Aegean Airlines: FY23 Results: Strong performance (Σύσταση Αγορά και Τιμή στόχος 14,70 ευρώ)

Aegean Airlines || BUY | CP EUR 12.66 | TP EUR 14.70

FY23 Results: Strong performance driven by increased passenger traffic and better load factors, EBITDA profitability slightly above estimates. Aegean to distribute a dividend of EUR 0.75/share, above our estimate. Positive outlook for 2024 ASKs growth.

Facts: Aegean Airlines released a strong set of 2023 results, with group revenue up by 26.7% YoY to EUR 1,693.1m vs EUR 1,336.8m in FY22,

• EBITDA advanced by 45.6% to EUR 400.4m (beating our call),

while net profit came at EUR 168.7m (above our estimate of EUR 167.6m) and up by 58% from EUR 106.8m a year ago.

• Passenger traffic shaped at 15.7m (+26% y-o-y), while load the load factor came in at 83.4% (vs. 79.8% as of 2022). Cash & Cash equivalents recorded a 34.4% y-o-y increase and stood at EUR 709.3m vs. EUR 527.8m in FY22, while net debt including leases stood at EUR 412.2m vs. EUR 477.6m in FY22 down by 13.7% y-o-y.

Free cash flow reached EUR 181.4m in FY23 vs. EUR 53.5 in FY22 posting a significant y-o-y increase.  In 4Q23 terms, Aegean Airlines recorded sales of EUR 361.4m (up by c. 14% y-o-y) and up by 3% vs. our estimate, EBITDA of EUR 33m down by 16% y-o-y (and below our forecast by 32.1%) and Net Profit of EUR -2m (-115% y-o-y) and down by c. 35% vs. our estimate.

Source: the Company, Optima bank research

Key statistics: Aegean Airlines increased its seats available per kilometer (ASKs) in FY23 by 22% to 20.4m, on high tourism demand and increased flight schedule. Total passengers reached 15.7m from 12.5m in FY22 posting a YoY increase of c. 22%, with international passengers accounting for c. 60% of total passengers curried from 58.9% last year.

• Load factor increased to 83.4% from 82.7% aided by high tourism demand for Greece and positively affecting profitability. On the cost side, management continues to keep the company’s costs low and announced Cost per ASK – ex. fuel at EUR 5.5 cents in FY23 vs. EUR 5.4 cents in FY22.

Source: the Company, Optima bank research

Outlook: Management highlighted the positive outlook of the company and the impressive results of the year. In more detail, in 2023 Aegean Airline added 30 new destinations in its network, increased the order of the new Neos by 4 aircraft reaching a total order of 50, initiated operation of the flight simulator training center, and the new MRO base will start its operation within the first four months of 2024.

• In 2024 the Group plans to expand its operations mainly from its Athens base, adding more frequencies in existing routes mainly to the United Kingdom, Germany, Croatia, Italy, Spain, and UA Emirates, adding 7% more seats compared to 2023 and above the initial guidance for 2% – 4% increase in seats available. The group’s target is to offer 19.5m seats serving 249 routes in total from its 7 main bases.

Dividend: With the support of increased profitability and another high record year expected ahead, management declared a EUR 0.75/share 2023 dividend (DY: 5.9%, ex-date 20 May), above our estimate of EUR 0.46/share.

Conference call: Tomorrow at 16.00 local time, Tel nos: Greek participants: +30 211 180 2000 or +30 210 94 60 800, UK participants: +44 (0) 800 368 1063, International: +44 (0) 203 059 5872, USA participants: +1 516 447 5632. 

Aegean Financial Calendar 2024 update

The AGM will take place on Tuesday 30 April instead of 17 April and the stock will trade ex-dividend on Monday 20 May instead of 22 April with the dividend payment set for Monday 27 May.  

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