Record 3Q23 results for IAG, revenues of €8,646m, comfortably beating 2022 (+18%) and 2019 (+22%) figures


Intermoney : Better than expected results at all levels. Well ahead of 2022 and 2019 data. Capacity reaches 95.6% of that achieved in 2019, but higher tariffs allow improvement on pre-pandemic results: Revenues of €8,646m, +18% vs 3Q22 and +19% vs 3Q19. Above our estimates (€8,351m) and below consensus (€8,832m).

EBIT of €1,745m, +45% vs. 3Q22 and +22% vs. 3Q19, reaching its historical record in a 3Q. Above both our estimates (€1,388m) and the consensus (€1,578m).
Net debt stands at €8,000m (1.4x EBITDA) vs €11,100m in 3Q22. OUTLOOK 2023: Improved guidance

Expect to operate above 2019 levels in Q4 and by 2023 with capacity at around 97% of 2019 levels.

Around 75% of Q4 passenger revenues are already booked.

Expect fuel costs of around €7.6bn. Net debt to rise in Q4 due to seasonal effect.
Assessment: Record results, again well above all estimates. It demonstrates the strength of the sector and the ability to maintain demand despite the sharp rise in tariffs, as well as presenting a good outlook for 4Q23. We believe that at current prices it is an attractive opportunity. IAG trades at 2.9x EV/EBITDA and 4.5x PER. We maintain our Buy recommendation and P.O of €2.2.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.