel | (2,016,826) | — | (2,016,826) | (1,910,282) | 5.6% |
| Commissions to Agents | (115,782) | — | (115,782) | (100,928) | 14.7% |
| Depreciation and Amortization | (677,611) | — | (677,611) | (565,459) | 19.8% |
| Other Rental and Landing Fees | (791,181) | — | (791,181) | (616,287) | 28.4% |
| Passenger Services | (154,299) | — | (154,299) | (128,535) | 20.0% |
| Aircraft Rentals | (2,245) | 2,245 | — | — | n.m. |
| Aircraft Maintenance | (354,144) | — | (354,144) | (290,473) | 21.9% |
| Other Operating Expenses | (696,062) | — | (696,062) | (593,001) | 17.4% |
| Other gains/(losses) | (43,127) | 43,127 | — | — | n.m |
| TOTAL OPERATING EXPENSES | (5,696,517) | 81,767 | (5,614,750) | (4,915,210) | 14.2% |
| OPERATING INCOME/(LOSS) | 654,734 | 81,767 | 736,501 | 566,311 | 30.1% |
| Operating Margin | 10.3% | 1.3pp | 11.6% | 10.3% | 1.3pp |
| Interest Income | 62,530 | — | 62,530 | 63,186 | (1.0%) |
| Interest Expense | (380,830) | — | (380,830) | (336,777) | 13.1% |
| Foreign exchange gains | 87,082 | (87,082) | — | — | n.m |
| Result of indexation units | 7,755 | (7,755) | — | — | n.m |
| INCOME/(LOSS) BEFORE TAXES | 431,271 | (13,070) | 418,201 | 292,720 | 42.9% |
| Income Taxes | (26,028) | — | (26,028) | 4,087 | n.m |
| NET INCOME/(LOSS) | 405,243 | (13,070) | 392,173 | 296,807 | 32.1% |
| Attributable to: | | | | | |
| Owners of the parent | 403,824 | (13,070) | 390,754 | 298,743 | 30.8% |
| Non-controlling interest | 1,419 | — | 1,419 | (1,936) | n.m |
| NET INCOME/(LOSS) attributable to the owners of the parent | 403,824 | (13,070) | 390,754 | 298,743 | 30.8% |
| Net Margin attributable to the owners of the parent | 6.4% | -0.2pp | 6.2% | 5.5% | 0.7pp |
| Effective Tax Rate | (6.0%) | -0.2pp | (6.2%) | 1.4% | -7.6pp |
Financial Metrics for the six-month period ended June (in thousands of US Dollars) |
| For the six month period ended June 30 |
| 2024 | 2023 | Change (%) |
| | | |
| | | |
| | | | | |
| | | |
| | | |
| | | |
| | | | | |
Adjusted EBITDAR | 1,414,112 | 1,131,770 | 24.9% |
| Adjusted EBITDAR Margin | 22.3% | 20.6% | 1.6pp |
Note: Adjustments include adjustments to add back the effect of other gains and losses, variable Aircraft Rental expenses (non-cash P&L effect), employee compensations associated with the Corporate Incentive Plan, foreign exchange gains and results of indexation units.
LATAM Airlines Group S.A.
Consolidated Operational Statistics
| | | | | | | | | | | | | | | | | | | | | | | |
| For the three month period ended June 30 | | For the six month period ended June 30 |
| 2024 | 2023 | % Change | | 2024 | 2023 | % Change |
| | | | | | | |
| System | | | | | | | |
| Costs per ASK (US$ cents) | 7.3 | 7.5 | (2.7%) | | 7.5 | 7.7 | (2.7%) |
| Adjusted Costs per ASK (US$ cents) | 7.3 | 7.4 | (1.4%) | | 7.4 | 7.5 | (2.2%) |
| Costos por ASK ex fuel (US$ centavos) | 4.7 | 4.9 | (4.3%) | | 4.8 | 4.8 | 1.6% |
| Adjusted Costs per ASK ex fuel (US$ cents) | 4.7 | 4.8 | (2.3%) | | 4.7 | 4.6 | 2.5% |
Adjusted Passenger CASK ex fuel (US$ cents) | 4.1 | 4.3 | (4.7%) | | 4.2 | 4.3 | (2.3%) |
| Fuel Gallons Consumed (millions) | 326.7 | 284.7 | 14.8% | | 657.5 | 569.6 | 15.4% |
| Fuel Gallons Consumed per 1,000 ASKs | 8.7 | 8.8 | (1.2%) | | 8.6 | 8.7 | (1.2%) |
| Fuel Price (with hedge) (US$ per gallon) | 3.04 | 2.99 | 1.7% | | 3.07 | 3.35 | (8.4%) |
| Fuel Price (without hedge) (US$ per gallon) | 3.05 | 2.94 | 3.7% | | 3.10 | 3.33 | (6.9%) |
| Average Trip Length (km) | 1,622 | 1,524 | 6.4% | | 1,613 | 1,544 | 4.4% |
| Total Number of Employees (average) | 36,922 | 33,825 | 9.2% | | 36,556 | 33,355 | 9.6% |
| Total Number of Employees (end of the period) | 37,124 | 34,134 | 8.8% | | 37,124 | 34,134 | 8.8% |
| | | | | | | |
| Passenger | | | | | | | |
| ASKs (millions) | 37,737 | 32,477 | 16.2% | | 76,198 | 65,213 | 16.8% |
| RPKs (millions) | 31,028 | 26,107 | 18.8% | | 63,486 | 52,637 | 20.6% |
| Passengers Transported (thousands) | 19,135 | 17,128 | 11.7% | | 39,370 | 34,082 | 15.5% |
| Load Factor (based on ASKs) % | 82.2% | 80.4% | 1.8pp | | 83.3% | 80.7% | 2.6pp |
| Yield based on RPKs (US$ cents) | 8.4 | 8.7 | (3.8%) | | 8.7 | 8.9 | (2.4%) |
| Revenues per ASK (US$ cents) | 6.9 | 7.0 | (1.6%) | | 7.2 | 7.2 | 0.8% |
| | | | | | | |
| Cargo | | | | | | | |
| ATKs (millions) | 1,975 | 1,761 | 12.2% | | 3,906 | 3,464 | 12.8% |
| RTKs (millions) | 1,048 | 889 | 17.9% | | 2,060 | 1,791 | 15.0% |
| Tons Transported (thousands) | 246 | 225 | 9.7% | | 481 | 454 | 5.9% |
| Load Factor (based on ATKs) % | 53.1% | 50.5% | 2.6pp | | 52.8% | 51.7% | 1.1pp |
| Yield based on RTKs (US$ cents) | 36.3 | 40.0 | (9.3%) | | 36.4 | 40.9 | (11.1%) |
| Revenues per ATK (US$ cents) | 19.2 | 20.2 | (4.6%) | | 19.2 | 21.1 | (9.3%) |
Note: Adjusted figures include adjustments to add back the effect of other gains and losses, variable Aircraft Rental expenses (non-cash P&L effect) and employee compensations associated with the Corporate Incentive Plan. Adjusted Passenger CASK ex fuel also excludes cargo costs associated with belly and freighter operations.
LATAM Airlines Group S.A.
Consolidated Balance Sheet (in thousands of US Dollars)
| | | | | | | | |
| As of June 30 | As of December 31 |
| 2024 | 2023 |
| | |
| Assets |
| Cash and cash equivalents | 1,853,359 | 1,714,761 |
| Other financial assets | 105,205 | 174,819 |
| Other non-financial assets | 167,322 | 185,264 |
| Trade and other accounts receivable | 1,250,663 | 1,385,910 |
| Accounts receivable from related entities | 11 | 28 |
| Inventories | 555,269 | 592,880 |
| Current tax assets | 69,034 | 47,030 |
| Total current assets other than non-current assets (or disposal groups) classified as held for sale | 4,000,863 | 4,100,692 |
| | |
| Non-current assets (or disposal groups) classified as held for sale | 80,481 | 102,670 |
| | |
| Total current assets | 4,081,344 | 4,203,362 |
| | |
| Other financial assets | 46,322 | 34,485 |
| Other non-financial assets | 146,596 | 168,621 |
| Accounts receivable | 12,389 | 12,949 |
| | |
| Intangible assets other than goodwill | 1,063,703 | 1,151,986 |
| Property, plant and equipment | 9,535,305 | 9,091,130 |
| | |
| Deferred tax assets | 4,363 | 4,782 |
| Total non-current assets | 10,808,678 | 10,463,953 |
| Total assets | 14,890,022 | 14,667,315 |
| | |
| Liabilities and shareholders' equity |
| Other financial liabilities | 626,550 | 596,063 |
| Trade and other accounts payables | 1,954,510 | 1,765,279 |
| Accounts payable to related entities | 6,943 | 7,444 |
| Other provisions | 7,199 | 15,072 |
| Current tax liabilities | 2,555 | 2,371 |
| Other non-financial liabilities | 3,226,049 | 3,301,906 |
| Total current liabilities | 5,823,806 | 5,688,135 |
| | |
| Other financial liabilities | 6,487,154 | 6,341,669 |
| Accounts payable | 416,485 | 418,587 |
| Other provisions | 900,026 | 926,736 |
| Deferred tax liabilities | 341,957 | 382,359 |
| Employee benefits | 143,593 | 122,618 |
| Other non-financial liabilities | 248,930 | 348,936 |
| Total non-current liabilities | 8,538,145 | 8,540,905 |
| Total liabilities | 14,361,951 | 14,229,040 |
| | |
| Share capital | 5,003,534 | 5,003,534 |
| Retained earnings | 747,088 | 464,411 |
| | |
| Other equity | 39 | 39 |
| Other reserves | (5,211,643) | (5,017,682) |
| Parent’s ownership interest | 539,018 | 450,302 |
| Non-controlling interest | (10,947) | (12,027) |
| Total equity | 528,071 | 438,275 |
| Total liabilities and equity | 14,890,022 | 14,667,315 |
LATAM Airlines Group S.A.
Consolidated Statement of Cash Flow – Direct Method (in thousands of US Dollars)
| | | | | | | | |
| As of June 30, | As of June 30, |
| 2024 | 2023 |
| | |
| Cash flows from operating activities | | |
| Cash collection from operating activities | | |
| Proceeds from sales of goods and services | 6,817,279 | 6,288,152 |
| Other cash receipts from operating activities | 125,484 | 84,953 |
| | |
| Payments for operating activities | | |
| Payments to suppliers for the supply goods and services | (4,854,611) | (4,558,603) |
| Payments to and on behalf of employees | (653,235) | (681,849) |
| Other payments for operating activities | (159,655) | (118,672) |
| Income taxes (paid) | (29,372) | (11,527) |
| Other cash inflows (outflows) | 108,947 | (32,584) |
| | |
| Net cash (outflow) inflow from operating activities | 1,354,837 | 969,870 |
| | |
| Cash flows from investing activities | | |
| | |
| | |
| | |
| | |
| Amounts raised from sale of property, plant and equipment | 37,740 | 46,524 |
| Purchases of property, plant and equipment | (427,762) | (263,739) |
| Purchases of intangible assets | (35,040) | (22,462) |
| Interest received | 58,016 | 37,772 |
| Other cash inflows (outflows) | 34,469 | 31,111 |
| | |
| Net cash (outflow) inflow from investing activities | (332,577) | (170,794) |
| | |
| Cash flows inflow (out flow) from financing activities | | |
| | |
| | |
| Payments for changes in ownership interests in subsidiaries that do not result in loss of control | — | (23) |
| | |
| | |
| | |
| | |
| Loans repayments | (143,323) | (159,981) |
| Payments of lease liabilities | (148,118) | (96,105) |
| | |
| Dividends paid | (174,838) | — |
| Interest paid | (337,531) | (273,366) |
| Other cash (outflows) inflows | 719 | (4,133) |
| | |
| Net cash inflow (outflow) from financing activities | (803,091) | (533,608) |
| | |
| Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change | 219,169 | 265,468 |
| Effects of variation in the exchange rate on cash and cash equivalents | (80,571) | 43,086 |
| Net (decrease) increase in cash and cash equivalents | 138,598 | 308,554 |
| | |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 1,714,761 | 1,216,675 |
| | |
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 1,853,359 | 1,525,229 |
LATAM Airlines Group S.A.
Adjusted Free Cash Flow (in thousands of US Dollars)
| | | | | | | | |
| Adjusted Free Cash Flow | For the three month period ended June 30 | For the six month period ended June 30 |
| 2024 | 2024 |
| | |
| Adjusted EBITDAR | 618,585 | 1,414,112 |
| | |
| Changes in working capital | 349,633 | 103,014 |
| Cash taxes | (6,728) | (29,372) |
| Operating lease payments | (126,945) | (273,992) |
| Interest Income | 20,599 | 58,016 |
| Adj. Operating cash flow | 855,144 | 1,271,778 |
| | |
| Maintenance Capex | (131,470) | (241,956) |
| Capex for growth & Fleet Capex Net of Financing | (272,436) | (324,049) |
| Adj. Investment cash flow | (403,906) | (566,005) |
| | |
| Adj. Unlevered FCF | 451,238 | 705,773 |
| Interest on financial debt | (126,424) | (177,388) |
| Interest on finance leases | (17,748) | (36,514) |
| Adj. Levered FCF | 307,066 | 491,871 |
| | |
| Finance lease amortization | (81,451) | (130,051) |
| Non-Fleet Financial debt net amortization | (10,522) | (13,272) |
| Statutory Dividends | (174,549) | (174,838) |
| Other (Incl. Asset Sale, Fx and others) | (38,558) | (35,112) |
| Adj. Financing & Others cash flow | (449,252) | (567,175) |
| Change in cash | 1,986 | 138,598 |
| | |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD | 1,851,373 | 1,714,761 |
| CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 1,853,359 | 1,853,359 |
| | |
| Fleet Cash Cost | (220,977) | (429,445) |
Notes:
1) Adjusted EBITDAR includes adjustments to add back the effect of other gains and losses, variable Aircraft Rental expenses (non-cash P&L effect), employee compensations associated with the Corporate Incentive Plan, foreign exchange gains and results of indexation units.
2) Operating lease payments include variable Aircraft Rentals (Pay by the Hour “PBH”) and Operational Leases under IFRS 16 including amortization and interest (both fleet and non-fleet).
3) Maintenance Capex primarily includes engine shop visits, aircraft c-checks and restocking of parts for existing operation, as well as capex associated with fleet projects that do not contribute additional capacity to the group's operations or add new features to the existing offered product.
4) Growth & Fleet capex (net of financing) includes capex associated with additional spare parts and engines, engine shop visits, aircraft c-checks and restocking of parts for additional operation, PDPs, fleet projects that contribute additional capacity or new features to the existing offered product and certain other strategic projects that add value, and fleet arrivals net of their financing.
5) Fleet Cash cost includes Finance lease amortization, interest on finance leases and operating lease payments (Excluding Non-fleet lease liabilities). Calculation can be found in page 19.
LATAM Airlines Group S.A.
Consolidated Balance Sheet Indicators (in thousands of US Dollars)
| | | | | | | | |
| As of June 30, | As of December 31, |
| 2024 | 2023 |
| | |
| Total Assets | 14,890,022 | 14,667,315 |
| Total Liabilities | 14,361,951 | 14,229,040 |
| Total Equity* | 528,071 | 438,275 |
| Total Liabilities and Shareholders equity | 14,890,022 | 14,667,315 |
| | |
| Debt | | |
| Current and long term portion of loans from financial institutions** | 2,986,410 | 3,066,648 |
| Current and long term portion of obligations under capital leases | 850,456 | 901,546 |
| Total Financial Debt | 3,836,866 | 3,968,194 |
| Lease liabilities | 3,274,268 | 2,967,994 |
| Total Gross Debt | 7,111,134 | 6,936,188 |
| Cash, cash equivalents and liquid investments | (1,853,359) | (1,714,761) |
| Total Net Debt | 5,257,775 | 5,221,427 |
*Includes non-controlling interest.
**Excluding associated guarantees.
LATAM Airlines Group S.A.
Main Financial Ratios
| | | | | | | | |
| As of June 30, | As of December 31, |
| 2024 | 2023 |
| | |
| Cash, cash equivalents and liquid investments as % of LTM revenues | 14.6% | 14.5% |
| Liquidity* as % of LTM revenues | 23.3% | 23.9% |
| | |
| Gross Debt (US$ thousands) | 7,111,134 | 6,936,188 |
| | |
| Gross Debt / Adjusted EBITDAR (LTM) | 2.5 | 2.7 |
| | |
| Net Debt (US$ thousands) | 5,257,775 | 5,221,427 |
| | |
| Net Debt / Adjusted EBITDAR (LTM) | 1.9 | 2.1 |
Note: Adjusted EBITDAR (LTM) refers to Adjusted EBITDAR (Last Twelve Months) (US$ thousands). For the ratios as of June 30, 2024, and December 31, 2023, it is calculated using the last twelve months as of June 30, 2024 (US$2,815,615) and the full twelve months in 2023 (US$2,533,274).
*Includes "Cash and cash equivalents" and Revolving Credit Facilities fully undrawn (two RCFs of US$600 million and US$500 million with maturities in 2025 and 2026, respectively, as of June 30, 2024).
LATAM Airlines Group S.A.
Consolidated Fleet
| | | | | | | | | | | |
| As of June 30, 2024 |
| Aircraft on Property, Plant & Equipment | Aircraft on Right of Use under IFRS16 | Total |
| | | |
| Passenger Aircraft | | | |
| Boeing 767-300ER | 10 | — | 10 |
| Boeing 777-300ER | 7 | 3 | 10 |
| Boeing 787-8 | 4 | 6 | 10 |
| Boeing 787-9 | 2 | 25 | 27 |
| Airbus A319-100 | 32 | 8 | 40 |
| Airbus A320-200 | 90 | 45 | 135 |
| Airbus A320-Neo | 1 | 23 | 24 |
| Airbus A321-200 | 19 | 30 | 49 |
| Airbus A321-Neo | — | 14 | 14 |
| TOTAL | 165 | 154 | 319 |
| | | |
| Cargo Aircraft | | | |
| Boeing 767-300F | 20 | 1 | 21 |
| TOTAL | 20 | 1 | 21 |
| | | |
| TOTAL FLEET | 185 | 155 | 340 |
| | | |
Note: This table includes 3 Boeing 767-300F, 4 Airbus A320-200 and 21 Airbus A319-100 that were reclassified from Property, Plant and Equipment to Assets Held for Sale.
LATAM Airlines Group S.A.
Reconciliation of Reported Amounts to Non-GAAP Items (in thousands of US Dollars)
LATAM Airlines Group S.A. ("LATAM" or "the Company") prepares its financial statements under “International Financial Reporting Standards” (“IFRS”) as issued by the IASB, however, for ease of presentation and comparison, the Income Statement in this report is presented in an Adapted by Nature Format. On some occasions, adjustments to these Income Statement figures are made for Special Items. These adjustments to include or exclude special items allows management an additional tool to understand and analyze its core operating performance and allow for more meaningful comparison in the industry. Therefore, LATAM believes these non-GAAP financial measures, derived from the consolidated financial statements but not presented in accordance with IFRS, may provide useful information to investors and others. In this table, you can find a reconciliation of the IFRS and the Adapted by Nature Format as LATAM reports its Income Statement in this earnings release for ease of comparison and further disclosure, as well as the adjustments made for Special Items.
LATAM has revised the methodology used to calculate Total Operating Expenses and EBITDA in order to more closely align with SEC guidelines governing the matter. With this, the revised financial figures presented will not be directly comparable to the financial figures previously reported in the Company's past publications.
EBITDA:
•Previously: Excluded costs associated with foreign exchange fluctuations, restructuring activities, indexation costs, and other gains and losses, which were incorporated in the line item “other income (expenses)”.
•Currently: With the revised methodology the EBITDA calculation now includes all these accounts.
•Note for Adjusted EBITDAR: Aligns with previously reported adjusted figures. In this case, all these lines are added back, along with other adjustments related to aircraft rental expenses and adjustments in connection with our Corporate Incentive Plan.
Total Operating Expenses:
•Previously: Excluded costs associated with foreign exchange fluctuations, restructuring activities, indexation costs, and other gains and losses, which were incorporated in the non-operational line item “other income (expenses)”.
•Currently: With the revised methodology the Total Operating Expenses calculation now includes costs associated with restructuring activities and other gains and losses.
•This change in methodology has an impact on the Operating Income and the unitary cost metric, cost per available seat kilometers - (“CASK”), as they are calculated from the Total Operating Expenses.
•However, regarding the adjusted Total Operating Expenses and other derived adjusted figures, these two lines are added back, along with other adjustments for aircraft rentals expense and adjustments in connection with our Corporate Incentive Plan. Therefore, the revised adjusted Total Operating Expenses and adjusted Operating Income align with previously reported adjusted figures, since it incorporates the same line items.
These non-GAAP items may not be comparable to similarly titled non-GAAP items of other companies and should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The tables below show these reconciliations:
| | | | | | | | | | | | | | | | | | | | | | | |
| For the three month period ended June 30 | | For the six month period ended June 30 |
| 2024 | 2023 | % Change | | 2024 | 2023 | % Change |
| | | | | | | |
| Cost of sales | (2,346,447) | (2,018,295) | 16.3% | | (4,740,306) | (4,187,364) | 13.2% |
| Distribution costs | (143,092) | (126,539) | 13.1% | | (301,384) | (247,898) | 21.6% |
| Administrative expenses | (193,706) | (177,574) | 9.1% | | (381,148) | (323,126) | 18.0% |
| Other expenses | (89,573) | (125,141) | -28.4% | | (230,552) | (231,585) | -0.4% |
| Other gains/(losses) | 3,304 | (1,440) | -329.4% | | (43,127) | (21,123) | 104.2% |
| TOTAL OPERATING EXPENSES | (2,769,514) | (2,448,989) | 13.1% | | (5,696,517) | (5,011,096) | 13.7% |
| Other gains/(losses) | (3,304) | 1,440 | -329.4% | | 43,127 | 21,123 | 104.2% |
| Adjustments for Corporate Incentive Plan | 15,684 | 19,258 | -18.6% | | 36,395 | 27,567 | 32.0% |
| Aircraft rentals expense | 1,012 | 23,464 | -95.7% | | 2,245 | 47,196 | -95.2% |
| ADJUSTED TOTAL OPERATING EXPENSES | (2,756,122) | (2,404,827) | 14.6% | | (5,614,750) | (4,915,210) | 14.2% |
| | | | | | | |
| TOTAL OPERATING EXPENSES | (2,769,514) | (2,448,989) | 13.1% | | (5,696,517) | (5,011,096) | 13.7% |
| Aircraft fuel expenses | 992,453 | 850,523 | 16.7% | | 2,016,826 | 1,910,282 | 5.6% |
| Operating Expenses (Ex-Fuel) | (1,777,061) | (1,598,466) | 11.2% | | (3,679,691) | (3,100,814) | 18.7% |
| ASKs (millions) | 37,737 | 32,477 | 16.2% | | 76,198 | 65,213 | 16.8% |
| CASK (Ex-Fuel) | (4.7) | (4.9) | -4.3% | | (4.8) | (4.8) | 1.6% |
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| ADJUSTED TOTAL OPERATING EXPENSES | (2,756,122) | (2,404,827) | 14.6% | | (5,614,750) | (4,915,210) | 14.2% |
| Aircraft fuel expenses | 992,453 | 850,523 | 16.7% | | 2,016,826 | 1,910,282 | 5.6% |
| Adjusted Operating Expenses (Ex-Fuel) | (1,763,669) | (1,554,304) | 13.5% | | (3,597,924) | (3,004,928) | 19.7% |
| ASKs (millions) | 37,737 | 32,477 | 16.2% | | 76,198 | 65,213 | 16.8% |
| ADJUSTED CASK Ex-Fuel (US$ cents) | (4.7) | (4.8) | -2.3% | | (4.7) | (4.6) | 2.5% |
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| For the three month period ended June 30 | | For the six month period ended June 30 |
| 2024 | 2023 | % Change | | 2024 | 2023 | % Change |
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| Operating lease payments | (126,945) | (108,729) | 16.8% | | (273,992) | (216,836) | 26.4% |
| Interest on finance leases | (17,748) | (124,513) | -85.7% | | (36,514) | (37,029) | -1.4% |
| Finance lease amortization | (81,451) | (56,695) | 43.7% | | (130,051) | (136,308) | -4.6% |
| Non-fleet lease liabilities | 5,167 | 4,478 | 15.4% | | 11,112 | 11,422 | -2.7% |
| FLEET CASH COSTS | (220,977) | (285,459) | -22.6% | | (429,445) | (378,751) | 13.4% |
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| NET INCOME/(LOSS) | 145,289 | 144,058 | 0.9% | | 405,243 | 265,116 | 52.9% |
| Income Taxes | 10,885 | 2,792 | 289.9% | | 26,028 | (4,087) | (736.8%) |
| Interest Expense | 189,445 | 172,613 | 9.8% | | 380,830 | 336,777 | 13.1% |
| Interest Income | (31,080) | (45,264) | -31.3% | | (62,530) | (63,186) | (1.0%) |
| Depreciation and Amortization | 344,789 | 287,405 | 20.0% | | 677,611 | 565,459 | 19.8% |
| EBITDA | 659,328 | 561,604 | 17.4% | | 1,427,182 | 1,100,079 | 29.7% |
| Aircraft rentals expense | 1,012 | 23,464 | -95.7% | | 2,245 | 47,196 | -95.2% |
EBITDAR | 660,340 | 585,068 | 12.9% | | 1,429,427 | 1,147,275 | 24.6% |
| Other gains/(losses) | (3,304) | 1,440 | -329.4% | | 43,127 | 21,123 | 104.2% |
| Foreign exchange gains/(losses) | (47,455) | (46,063) | 3.0% | | (87,082) | (63,471) | 37.2% |
| Results of indexation units | (6,680) | (1,062) | 529.0% | | (7,755) | (724) | 971.1% |
| Adjustments for Corporate Incentive Plan | 15,684 | 19,258 | -18.6% | | 36,395 | 27,567 | 32.0% |
| ADJUSTED EBITDAR | 618,585 | 558,641 | 10.7% | | 1,414,112 | 1,131,770 | 24.9% |
LATAM Airlines (PK) (USOTC:LTMAY)
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LATAM Airlines (PK) (USOTC:LTMAY)
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