Pegasus reports better-than-expected Q4 profit

Pegasus made a net profit of 254 million euros in the 4th quarter of 2022, above market expectations. BLOOMBERG HT- RESEARCH Pegasus announced that it made a net profit of 254 million euros in the 4th quarter of 2022, above expectations. The company announced its last quarter profit in TL terms as 4.15 billion TL, above 3.1 billion TL. In foreign exchange terms, the company made a net profit of 254 million euros in the 4th quarter of the year, while it had a loss of 40 million euros in the 4th quarter of 2019. Thus, the company, which made a loss of 150 million euros in 2021, closed 2022 with a net profit of 431 million. Pegasus made a net profit of 212 million euros in the entire year of 2019, the pre-pandemic period. The 84 million euro exchange rate difference income (non-cash) recorded due to the upward trend of the Euro/Dollar parity supported the net profit. The company's net interest expense in the fourth quarter of 2022 was 22 million euros. While total costs increased by 70 percent in the last quarter on an annual basis, high fuel prices were the most fundamental development that increased total costs. The 34.1 percent EBITDA margin recorded in 2022 stood out as the highest realization in the sector globally. In line with the ongoing strategic positioning, international seat supply exceeded 23 percent in the last quarter of 2019 and constituted 61 percent of total seat supply. The 21 percent increase in the number of guests in the last quarter on an annual basis, the more than doubling of scheduled unit passenger revenue and the 54 percent increase in ancillary revenue per guest played a role in the 127 percent increase in sales revenues. When compared with the fourth quarter of 2019, the number of guests was 7 percent behind in the fourth quarter of 2022, while sales revenues were 7 percent ahead. Pegasus welcomed 4.3 million passengers on international routes in Q4 The strong travel demand seen in the summer season continued in Q4 2022, despite initial concerns among industry participants due to global macroeconomic conditions. Pegasus outperformed the total market in 2022 international guest numbers with a 9 percent increase compared to 2019. On the Pegasus front, 2.7 million passengers were hosted on domestic routes and 4.3 million passengers on international routes in the last quarter of the year. On the other hand, the number of domestic passengers in the 4th quarter remained below the fourth quarter of 2019. On international routes, the 4th quarter figure was above 2019. Pegasus outperformed the total market in 2022 international guest numbers with a 9 percent increase compared to 2019. Pegasus' unit revenues continued to remain above pre-pandemic levels Unit revenues increased compared to 2019 in the last quarter of the year following the high summer season. The company's domestic scheduled unit revenue per guest was 558 TL, while it remained below the previous quarter's revenue of 626 TL. International scheduled unit revenue increased by 69 percent in euros this quarter compared to 2019. International scheduled unit revenue per guest was 92 euros, while this figure was 54 euros in the same period of 2019 and 51 euros in 2021. A record was broken in ancillary revenues per guest Pegasus's revenues increased by 41 percent in the last quarter of 2022 compared to the same period of 2019, reaching 675 million euros. Of the revenue, 82 million euros came from domestic scheduled revenues, 393 million euros from international scheduled revenues, and 192 million euros from ancillary revenues. International scheduled revenues this quarter were 107 percent above the 4th quarter of 2019. A new record was broken in ancillary revenues per guest in the last quarter of the year with 27.1 euros. The increase in total costs compared to 2019 was 51 percent; the high course of fuel prices and the increase in commission expenses were the main developments that increased total costs. Personnel costs also increased compared to the previous year. The company announced that 35 percent of the jet fuel usage projected for 2023 was hedged. Pegasus's positive cash position, which was 66 million euros in 2021, reached 372 million euros by the end of 2022, while a total cash generation of 306 million euros was achieved in 2022. The company also announced its expectations for the future. Pegasus stated that the ticket demand curve continues to operate in the short term, but the first signals received regarding the summer season are encouraging. It was also announced that an increase of approximately 20 percent in the capacity offered in 2023 compared to 2022 is planned. It was also stated that the fleet size will reach 102 aircraft in 2023 from 96 aircraft in 2022, and that 86 percent of the total seat capacity by the end of 2023 will be provided by new generation fuel-efficient aircraft.