TAP achieves a positive net income of 22.9 million in the first half of 2023

Thursday, August 31, 2023

TAP Air Portugal achieved a positive net profit of 22.9 million euros in the first half of the year, a remarkable fact given that this is the first time the company has recorded positive results in the first six months of a year since half-year results were published (2019).

The net income of 22.9 million in the first half of the year represents an improvement of 225 million euros compared to the same six-month period last year, when a negative result of 202.1 million euros was recorded. Compared to 2019, the post-pandemic period, the increase was 134.9 million euros.

This good result is based on the strong growth in operating revenues, which totaled 1.9 billion euros, with a significant increase of 600 million euros (+44.3%) compared to the same period in 2022. This growth is indicative of the measured approach adopted by TAP in capitalizing on market opportunities.

The Operating Results for the first half of the year show an exceptional performance in financial and commercial metrics during the first half. TAP posted a Recurring EBITDA of 361.7 million euros, with a margin of 19 per cent. Recurrent EBIT also remained strong, at 124.5 million euros, with a margin of 6.5 per cent, reinforcing TAP’s commitment to providing sustained value to stakeholders and maintaining a balanced approach to financial performance.

Also noteworthy in the first half of 2023 is TAP’s resilience in the Liquidity position. Despite the reimbursement of the 2019-2023 Bonds in the amount of EUR 200 million, TAP maintains a robust liquidity position of EUR 899.7 million. Furthermore, this financial fortitude resulted in a significant enhancement of the Net Debt / EBITDA ratio in the first half of 2023, reaching a level of 2.5x, a notable improvement on the 3.5x ratio recorded at the end of 2022. This demonstrates TAP’s disciplined financial management and prudent decision-making, as well as providing reassurance for investors.

Luís Rodrigues, CEO of TAP, considers that “the half-year results now presented underpin TAP’s sustained trend of commercial and financial improvement, achieving an excellent performance with a positive net income in the first half.

The operating margins and the deleveraging path, above the targets of the restructuring plan, prove the Group’s financial sustainability at a critical moment in our history. However, there is still a long way to go. Reengaging even more our People, cleaning our backlog, and fixing our operations have been key priorities, which have already enabled us to capitalize on the summer period. Demand remains strong, with bookings for the coming quarters reaching considerable figures, indicating an intense second half of the year, for which TAP will be prepared.”

With regards to operational traffic data, in the first half of 2023 (1H23), TAP carried a total of 7.6 million passengers, which represents an increase of 30.2 per cent on the previous year, reaching 96 per cent of the figures achieved in 2019. During this period, the total number of flights operated also increased by 17.9 per cent, reaching 89 per cent of pre-crisis levels.

Capacity exceeded pre-crisis levels, reaching 104%, representing an increase of 21.4% compared to the first half of 2022 (“1H22”). The Load Factor increased by 5.5 p.p. year-on-year to 80.2% in 1H23, also improving by 0.5 p.p. compared to the first half of 2019 (“1H19”).

In 1H23, operating revenues totaled 1,906.3 million euros, which represented an increase of 44.3% compared to 1H22 and an increase of 31.6% compared to 1H19. PRASK in the first half of 2023 was EUR 6.86 cents, having increased by 22.6% (+EUR 1.27 cents) when compared to the same period in 2022 and 29.0% (+EUR 1.54 cents) when compared to 2019.

Recurring operating costs increased by 35.0 per cent to EUR 1,781.8 million. The CASK of recurring operating costs increased by 11.2 per cent to EUR 7.12 cents compared to 1H22. Excluding fuel costs, the increase was 12.1 per cent when compared to 1H22, reaching a unit value of EUR 4.95 cents, 1.6 per cent higher than in 2019.

Recurrent EBITDA totaled 361.7 million euros in 1H23, with a margin of 19.0%, increasing by 131.2 million euros, or 56.9% compared to 1H22. Recurrent EBIT totaled 124.5 million euros in 1H23, with a margin of 6.5%, 123.1 million more than in 1H22.

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