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First Quarter 2008 Results Presentation April 30, 2008

First Quarter 2008 Results Presentation April 30, 2008.

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First Quarter 2008 Results Presentation April 30, 2008

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  1. First Quarter 2008 Results Presentation April 30, 2008

  2. This presentation may include forward-looking comments regarding the Company’s business outlook and anticipated financial and operating results. These expectations are highly dependent on the economy, the airline industry, commodity prices, international markets and external events. Therefore, they are subject to change and we undertake no obligation to publicly update or revise any forward looking statements to reflect events or circumstances that may arise after the date of this presentation. More information on the risk factors that could affect our results are contained on our Form 20-F for the year ended December 31, 2006. Information, tables and logos contained in this presentation may not be used without consent from LAN

  3. Contents I. 1Q08 Financial Results • Key Developments & Future Outlook

  4. 1Q08 Highlights • LAN achieved a strong operating performance as a 29.7% increase in revenues outpaced a 9.0% growth in system capacity. • Despite high fuel prices, LAN reported a 5.8% increase in net income and a 11.5% operating margin. Once again, LAN demonstrated the resiliency of its business model and its ability to operate in a high fuel price environment. US$ millions1Q07 1Q08 % Chg Revenues 831 1.078 29.7% Passenger 537 693 29.0% Cargo 255 338 32.4% Other 39 47 20.9% Total Operating Expenses (708) (954) 34.7% Operating Income 124 124 0.6% Operating Margin 14.9% 11.5% -3.3 pp Net Income 86 91 5.8% EBITDAR* 198 207 4.3% EBITDAR Margin 23.8% 19.2% -4.7 pp * EBITDAR = Operating income + depreciation & amortization + aircraft rentals (does not include fuel hedging gains/losses)

  5. 1Q08 - EBITDAR Margin Affected by High Fuel Prices 0,8% 35% 30% 10,7% 10,0% 25% 4,7pts. 4,8% 20% 15% 23,8% 10% 19,2% 5% 0 1Q2007 Yield Load Factor Fuel Price Others 1Q2008 +4.3% 198 207 EBITDAR [MMUS$] +9.0% 1,727 1,882 System ATK [mill.] EBITDAR Margin = Operating income + depreciation & amortization + aircraft rentals / Revenues

  6. Passenger BusinessRevenue growth driven by a 15.1% growth in traffic and an 12.0% increase in yields +29,0% 693 537 1Q2007 Capacity Yield Load Factor 1Q2008 +12.0% 7,761 8,695 ASK [mill.] +15.1% 6.9 7.9 Passenger RASK [US$c]

  7. Cargo BusinessGrowth driven by a 13.4% capacity expansion and a 20.0% increase in yields +32,4% 338 255 1Q2007 Capacity Yield Load Factor 1Q2008 +13,4% 864 979 ATK [mill.] +16,8% 29,6 34,5 Cargo RATK [US$c]

  8. 1Q08 - Cost Analysis MAIN IMPACTS Increase in headcount, FX and inflation 53% increase in fuel prices 1.3 pt reduction in average commissions 12 new owned aircraft Increased operations & ACMI leases More passengers & higher compensations One additional leased Airbus A430 Larger fleet, higher utilization, and escalation in maintenance contracts Higher sales & distribution and marketing expenses

  9. Contents I. 1Q08 Financial Results • Key Developments & Future Outlook

  10. Increased Fuel Prices during 1Q08 Fuel & Jet Fuel (2007 – 2008) Average 1Q07 JET: US$ 1.75 /g WTI: US$ 58.1 /b Average 1Q08 JET: US$ 2.82 /g (+61%) WTI: US$ 97.9 /b (+69%) Source: Bloomberg

  11. Fuel Strategy: Fuel Cost Pass-Through Mechanism • Change in passenger fuel pass-through table in December 2007 Domestic Chile WTI US$ Fuel Surcharge (Ch$) International Fuel Surcharge < 40 0 40 – 50 0 50 – 60 2,500 60 – 70 5,000 70 – 80 7,500 80 – 90 10,000 90 – 100 12,500 100 – 110 15,000 110 – 120 17,500 Note: Fuel surcharges are per segment (ie.one way). • Fuel pass-through in cargo businesses • International US$ 1.30 / Kg. • From Europe Euro 0.95 / Kg.

  12. Fuel Strategy: Fuel Hedging Fuel Hedging Program 2008 (*) (*) Hedging as of April 30, 2008

  13. 4% Diversified Business Model and Capacity Allocation Diversified Business Model (% Operating Revenues) Diversified Passenger Capacity (% ASKs) Others Dom. Argentina Dom. Perú 5% 5% 6% Internacional (Long Haul) Dom. Chile Cargo 31% 50% 64% Passenger 24% Regional 1Q08 vs. 1Q07 - Capacity Growth by Region • International (Long Haul) +12% • Regional + 4% • Chile domestic +11% • Peru domestic +20% • Argentina domestic +57% • Total ASK Growth +12%

  14. Fleet Plan: LAN Maintains the Flexibility to Adjust its Fleet Size -24% -31% -36%

  15. Planes Seats Hours 2008 Estimated Capacity Expansion Passenger ASK Growth Cargo ATK Growth 19.5% 16-18% 8-10% 7.0% 11.5% 6.9%

  16. Fleet Plan 139 + 67% FREIGHTERS 83 1 2 2 4 4 1 Actualizar? PASSENGER AIRCRAFT CAPEX ’07-’16 (USD MM) 471 839 364 249 496 3.500 US$5.6 Billion 2008-2016

  17. First Quarter 2008 Results Presentation April 30, 2008

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