TAP recorded losses of 395 million euros in the first three months of the year. Pandemic worsened the losses compared to the same period last year.
TAP recorded losses of 395 million euros in the first quarter of the year, related to the impacts of the Covid-19 pandemic, the Portuguese airline announced to the market
In the statement sent to the Securities Market Commission (CMVM) on Monday evening, the airline states that in the same period of 2019 the net negative result was 106.6 million euros.
“[The] negative net result of the quarter of 395 million euros [was] impacted by events related to the Covid-19 pandemic, namely the recognition of ‘jet fuel overhedge’ of 150.3 million euros, and the net result was also impacted by negative net exchange rate differences of 100.5 million euros”.
The airline explains that ‘excluding these two effects, the net result for the first quarter of 2020 would have been negative by 169.9 million euros’.
The statement also reveals that TAP registered a 54.7% decrease in the number of passengers carried in March compared to the same month of 2019.
In the first quarter of the year, the airline recorded a “decrease in total operating revenues by 05%” compared to the same quarter of 2019 and “of ticket revenues by 3.7%” compared to the same period of the previous year.
In March, the decrease in relation to the same month in 2019 was 106.3 million euros (-47.7%) in total operating income and 90.3 million euros (-46.9%) in ticket revenues.
TAP also recorded a decrease in EBITDA (earnings before interest, taxes, depreciation and amortization) of 26 million euros in the first quarter compared to the same period of the previous year.
In March, the fall in EBITDA was 80.4 million euros compared to the same month last year.
“[The] decrease in activity in March 2020 as a result of the Covid-19 pandemic had a negative impact on TAP’s performance in the first quarter, offsetting the good performance seen in the first two months of the year,” the company maintains.
The company adds that “March was already significantly affected by the containment measures adopted by national and international authorities, which were reflected in a sharp drop in demand and led TAP to reduce its operating capacity, translating into a progressive deterioration of activity throughout the month”.
TAP also highlights the repayment in February of “an amount of 158.6 million euros relating to financing with a syndicate of Portuguese banks, with an extension of the maturity of the remaining amount of this financing”.
“The average maturity of TAP’s financial debt (excluding operating leasings) increased from 4.5 years at the end of 2019 to 5.0 years at the end of the first quarter of 2020, continuing the significant strengthening of the extension of the average maturity of debt made during 2019, bearing in mind that at the end of 2018 it was 2.5 years”.
On June 10, the European Commission approved “Portuguese rescue aid” to the airline, a state support of 1.2 billion euros to meet “immediate liquidity needs” with predetermined conditions for repayment.