Azul Reports Record Adj. Net Income of R$704 Million in 2018

São Paulo, March 14th, 2019 - Azul S.A., "Azul" (B3:AZUL4, NYSE:AZUL) the largest airline in Brazil by number of cities and departures, announces today its results for the fourth quarter of 2018 ("4Q18") and for the full year 2018. The following financial information, unless stated otherwise, is presented in Brazilian reais and in accordance with International Financial Reporting Standards (IFRS).

Financial and Operating Highlights for 4Q18

  • Operating income was R$282.9 million in 4Q18, representing a margin of 11.4%, even with the 17.3% devaluation of the Brazilian real and the 37.2% increase in fuel price per liter. Operating margin was 8.8% for the full year adjusting for non-recurring items.
  • EBITDAR increased 14.5% to R$762.7 million, representing a margin of 30.7% in 4Q18, making us one of the most profitable carriers in the Americas. For the full year, adjusted EBITDAR increased 13.5% reaching R$ 2.6 billion.
  • Net income totaled R$138.2 million, compared to R$297.4 million in 4Q17, mainly due to a R$154.4 million non-recurring gain recorded in 4Q17 related to the expiration of a call option on our TAP bonds. Adjusted net income in 2018 came in at R$703.6 million, compared to R$516.3 million the year before.
  • On a stage length adjusted basis RASK increased 7.6% in 2018 and 2.7% in 4Q18 compared to 2017 and 4Q17, respectively.
  • Passenger traffic grew 14.5% on a capacity increase of 14.1% resulting in a load factor of 83.0%, 0.3 percentage points higher than in 4Q17.
  • CASK ex-fuel decreased 8.1% despite the 17.3% depreciation of the Brazilian real. For the full year, CASK ex-fuel decreased 2.4%, in line with the Company’s guidance.
  • At the end of 4Q18, total liquidity position was R$4.0 billion, representing 43.9% of the last twelve months’ revenues. The Company generated R$266.2 million in free cash flow during the year.
  • Total debt considering the effect of currency swaps decreased R$63.6 million in the quarter to R$3.4 billion while Azul’s adjusted net debt to EBITDAR leverage ratio remained flat at 4.2x.
  • Azul’s operating fleet totaled 125 aircraft at the end of the quarter, including 20 next-generation A320neo aircraft, which represented 30% of total capacity.
  • TudoAzul recorded a 29.3% increase in gross billings (ex-Azul) in 2018 compared to 2017.
  • Azul Cargo Express recorded a 56.5% growth in revenue in 2018 compared to 2017.
  • Azul ranked as the most on-time low-cost carrier in the world in 2018 according to OAG’s Punctuality League, and as most on-time airline in Brazil, according to Flightstats.

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