TAP Air Portugal achieved a positive net profit of €22.9 million in the first half of the year. 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 compared to the same six-month period last year, when €202.1 million loss was recorded.
TAP attributes this “good result” on the strong growth in operating revenues, which totalled €1.9 billion, with a significant increase of €600 million (+44.3%) compared to the same period in 2022. The airline stated that the growth was “indicative of the measured approach adopted by TAP in capitalising on market opportunities”.
TAP posted a Recurring EBITDA of €361.7 million, with a margin of 19 per cent. Recurrent EBIT also remained strong, at €124.5 million, with a margin of 6.5 per cent.
Despite the reimbursement of the 2019-2023 bonds for €200 million, TAP maintains a robust liquidity position of €899.7 million. This also 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.
Luís Rodrigues, chief executive, TAP, stated: "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."
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, 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 €6.86 cents, having increased by 22.6% (+€1.27 cents) when compared to the same period in 2022 and 29.0% (+€1.54 cents) when compared to 2019.
Recurring operating costs increased by 35.0 per cent to €1,781.8 million. The CASK of recurring operating costs increased by 11.2 per cent to €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 €4.95 cents, 1.6 per cent higher than in 2019.
Recurrent EBITDA totaled €361.7 million in 1H23, with a margin of 19.0%, increasing by €131.2 million, or 56.9% compared to 1H22. Recurrent EBIT totaled €124.5 million in 1H23, with a margin of 6.5%, €123.1 million more than in 1H22.