UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K/A
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2021
Commission File Number: 001-38049
Azul S.A.
(Name of Registrant)
Edifício Jatobá, 8th floor, Castelo Branco Office Park
Avenida Marcos Penteado de Ulhôa Rodrigues, 939
Tamboré, Barueri, São Paulo, SP 06460-040, Brazil.
+55 (11) 4831 2880
(Address of Principal Executive Office)
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 ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ¨ No x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ¨ No x
|
Second Quarter
Results
2021
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|
|
Azul Reports Second Quarter
2021 Results with Record Liquidity and Unit Revenue Expansion
São Paulo, August 12, 2021
– 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 second quarter of 2021 (“2Q21”). 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
|
2Q21
|
2Q20
|
% ∆
|
2Q19
|
% ∆
|
Operating revenues (R$ million)
|
1,702.4
|
401.6
|
323.9%
|
2,617.7
|
-35.0%
|
Operating expenses (R$ million)¹
|
(2,102.5)
|
(1,221.8)
|
72.1%
|
(2,267.6)
|
-7.3%
|
ASKs (million)
|
6,105
|
1,395
|
337.7%
|
8,156
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-25.1%
|
RPKs (million)
|
4,681
|
1,016
|
360.7%
|
6,860
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-31.8%
|
PRASK (Cents)
|
23.2
|
20.3
|
14.6%
|
30.5
|
-23.9%
|
RASK (R$ cents)
|
27.9
|
28.8
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-3.2%
|
32.1
|
-13.1%
|
[1]
Operating expenses were adjusted for non-recurring items recorded under other expenses netting R$1.7 million in 2Q21 from COVID-19 related
aircraft redeliveries expenses and revised non-cash provisions, partially offset by the reversal
of an impairment loss of E1s that have returned to the fleet as dedicated freighters. Operating expenses in 2Q20 and 2Q19 were adjusted
for non-recurring items totaling R$203.6 million and R$8.4 million, respectively.
|
§
|
During the second quarter of
2021, Azul continued its network recovery, reaching 130 destinations served, compared to 116 pre-pandemic.
|
|
§
|
Operating revenues totaled R$1.7
billion for the second quarter of the year. PRASK increased 14.6% compared to 2Q20 and 4.2% compared to 1Q21. These figures are further
evidence of our rational capacity deployment and the sustainable competitive advantages of our network and business model.
|
|
§
|
Azul Cargo had another record
revenue quarter. Net revenue grew 137.2% compared to 2Q19 even with 33.2% fewer departures, driven by strong demand in our logistics solutions
supported by our domestic and international network.
|
|
§
|
Operating expenses decreased
7.3% or R$165.1 million compared to 2Q19, mainly driven by lower capacity-related expenses and by cost reduction initiatives implemented
since the onset of the pandemic to ensure higher operational efficiency going forward.
|
|
§
|
During the quarter, Azul’s
operational cash inflows surpassed operating cash outflows by R$421.3 million. At the end of 2Q21, our immediate liquidity position was
the highest in our history at R$5.5 billion. Total liquidity, including long-term investments and receivables, maintenance reserves and
deposits, reached R$8.2 billion, an increase of 45.5% compared to 2Q20.
|
|
§
|
In June, Azul successfully concluded
a public offering of US$600 million in unsecured bonds at a 7.375% yield. We were the first and only airline in Latin America to issue
new unsecured debt since the onset of the COVID-19 pandemic.
|
|
§
|
As we exit the second quarter,
which was impacted by weak seasonality and the second wave of the COVID-19 pandemic, recent booking trends are very encouraging. We have
seen an acceleration in the demand recovery, leading to an increase in fares. Our booked leisure and corporate fares are currently all
higher than 2019 levels.
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|
Second Quarter
Results
2021
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Management Comments
Once again, I am grateful for the dedication
and perseverance of our Crewmembers, taking care of Azul and our customers day after day. Our strong
culture has been essential as we successfully navigate the challenges of the COVID-19 pandemic.
In the second quarter, Brazil was impacted
by a second wave of the pandemic, especially in the month of April. Since then, the vaccination effort in Brazil has accelerated, leading
to a decrease in cases, hospitalizations and daily casualties. At this moment, more than 155 million doses have been applied, and
until the end of the year a total of 600 million doses are expected to be delivered. By the end of September, 100% of Brazilian adults
will have received at least one dose of COVID-19 vaccine. As a result, the economy has safely started to reopen. Restrictions on businesses,
restaurants and other public places have been removed. Schools are back to in-person learning and
our corporate customers are returning to the office.
With
this, demand recovery has accelerated, leading to encouraging traffic results such as our 83% domestic load factor in July. With
our traffic having already surpassed 2019 levels, we have turned our focus to recovering our fares and unit revenues. Our PRASK increased
14.6% compared to 2Q20 and 4.2% to 1Q21, clearly demonstrating our rational capacity deployment and the sustainable competitive advantages
of our network and business model.
We continued adding new routes and destinations
and are now flying to 130 cities, an impressive 14 more destinations compared to pre-pandemic levels. Azul’s business model is unsurpassed
in terms of network effect, and as demand recovers and we add destinations to our map, this improves revenue and profitability in the
entire network. This also contributes to the local economy, providing employment and stimulating trade and tourism, among other benefits.
As we exit the second quarter, which was impacted
by weak seasonality and the second wave of the COVID-19 pandemic, recent booking trends are even more encouraging. Over the last several
weeks, we have seen the highest daily bookings and average fares since the onset of the pandemic. Booked average fares are now clearly
above 2019 levels, both in the leisure and the corporate segments. This is a significant development as we prepare for the second half,
seasonally the strongest part of the year.
We continued to develop our logistics business,
leveraging Azul’s unsurpassed network and flexible fleet. As a result, Azul Cargo had another record quarter, with net revenue growing
137.2% compared to 2Q19 and 27.4% compared to 1Q21.
We ended the quarter with R$5.5 billion in
immediate liquidity and R$8.2 billion in total liquidity, both the highest in our history. In June, we raised US$600 million in bonds
maturing in 2026, the first and only airline in Latin America to issue unsecured debt since the start of the COVID-19 pandemic. Our offer
was 7.7x oversubscribed, enabling us to compress yields to 7.375% yield, the lowest cost of capital among our peers. The capital raised,
together with our operational cash generation, will be used to repay deferrals and short-term debt and to fund capital expenses to prepare
Azul for the future.
We continued enhancing our industry-leading
customer experience by offering the fastest Wi-Fi in the region, already installed in 23 of our aircraft. In addition, we led the industry
in customer service metrics as measured by Consumidor.gov, as disclosed by ANAC in July.
In 2020, TripAdvisor rated Azul as the Best
Airline in the World, and we also want to be the Best Airline for the World. We have continued to increase our dedication to ESG and have
set an ambitious target to reach net zero carbon emissions by 2045, ahead of the industry. One
significant step towards that objective is our recently announced strategic partnership with Lilium to develop an eVTOL offering in Brazil.
Through the use of 100% electric airplanes with zero carbon emissions, we will be able to continue expanding our network and leveraging
economic and social development in Brazil in an unprecedented way.
Looking forward, I feel confident that, as
vaccinations continue to progress and corporations return to the office, we will see a strong revenue environment during the second half
of the year. Our unique business model has allowed us to lead the industry in capacity and fare recovery, and we now turn towards the
future and all the exciting opportunities available to us.
John Rodgerson, CEO of Azul S.A.
|
Second Quarter
Results
2021
|
|
|
Consolidated Financial Results
The following revised income statement and
operating data should be read in conjunction with the quarterly results comments presented below.
Income statement (R$ million)¹
|
2Q21
|
2Q20
|
% ∆
|
2Q19
|
% ∆
|
|
|
|
|
|
|
OPERATING REVENUES
|
|
|
|
|
|
Passenger revenue
|
1,417.4
|
282.5
|
401.7%
|
2,487.6
|
-43.0%
|
Other revenue
|
284.9
|
119.1
|
139.3%
|
130.1
|
119.1%
|
Total operating revenues
|
1,702.4
|
401.6
|
323.9%
|
2,617.7
|
-35.0%
|
OPERATING EXPENSES
|
|
|
|
|
|
Aircraft fuel
|
609.4
|
67.3
|
805.5%
|
747.6
|
-18.5%
|
Salaries, wages and benefits
|
421.2
|
220.0
|
91.5%
|
425.1
|
-0.9%
|
Depreciation and amortization
|
349.3
|
495.9
|
-29.6%
|
383.1
|
-8.8%
|
Landing fees
|
138.8
|
43.8
|
217.2%
|
169.3
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-18.0%
|
Traffic and customer servicing
|
80.0
|
27.4
|
192.4%
|
110.1
|
-27.3%
|
Sales and marketing
|
74.4
|
56.4
|
31.9%
|
108.9
|
-31.6%
|
Maintenance materials and repairs
|
141.3
|
93.2
|
51.7%
|
74.7
|
89.2%
|
Other operating expenses
|
288.1
|
217.9
|
32.2%
|
248.8
|
15.8%
|
Total operating expenses
|
2,102.5
|
1,221.8
|
72.1%
|
2,267.6
|
-7.3%
|
Adjusted operating income (loss)
|
(400.2)
|
(820.2)
|
-51.2%
|
350.1
|
n.a.
|
Adjusted operating income (loss) Margin
|
-23.5%
|
-204.2%
|
+180.7 p.p.
|
13.4%
|
n.a.
|
Adjusted EBITDA
|
(50.9)
|
(324.3)
|
-84.3%
|
733.2
|
n.a.
|
Adjusted EBITDA margin
|
-3.0%
|
-80.8%
|
+77.8 p.p.
|
28.0%
|
n.a.
|
|
-
|
-
|
|
-
|
|
FINANCIAL RESULT²
|
|
|
|
|
|
Financial income
|
30.5
|
20.8
|
46.8%
|
20.6
|
47.9%
|
Financial expense
|
(824.5)
|
(603.0)
|
36.7%
|
(313.1)
|
163.4%
|
Derivative financial instruments
|
(10.8)
|
(265.2)
|
-95.9%
|
42.3
|
n.a.
|
Foreign currency exchange, net
|
2,279.5
|
(1,039.8)
|
n.a.
|
203.7
|
1018.9%
|
Related parties result
|
(1.3)
|
(238.9)
|
-99.5%
|
1.9
|
n.a.
|
Income (loss) before income taxes²
|
1,073.2
|
(2,946.4)
|
n.a.
|
305.5
|
251.3%
|
Income tax and social contribution
|
-
|
5.6
|
n.a.
|
(1.3)
|
n.a.
|
Deferred income tax and social contribution
|
-
|
4.0
|
n.a.
|
47.4
|
n.a.
|
Net income (loss)²
|
1,073.2
|
(2,936.8)
|
n.a.
|
351.6
|
205.2%
|
Net margin
|
63.0%
|
-731.3%
|
n.a.
|
13.4%
|
+49.6 p.p.
|
Adjusted net income (loss)³
|
(1,168.6)
|
(1,488.0)
|
-21.5%
|
175.9
|
n.a.
|
Adjusted net income (loss) margin³
|
-68.6%
|
-370.5%
|
+301.9 p.p.
|
6.7%
|
n.a.
|
Fully diluted shares
|
406.0
|
351.9
|
15.3%
|
344.4
|
17.9%
|
Diluted EPS
|
2.64
|
(8.58)
|
n.a.
|
1.03
|
156.3%
|
Diluted EPADR (US$)
|
0.28
|
(0.89)
|
n.a.
|
0.20
|
40.1%
|
Adjusted EPS
|
(3.38)
|
(4.35)
|
-22.3%
|
0.52
|
n.a.
|
Adjusted EPADR (US$)
|
(1.91)
|
(2.42)
|
-21.0%
|
0.40
|
n.a.
|
[1]
Operating expenses were adjusted for non-recurring items recorded under other expenses netting R$1.7 million in 2Q21 from COVID-19 related
aircraft redeliveries expenses and revised non-cash provisions, partially offset by the reversal
of an impairment loss of E1s that have returned to the fleet as dedicated freighters. Operating expenses in 2Q20 and 2Q19 were adjusted
for non-recurring items totaling R$203.6 million and R$8.4 million, respectively.
² Financial results adjusted for convertible
debentures expenses given current stock price is considerably higher than strike price. One ADR equals three preferred shares (PNs).
³ Net loss adjusted for unrealized derivatives
results and foreign currency exchange rate totaling R$2.2 billion gain in 2Q21, R$1.4 billion loss in 2Q20 and R$175.7 million loss in
2Q19. One ADR equals three preferred shares (PNs).
|
Second Quarter
Results
2021
|
|
|
Operating Data
|
2Q21
|
2Q20
|
% ∆
|
2Q19
|
% ∆
|
|
|
|
|
|
|
ASKs (million)
|
6,105
|
1,395
|
337.7%
|
8,156
|
-25.1%
|
Domestic
|
5,653
|
1,151
|
391.0%
|
6,317
|
-10.5%
|
International
|
453
|
244
|
85.8%
|
1,840
|
-75.4%
|
RPKs (million)
|
4,681
|
1,016
|
360.7%
|
6,860
|
-31.8%
|
Domestic
|
4,443
|
850
|
422.7%
|
5,250
|
-15.4%
|
International
|
238
|
166
|
43.3%
|
1,610
|
-85.2%
|
Load factor (%)
|
76.7%
|
72.8%
|
+3.8 p.p.
|
84.1%
|
-7.4 p.p.
|
Domestic
|
78.6%
|
73.8%
|
+4.8 p.p.
|
83.1%
|
-4.5 p.p.
|
International
|
52.5%
|
68.1%
|
-15.6 p.p.
|
87.5%
|
-35.0 p.p.
|
|
|
|
|
|
|
Average fare (R$)
|
316.0
|
329.0
|
-3.9%
|
379.7
|
-16.8%
|
Revenue passengers (thousands)
|
4,485
|
859
|
422.3%
|
6,551
|
-31.5%
|
Block hours
|
78,435
|
16,552
|
373.9%
|
117,153
|
-33.0%
|
Aircraft utilization (hours per day)
|
6.2
|
1.6
|
282.6%
|
11.1
|
-44.2%
|
Departures
|
46,885
|
8,811
|
432.1%
|
70,164
|
-33.2%
|
Average stage length (km)
|
1,055
|
1,182
|
-10.7%
|
1,013
|
4.1%
|
End of period operating passenger aircraft
|
161
|
151
|
6.6%
|
128
|
25.8%
|
Fuel consumption (thousands of liters)
|
193,700
|
43,292
|
347.4%
|
279,023
|
-30.6%
|
Full-time-equivalent employees
|
12,505
|
8,671
|
44.2%
|
12,218
|
2.3%
|
End of period FTE per aircraft
|
78
|
57
|
35.3%
|
95
|
-18.6%
|
|
|
|
|
|
|
Yield per passenger kilometer (cents)
|
30.28
|
27.81
|
8.9%
|
36.26
|
-16.5%
|
RASK (cents)
|
27.88
|
28.79
|
-3.2%
|
32.09
|
-13.1%
|
PRASK (cents)
|
23.22
|
20.26
|
14.6%
|
30.50
|
-23.9%
|
CASK (cents)¹
|
34.44
|
87.60
|
-60.7%
|
27.80
|
23.9%
|
CASK ex-fuel (cents)¹
|
24.46
|
82.78
|
-70.5%
|
18.64
|
31.2%
|
Fuel cost per liter
|
3.15
|
1.55
|
102.4%
|
2.68
|
17.4%
|
Break-even load factor (%)
|
94.7%
|
221.6%
|
-126.9 p.p.
|
72.9%
|
+21.8 p.p.
|
|
|
|
|
|
|
Average exchange rate
|
5.30
|
5.39
|
-1.6%
|
3.92
|
35.2%
|
End of period exchange rate
|
5.00
|
5.48
|
-8.7%
|
3.83
|
30.5%
|
Inflation (IPCA - LTM)
|
8.35%
|
2.13%
|
+6.2 p.p.
|
3.37%
|
+5.0 p.p.
|
WTI (average per barrel, US$)
|
66.10
|
27.88
|
137.1%
|
62.33
|
6.0%
|
Heating Oil (US$)
|
199.99
|
97.74
|
104.6%
|
198.50
|
0.8%
|
¹ Adjusted for non-recurring items
Operating Revenue
In 2Q21, Azul
recorded operating revenues of R$1.7 billion, compared to R$2.6 billion in 2Q19, representing a decrease of 35.0% year over two years
due to the reduction in demand from the COVID-19 pandemic. Passenger revenues increased 401.7%
year over year, showing a clear demand recovery particularly after the acceleration of vaccinations in Brazil.
Cargo and
other revenue increased 119.1% compared to 2Q19, totaling R$284.9 million in 2Q21, mainly due to the 137.2%
increase in cargo net revenue driven by strong demand for our logistics solutions supported by our domestic and international network.
|
Second Quarter
Results
2021
|
|
|
¹ Adjusted for non-recurring items
Operating Expenses
Total operating expenses decreased 7.3% or
R$165.1 million compared to 2Q19, mainly due to lower capacity-related expenses and cost reduction initiatives. The breakdown of our main
operating expenses compared to 2Q19 is as follows:
|
§
|
Aircraft fuel decreased
18.5% to R$609.4 million, mostly due to a 25.1% reduction in capacity and reduction in fuel burn as a result of our more efficient next-generation
fleet, partially offset by a 17.4% increase in jet fuel prices.
|
|
§
|
Salaries, wages and benefits decreased
1% to R$421.2 million, mainly due to reduced capacity and process improvement initiatives to increase productivity, partially offset by
the non-cash accounting impact of long-term incentives, to be realized over a period of up to 8 years and driven by an increase in our
stock price and volatility. Excluding the impact of long-term incentives, salaries would be down 6.8%.
|
|
§
|
Depreciation
and amortization decreased 8.8% or R$33.9 million, driven
by a reduction in the right-of-use asset as a result of lease contract modifications in 3Q20.
|
|
§
|
Landing fees decreased
18.0% or R$30.5 million, mostly due to the 33.2% reduction in departures caused by the pandemic.
|
|
§
|
Traffic and customer servicing
expenses decreased 27.3% or R$30.1 million, mostly due to a 31.5% reduction in the number of passengers transported in 2Q21 compared to
2Q19.
|
|
§
|
Sales and marketing decreased
31.6%, or R$34.4 million, mostly driven by a reduction of 43.0% in passenger revenue and fewer marketing campaigns, partially offset by
an increase in cargo express shipments, which have higher commission fees.
|
|
§
|
Maintenance materials and
repairs increased R$66.6 million, mostly driven by a 35.2% average depreciation of the Brazilian real and a higher number of maintenance
events in the quarter to prepare the fleet for the recovery, partially offset by a higher share of maintenance checks performed in-house.
|
|
§
|
Other operating expenses decreased
15.8%, mostly due to the reduction in capacity, partially offset by the depreciation of the Brazilian real against the U.S. dollar, an
increase in cargo expenses and the revision of several non-cash provisions due to restructuring of the operations.
|
|
Second Quarter
Results
2021
|
|
|
Non-Operating Results
¹Excludes convertible debentures expenses given
current stock price is considerably higher than strike price.
Net financial expenses resulted in
a net loss of R$794.0 million, mainly due to the lease modifications and the corresponding increase in
interest accrual.
Derivative
financial instruments resulted in a net loss of R$10.8 million in 2Q21 compared to a gain of R$42.3 million in 2Q19, mostly due to
a fuel hedge gain recorded in 2Q19.
As of June 30, 2021, Azul has hedged 10%
of its expected fuel consumption for the next twelve months by using mostly heating oil derivatives.
Foreign currency exchange, net. Azul
recorded a non-cash foreign currency gain of R$2.3 billion in 2Q21, mainly due to the 12.2% end of period appreciation of the Brazilian
real against US dollar from March 31, 2021 to June 30, 2021, resulting in a decrease in loans and lease liabilities denominated in foreign
currency.
Liquidity and Financing
Azul ended the quarter with a record R$5.5
billion in immediate liquidity, including cash and cash equivalents, accounts receivable and short-term investments. This represented
90.4% of our last twelve months’ revenue. Total liquidity including deposits, maintenance reserves, and long-term investments and
receivables was R$8.2 billion as of June 30, 2021. This does not include spare parts or other unencumbered assets like TudoAzul and Azul
Cargo. We have no significant debt repayments in the next two years and have no restricted cash.
Debt amortization as of June 30th,
2021 (R$ million)¹
|
¹Excludes convertible debentures
given current stock price is considerably higher than strike price.
|
Second Quarter
Results
2021
|
|
|
Liquidity (R$ million)
|
2Q21
|
1Q21
|
% ∆
|
2Q20
|
% ∆
|
Cash and cash equivalents
|
4,339.1
|
2,275.4
|
90.7%
|
1,566.4
|
177.0%
|
Short-term investments
|
1.0
|
10.6
|
-90.1%
|
64.7
|
-98.4%
|
Accounts receivable
|
1,190.6
|
1,018.9
|
16.8%
|
771.2
|
54.4%
|
Immediate liquidity
|
5,530.7
|
3,305.0
|
67.3%
|
2,402.3
|
130.2%
|
Cash as % of LTM revenues
|
90.4%
|
68.6%
|
+21.8 p.p.
|
25.3%
|
+65.1 p.p.
|
Long-term investments and receivables
|
1,026.5
|
1,124.2
|
-8.7%
|
976.9
|
5.1%
|
Security deposits and maintenance reserves
|
1,667.3
|
1,849.9
|
-9.9%
|
2,273.0
|
-26.6%
|
Total Liquidity
|
8,224.6
|
6,279.1
|
31.0%
|
5,652.2
|
45.5%
|
Gross debt increased 5.1% or R$995.5 million
compared to March 31, 2021, mostly due to the approximately R$3 billion of capital raised in 2Q21 partially offset by the 12.2% end of
period appreciation of the Brazilian real and lease and debt payments in the quarter.
As of June 30, 2021, Azul’s average
debt maturity excluding lease liabilities and convertible debentures was 3.4 years, with an average interest rate of 6.6%. Average interest
rate on local and dollar-denominated obligations were 7.2% and 6.4%, respectively.
Loans and financing (R$ million)¹
|
2Q21
|
1Q21
|
% ∆
|
2Q20
|
% ∆
|
|
|
|
|
|
|
Operating lease liabilities
|
12,080.1
|
13,213.1
|
-8.6%
|
13,112.0
|
-7.9%
|
Finance lease liabilities
|
847.9
|
927.0
|
-8.5%
|
1,082.4
|
-21.7%
|
Other aircraft loans and financing
|
1,127.2
|
1,333.8
|
-15.5%
|
1,389.2
|
-18.9%
|
Loans and financing
|
6,338.0
|
3,922.8
|
61.6%
|
3,649.2
|
73.7%
|
Currency hedges
|
-
|
1.0
|
n.a.
|
(2.1)
|
n.a.
|
% of non-aircraft debt in local currency
|
22%
|
41%
|
-19.0 p.p.
|
40%
|
-18.1 p.p.
|
% of total debt in local currency
|
8%
|
9%
|
-1.6 p.p.
|
9%
|
-1.0 p.p.
|
|
|
|
|
|
|
Gross debt
|
20,393.2
|
19,397.7
|
5.1%
|
19,230.7
|
6.0%
|
¹ Considers the effect of hedges on debt. Excludes
convertible debentures expenses given current stock price is considerably higher than strike price.
.
The table below presents additional information
related to our leases as of June 30, 2021:
(R$ million)
|
2Q21
|
1Q21
|
% ∆
|
2Q19
|
% ∆
|
|
|
|
|
|
|
Operating leases
|
|
|
|
|
|
Payments made
|
296.1
|
292.7
|
1.2%
|
444.1
|
-33.3%
|
Weighted average remaining lease term
|
8.1
|
8.1
|
0.0%
|
7.7
|
5.3%
|
|
|
|
|
|
|
Finance leases
|
|
|
|
|
|
Payments made
|
23.6
|
14.9
|
58.4%
|
53.9
|
-56.2%
|
Weighted average remaining lease term
|
5.0
|
5.3
|
-5.2%
|
4.7
|
5.9%
|
Azul’s key financial ratios and debt
maturity are presented below:
Key financial ratios (R$ million)
|
2Q21
|
1Q21
|
% ∆
|
2Q20
|
% ∆
|
|
|
|
|
|
|
Cash1
|
6,557.3
|
4,429.2
|
48.0%
|
3,379.2
|
94.0%
|
Gross debt²
|
20,393.2
|
19,397.7
|
5.1%
|
19,230.7
|
6.0%
|
Net debt²
|
13,835.9
|
14,968.5
|
-7.6%
|
15,851.5
|
-12.7%
|
¹ Includes
cash and cash equivalents, short-term and long-term investments and receivables.
² Excludes convertible debentures given current
stock price is considerably higher than strike price.
|
Second Quarter
Results
2021
|
|
|
Fleet and Capital Expenditures
As of June 30, 2021, Azul had a total passenger
operating fleet of 161 aircraft and a passenger contractual fleet of 178 aircraft, with an average aircraft age of 6.8 years excluding
Azul Conecta. At the end of 2Q21, the 17 aircraft not included in our operating fleet consisted of 11 aircraft subleased to TAP, 3 subleased
to Breeze, 1 subleased to Minas Gerais and 2 aircraft in the process of exiting the fleet.
Aircraft
|
2Q21
|
1Q21
|
% ∆
|
2Q20
|
% ∆
|
Airbus widebody
|
12
|
12
|
0.0%
|
10
|
20.0%
|
Airbus narrowbody
|
46
|
45
|
2.2%
|
42
|
9.5%
|
Embraer E2
|
9
|
9
|
0.0%
|
5
|
80.0%
|
Embraer E1
|
58
|
59
|
-1.7%
|
69
|
-15.9%
|
ATRs
|
39
|
39
|
0.0%
|
39
|
0.0%
|
Cessna
|
14
|
14
|
0.0%
|
14
|
0.0%
|
Total
|
178
|
178
|
0.0%
|
179
|
-0.6%
|
Aircraft under operating leases
|
150
|
151
|
-0.7%
|
146
|
2.7%
|
¹ Includes 15 aircraft subleased.
Aircraft
|
2Q21
|
1Q21
|
% ∆
|
2Q20
|
% ∆
|
Airbus widebody
|
11
|
11
|
0.0%
|
10
|
10.0%
|
Airbus narrowbody
|
46
|
45
|
2.2%
|
42
|
9.5%
|
Embraer E2
|
9
|
9
|
0.0%
|
5
|
80.0%
|
Embraer E1
|
49
|
48
|
2.1%
|
48
|
2.1%
|
ATRs
|
33
|
33
|
0.0%
|
33
|
0.0%
|
Cessna
|
13
|
13
|
0.0%
|
13
|
0.0%
|
Total
|
161
|
159
|
1.3%
|
151
|
6.6%
|
Capex
Capital expenditures
totaled R$132.0 million in 2Q21, compared to R$58.9 million in 2Q20, mostly due to engine overhaul events and the acquisition of
spare parts and engines in the quarter to prepare the fleet for the second half of the year. Capital expenditures in 2Q19 were R$365.3
million.
(R$ million)
|
2Q21
|
2Q20
|
% ∆
|
2Q19
|
% ∆
|
Aircraft related
|
40.6
|
19.2
|
111.4%
|
187.1
|
-78.3%
|
Maintenance and checks
|
39.3
|
12.4
|
217.7%
|
77.8
|
-49.5%
|
Other
|
25.7
|
10.4
|
146.8%
|
67.4
|
-61.9%
|
Intangible Assets
|
26.4
|
16.9
|
56.2%
|
33.0
|
-20.2%
|
CAPEX
|
132.0
|
58.9
|
124.2%
|
365.3
|
-63.9%
|
|
Second Quarter
Results
2021
|
|
|
Environmental, Social and Governance (“ESG”)
Responsibility
The table below presents Azul’s key
ESG information according to the Sustainability Accounting Standards Board (SASB) standard for the airline industry:
¹ Excludes Azul Conecta’s aircraft.
|
Second Quarter
Results
2021
|
|
|
Conference Call Details
Thursday, August 12th, 2021
11:00 a.m. (EDT) | 12:00 p.m. (Brasília time)
USA: +1 412 717-9627
Brazil: +55 11 3181-8565 or +55 11 4210-1803
Verbal Code: Azul
Webcast: www.voeazul.com.br/ir
Replay:
+55 11 3193-1012 or +55 11 2820-4012
Code: 8622178#
About Azul
Azul Azul S.A. (B3: AZUL4, NYSE: AZUL), the
largest airline in Brazil by number of flight departures and cities served, offers around 700 daily flights to more than 120 destinations.
With a passenger operating fleet of more than 160 aircraft and more than 12,000 crewmembers, Azul has a network of more than 200 non-stop
routes. In 2020 Azul was awarded best airline in the world by TripAdvisor, the first time a Brazilian Flag Carrier ranked number one in
the Traveler’s Choice Awards. For more information visit www.voeazul.com.br/ir.
Contact:
|
|
|
|
|
|
|
|
|
|
|
|
Investor Relations
|
|
|
Media Relations
|
Tel: +55 11 4831 2880
|
|
|
Tel: +55 11 4831 1245
|
invest@voeazul.com.br
|
|
|
imprensa@voeazul.com.br
|
|
Second Quarter
Results
2021
|
|
|
Balance Sheet – IFRS
(R$ million)
|
June 30, 2021
|
June 30, 2020
|
December 31, 2020
|
Assets
|
17,386.7
|
15,164.1
|
15,794.5
|
Current assets
|
6,755.2
|
3,489.2
|
5,417.4
|
Cash and cash equivalents
|
4,339.1
|
1,566.4
|
3,064.8
|
Short-term investments
|
1.0
|
64.7
|
91.8
|
Trade and other receivables
|
1,111.2
|
622.6
|
875.4
|
Sublease receivables
|
79.4
|
148.6
|
123.5
|
Inventories
|
479.2
|
399.3
|
402.6
|
Security deposits and maintenance reserves
|
257.3
|
310.7
|
318.5
|
Assets held for sale
|
-
|
43.6
|
-
|
Taxes recoverable
|
124.4
|
43.2
|
133.7
|
Derivative financial instruments
|
68.2
|
74.3
|
79.2
|
Prepaid expenses
|
152.8
|
96.4
|
136.4
|
Other current assets
|
142.6
|
119.4
|
191.6
|
Non-current assets
|
10,631.5
|
11,674.9
|
10,377.0
|
Long-term investments
|
824.0
|
754.3
|
854.5
|
Sublease receivables
|
202.5
|
222.6
|
189.5
|
Security deposits and maintenance reserves
|
1,410.0
|
1,962.4
|
1,235.6
|
Derivative financial instruments
|
222.9
|
298.9
|
349.1
|
Prepaid expenses
|
16.4
|
20.0
|
18.2
|
Taxes recoverable
|
-
|
327.7
|
-
|
Deferred income taxes
|
-
|
24.6
|
-
|
Other non-current assets
|
228.4
|
299.9
|
149.5
|
Property, equipment and right of use assets
|
6,404.0
|
6,620.2
|
6,410.4
|
Intangible assets
|
1,323.2
|
1,144.3
|
1,170.3
|
Liabilities and equity
|
17,386.7
|
15,164.1
|
15,794.5
|
Current liabilities
|
10,363.0
|
9,767.5
|
10,212.6
|
Loans and financing
|
250.5
|
1,177.5
|
858.3
|
Current maturities of lease liabilities
|
3,152.4
|
2,196.9
|
2,272.3
|
Accounts payable
|
2,216.3
|
2,599.0
|
2,396.5
|
Air traffic liability
|
2,564.2
|
1,824.7
|
2,488.9
|
Reimbursement to clients
|
213.8
|
-
|
221.3
|
Salaries, wages and benefits
|
550.0
|
379.6
|
400.4
|
Insurance premiums payable
|
19.9
|
32.0
|
52.4
|
Taxes payable
|
47.8
|
30.9
|
55.3
|
Federal tax installment payment program
|
52.5
|
15.2
|
13.4
|
Derivative financial instruments pcp
|
78.1
|
246.1
|
173.8
|
Provisions
|
926.7
|
1,026.9
|
853.8
|
Other current liabilities
|
290.8
|
238.7
|
426.3
|
Non-current liabilities
|
22,766.3
|
18,044.9
|
19,730.6
|
Loans and financing
|
9,647.0
|
3,860.8
|
6,502.2
|
Long-term obligations under lease liabilities
|
9,775.6
|
11,997.5
|
10,248.5
|
Accounts payable
|
621.2
|
-
|
323.1
|
Derivative financial instruments
|
177.7
|
267.6
|
247.3
|
Federal tax installment payment program
|
244.5
|
115.1
|
108.5
|
Provision
|
1,862.2
|
1,575.7
|
1,988.7
|
Other non-current liabilities
|
438.1
|
228.2
|
312.4
|
Equity
|
(15,742.5)
|
(12,648.2)
|
(14,148.7)
|
Issued capital
|
2,290.3
|
2,245.1
|
2,267.0
|
Capital reserve
|
1,959.5
|
1,937.7
|
1,947.9
|
Treasury shares
|
(17.4)
|
(15.6)
|
(13.2)
|
Accumulated other comprehensive income (loss)
|
0.7
|
(8.0)
|
0.7
|
Accumulated losses
|
(19,975.7)
|
(16,807.4)
|
(18,351.1)
|
|
Second Quarter
Results
2021
|
|
|
Cash Flow Statement – IFRS
(R$ million)
|
2Q21
|
2Q20
|
% ∆
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
Net gain (loss) for the period
|
1,162.1
|
(3,140.4)
|
n.a.
|
Total non-cash adjustments
|
|
|
|
Depreciation and amortization
|
349.3
|
495.9
|
-29.6%
|
Unrealized derivatives
|
33.6
|
409.0
|
-91.8%
|
Exchange (gain) and losses in foreign currency
|
(2,416.7)
|
1,009.1
|
n.a.
|
Interest expenses on assets and liabilities
|
776.3
|
461.5
|
68.2%
|
Related parties
|
-
|
232.1
|
n.a.
|
Deferred income tax and social contribution
|
-
|
(4.0)
|
n.a.
|
Provisions
|
8.7
|
145.9
|
-94.1%
|
Result of lease agreements modification
|
(4.0)
|
(150.1)
|
-97.3%
|
Impairment and other
|
(84.8)
|
(52.0)
|
63.2%
|
Changes in operating assets and liabilities
|
|
|
|
Trade and other receivables
|
(258.1)
|
289.9
|
n.a.
|
Sublease receivables
|
13.6
|
(26.3)
|
n.a.
|
Security deposits and maintenance reserves
|
(41.2)
|
43.1
|
n.a.
|
Prepaid expenses
|
(3.9)
|
97.6
|
n.a.
|
Other assets
|
(27.5)
|
267.0
|
n.a.
|
Derivatives
|
4.1
|
0.1
|
6042.4%
|
Accounts payable
|
(33.2)
|
482.9
|
n.a.
|
Salaries, wages and employee benefits
|
136.7
|
(6.5)
|
n.a.
|
Air traffic liability
|
230.9
|
131.6
|
75.4%
|
Provision taxes, civil and labor risks
|
(36.0)
|
(12.6)
|
186.0%
|
Other liabilities
|
136.5
|
(60.4)
|
n.a.
|
Interest paid
|
(165.7)
|
(104.9)
|
58.0%
|
Income tax and social contribution paid
|
-
|
-
|
n.a.
|
Net cash provided (used) by operating activities
|
(219.4)
|
508.4
|
n.a.
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
Short-term investment
|
9.6
|
677.6
|
-98.6%
|
Acquisition of subsidiary , net of cash acquired
|
-
|
(4.7)
|
n.a.
|
Acquisition of intangible
|
(26.4)
|
(16.9)
|
56.2%
|
Acquisition of property and equipment
|
(105.6)
|
(42.0)
|
151.5%
|
Net cash generated (used in) investing activities
|
(122.4)
|
614.0
|
n.a.
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
Loans and financing
|
|
|
|
Proceeds
|
3,004.1
|
46.8
|
6321.3%
|
Repayment
|
(242.2)
|
(15.4)
|
1472.3%
|
Repayment lease debt
|
(289.3)
|
(85.3)
|
239.1%
|
Capital increase
|
1.0
|
-
|
n.a.
|
Treasury shares
|
(2.6)
|
-
|
n.a.
|
Net cash generated (used in) from financing activities
|
2,471.0
|
(53.9)
|
n.a.
|
|
|
|
|
Exchange gain (loss) on cash and cash equivalents
|
(65.6)
|
(31.4)
|
109.1%
|
|
|
|
|
Net increase in cash and cash equivalents
|
2,063.6
|
1,037.1
|
99.0%
|
|
|
|
|
Cash and cash equivalents at the beginning of the period
|
2,275.4
|
529.2
|
329.9%
|
Cash and cash equivalents at the end of the period
|
4,339.1
|
1,566.4
|
177.0%
|
|
Second Quarter
Results
2021
|
|
|
Glossary
Aircraft
Utilization
Average number of block hours per day per aircraft operated.
Available Seat Kilometers (ASK)
Number of aircraft seats multiplied
by the number of kilometers flown.
Completion Factor
Percentage of
accomplished flights.
Cost per ASK (CASK)
Operating expenses divided by available seat kilometers.
Cost per ASK ex-fuel (CASK ex-fuel)
Operating expenses
divided by available seat kilometers excluding fuel expenses.
EBITDA
Earnings before interest, taxes, depreciation,
and amortization.
Load Factor
Number of passengers as a percentage
of number of seats flown (calculated by dividing RPK by ASK).
Revenue Passenger Kilometers (RPK)
One-fare paying passenger transported
one kilometer. RPK is calculated by multiplying the number of revenue passengers by the number of kilometers flown.
Passenger Revenue per Available
Seat Kilometer (PRASK)
Passenger revenue divided by available
seat kilometers (also equal to load factor multiplied by yield).
Revenue per ASK (RASK)
Operating revenue divided by available seat kilometers.
Stage Length
The average number of kilometers flown per flight.
Trip Cost
Average cost of each flight calculated by dividing total operating expenses by total number of departures.
Yield
Average amount paid per passenger to
fly one kilometer. Usually, yield is calculated as average revenue per revenue passenger kilometer, or cents per RPK.
|
Second Quarter
Results
2021
|
|
|
This press release includes estimates
and forward-looking statements within the meaning of the U.S. federal securities laws. These estimates and forward-looking statements
are based mainly on our current expectations and estimates of future events and trends that affect or may affect our business, financial
condition, results of operations, cash flow, liquidity, prospects and the trading price of our preferred shares, including in the form
of ADSs. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject
to many significant risks, uncertainties and assumptions and are made in light of information currently available to us. In addition,
in this release, the words “may,” “will,” “estimate,” “anticipate,” “intend,”
“expect,” “should” and similar words are intended to identify forward-looking statements. You should not place
undue reliance on such statements, which speak only as of the date they were made. Azul is not under the obligation to update publicly
or to revise any forward-looking statements after we distribute this press release because of new information, future events or other
factors. Our independent public auditors have neither examined nor compiled the forward-looking statements and, accordingly, do not provide
any assurance with respect to such statements. In light of the risks and uncertainties described above, the future events and circumstances
discussed in this release might not occur and are not guarantees of future performance. Because of these uncertainties, you should not
make any investment decision based upon these estimates and forward-looking statements.
In this press release, we present EBITDA,
which is a non-IFRS performance measure and is not a financial performance measure determined in accordance with IFRS and should not be
considered in isolation or as alternatives to operating income or net income or loss, or as indications of operating performance, or as
alternatives to operating cash flows, or as indicators of liquidity, or as the basis for the distribution of dividends. Accordingly, you
are cautioned not to place undue reliance on this information.
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.
Date: August 12, 2021
Azul S.A.
By: /s/ Alexandre Wagner Malfitani
Name: Alexandre Wagner Malfitani
Title: Chief Financial Officer
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