Renta 4 │ IAG results for Q219 exceeded expectations. It has maintained its guidance for 2019 and downgraded its expectations for oil prices. Positive impact on share price.
The Q219 results which exceeded our forecasts for income (+4% vs R4) and EBIT before extraordinary costs (principal operational magnitude): +4% vs R4 and +5% vs the consensus. Net profits were 736 Mn€ (vs 648 Mn€ R4 and vs 633 Mn€ for the consensus).
In unitary terms, income per passenger +1.1% (vs R4 +0.6%), total income +1.7% (vs R4 +0.1%), total costs +1.9% (R4 +0.6%) and non-fuel costs +0.4% (R4 -3.8%).
They have downgraded their forecasts for fuel costs in 2019 by -100 Mn€ to 6.1 Bn€, after having upgraded them by the same amount in Q119 (R4 6.2 Bn€).
Net debt, adjusted for rents, reduced considerably (-448 Mn€) compared with Q119. R4´s estimate for the net debt/EBITDA multiple for 2019 is 0.9X (1.0X in Q119 and 1.2X in Q418), conservative levels which allow the management high levels of flexibility.
In terms of capacity growth (air traffic supply) for 2019, they have again reduced their forecast by -5% to +5.0% vs 2018, in line with our forecast of +5.1%.
They maintain their 2019 guidance for EBIT before extraordinary expenditures unchanged (at current fuel prices and constant exchange rates), so that they forecast a similar pro forma level as in 2018 (which includes the impact of IFRA 16). They revise their forecasts of unitary incomes and costs. They now forecast that income will remain flat (before they dicsiunted improvements) and that costs will improve (before flat).