Brazilian airport operator
Adjusted net income excludes the reversal of tariff for
Net income was R$2.00 or US$1.14 per EPADS compared with R$1.5 or US$0.80 per EPADS in the corresponding period of 2009 and US$0.45 as anticipated by the Zacks Consensus Estimate.
During the quarter, adjusted net revenues were R$2,898.9 million (US$1,647.1 million), up from R$2,381.2 million (US$1,266.6 million) in the third quarter of 2009, primarily due to increases of 20.2% and 16.0% in passenger and cargo revenues driven by higher market demand.
Passenger revenues and the overall cargo revenues reached R$2,369.0 million (US$1,346.0 million) and R$276.2 million (US$146.9.0 million), respectively, based on the global economic recovery.
Total cost of service and operating expenses grew 12.4% year over year; based on revenues, it fell by 880 basis points due to cost optimization. EBITDAR (excluding aircraft rent) for the quarter was R$570.4 million (US$324.1 million) with a margin of 19.4% compared with R$347.9 million (US$185.1 million) with a margin of 14.6% in the corresponding quarter of 2009.
Net debt at the end of the quarter increased to $7,498.6 million (US$4,385.1 million) from R$6,762.3 million (US$3,756.8 million) at the end of the previous quarter. During the quarter, cash from operating activities remained stagnant at R$434.1 million (US$253.9 million) compared with the third quarter of 2009.
During the quarter,
On combination, LATAM will become a strong competitor in the domestic market with total expected synergies of US$400 million. However, we are concerned about the global airline industry, which is not expected to show any significant recovery in 2010. The huge volatility in oil prices also forces us to reiterate our Neutral recommendation on the ADS. The ADS currently retains its Zacks #3 Rank (short term “Hold” rating).
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