SANTIAGO (Reuters) -LATAM Airlines expects “record” net earnings in 2023 after posting stronger second-quarter results and improved forecasts, company executives said on Wednesday, hoping to bolster investor confidence after the company’s exit from bankruptcy in November.
Speaking at a news conference, the Santiago-based airline’s chief financial officer, Ramiro Alfonsin, said the company had enjoyed a strong first half of the year.
“Without a doubt we are foreseeing a much better financial situation and very good profitability in 2023,” he told reporters.
The company on Wednesday also raised its 2023 forecasts for adjusted earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) to between $2.35 billion and $2.50 billion from $2 billion-$2.2 billion
It also raised its revenue forecasts for the year to between $11.3 billion and $11.6 billion, from $11 billion-$11.5 billion, according to its quarterly report filing.
Alfonsin added that the company was expecting to hit pre-pandemic level results for the year and record EBITDAR.
LATAM Airlines, South America’s largest airline, operates units across the continent, with routes across the world.
The airline, created out of the 2012 merger of Chilean airline LAN with Brazilian carrier TAM, was hit hard by the pause in travel demand caused by the coronavirus pandemic in 2020, leading it to declare bankruptcy later that year.
It came out of bankruptcy protection last November with an $8 billion reorganization plan.
The company posted earlier on Wednesday a second-quarter net profit of $145.25 million, reversing the year-ago loss on increased revenues of $2.63 billion.
The appreciation of the Brazilian real meanwhile gave the company a $26 million boost in revenues, it said in a filing to Chile’s stock market.
The company’s operating result stood at $228.5 million in the quarter, “driven by good performance in the passenger business” and improved fuel costs, with operating costs coming in at $2.45 billion.
The U.S. Department of Transportation fined the airline for $1 million in May after saying it failed to provide timely refunds to passengers for U.S. flights.
Available seat kilometers (ASKs), a measure of passenger-carrying capacity, are forecast to grow 20%-22% this year versus 2022.
(Reporting by Fabian Cambero and Gabriel Araujo in Sao Paulo ; Writing by Isabel Woodford; Editing by Valentine Hilaire and Gerry Doyle)
