Israeli airline El Al (TSE: ELAL) once again broke its records, posting a third-quarter net profit of $187 million, 3.6 times the profit of $52 million in the corresponding quarter of 2023. The result is very impressive, considering Until profits in the first two quarters of the year were also new peaks for the airline: $81 million in the first quarter and $147 million in the second quarter.
Revenues also reached new highs. In the third quarter of this year, total revenue reached $1 billion, up 20% from the previous quarter, and 47% more than the corresponding quarter last year. In the first half of 2024, El Al’s total revenues reached $1.6 billion. EBITDAR (earnings before interest, taxes, depreciation, amortization and restructuring or rental costs) more than doubled to $360 million.
El Al achieved cash flow of $320 million in the third quarter, compared to $93 million in the corresponding quarter of 2023. The result is a doubling of the company’s shareholders’ equity to $371 million, after turning to positive shareholders’ equity only in the previous quarter. The company’s net debt continued to shrink, reaching NIS 376 million at the end of the third quarter, down from NIS 1.43 billion at the end of 2023.
The very strong results of course reflect the fact that the third quarter is the summer season, as well as El Al’s huge market share at Tel Aviv’s Ben Gurion Airport, with many foreign airlines stopping flying to Israel due to the Iron Sword War. In the third quarter, El Al carried 43% of the passengers who passed through the airport (about 670,000 per month), and this trend continued in the fourth quarter, especially after the missile attack on Israel from Iran in early October.
El Al’s outstanding financial performance can also be seen in metrics such as RASK (Revenue Per Available Seat Kilometer), which rose 23% compared to the corresponding quarter, with load factor (seat occupancy) reaching 94%, up from 88%. In the corresponding quarter, revenues per passenger kilometer increased by 16% compared to the corresponding quarter of 2023 and by 2% compared to the previous quarter of 2023. 2024.
The company, of course, admits that the story is the War of the Iron Swords and El Al’s control of the skies. “The growth stems from unusually high occupancy rates and from high demand for the company’s flights due to a decrease in foreign airline flights to Israel,” the report stated.
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However, the country will not see any taxes from El Al, as carryover losses from the crisis year of 2020, when its auditors added going concern qualifications to its financial statements, still amount to hundreds of millions of dollars.
El Al also reiterates that anyone wishing to travel with it abroad should purchase tickets early, as it operates fixed discounted flights to four destinations from which connecting flights to other destinations around the world can be made: Larnaca ($200) ; Athens ($300); Vienna and Dubai ($350). He added: “Tens of thousands of tickets were offered for these destinations, and the high demand and price led to most flights being filled in advance, which means that flights to these destinations cannot be booked close to the departure time.” The company says.
El Al’s share price has risen by 220% in the past year. The airline’s market capitalization currently stands at NIS 3.4 billion (which includes a NIS 500 million share offering). The main beneficiary is of course the controlling shareholder, Kenny Rosenberg, who owns a 46.2% stake in the airline worth NIS 1.6 billion.
“El Al has been operating on an emergency basis for more than a year, with the aim of ensuring that the skies between Israel and the world remain open,” said Dina Ben Tal Janansia, CEO of El Al. “This is vital for the continuation of business and diplomacy.” “Aviation is Israel’s main lifeline, and while other foreign airlines have not yet resumed operations, the market will continue to face challenges, and passenger demand will not stabilize.”
Published by Globes, Israel Business News – en.globes.co.il – on November 20, 2024.
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