LATAM Airlines Group SA Q1 FY2025 earnings call

• Kicked off 2025 with strong momentum, transporting over 21 million passengers and expanding capacity by 7.3%. - Delivered record profitability with net income of $355 million (up 38% year-over-year) and adjusted EBITDAR nearly $1 billion. - Customer satisfaction reached record levels: NPS 56, 61 among premium travelers; revenue from premium travelers up 7% year-over-year. - Fleet investments: nearly 90% of narrow-body fleet with WiFi, 100% narrow-body fleet with premium economy cabins, 61% wide-body fleet with upgraded interiors; launched new business class suites and signature check-in experiences. - Capital allocation: paid $293 million dividend, launched a $153 million share repurchase program.

LATAM Group transported over 21 million passengers in Q1 2025, with capacity expanding 7.3% year-over-year. Total revenues reached $3.4 billion, up 2.7% year-over-year. Passenger revenues increased 1.6% and cargo revenues grew nearly 10%. Adjusted EBITDAR was nearly $1 billion, a record, with an adjusted EBITDAR margin of 28.2%. In Brazil, domestic RASK increased 3.9% in local currency despite a dollar-term decrease. Spanish-speaking countries saw an 11% RASK increase in local currency.

• Adjusted operating margin revised to 13%-15% (previously 12%-13.5%). - Adjusted EBITDAR forecasted between $3.4 billion and $3.75 billion (previously $3.25 billion to $3.6 billion). - Levered free cash flow expected above $1.2 billion (previously above $1 billion). - Liquidity expected to close the year at $4.1 billion (previously $3.9 billion). - Adjusted leverage forecasted below 1.5x (previously below 1.7x).

• Macro factors: fuel price volatility, geopolitical uncertainty, foreign exchange fluctuations, potential disruptions in cross-border traffic; these could impact passenger and cargo demand.

Q: Congrats on solid results. How is LATAM viewing the global GDP revision impact?

A: Bookings and cargo revenues not yet impacted; LATAM has relative advantage and targets growth where it can win.

Q: Follow-up on guidance, how much surprised by 4Q numbers?

A: Good bookings visibility, premium traffic share increasing, confident in trends but vigilant.

Q: Cost print, reversal of redelivery provisions, FX benefits?

A: Reversal not sustainable, focus on continued cost savings; FX impact on expenses, fuel price $90/bbl assumed.

Q: Yields in international, growth from Brazil?

A: International yields stable, domestic Brazil demand stable, focus on enhancing product where strong.

Q: U.S. carriers pulling out capacity, impact?

A: Southern Cone less exposed, impact minor; transatlantic demand stable.

Q: Capacity/fleet flexibility, M&A in Brazil?

A: Can adjust with low-cost capital assets; no speculation on Gol-Azul M&A yet.