Revenue increased, but the loss deepened by

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© Reuters.

| By Polly Tal, Israel

El Al Airlines (TASE 🙂 is announcing the results of the year today, as it is still deeply immersed in the limits of the corona following the eruption of the Delta strain. Despite this, the company reports a recovery and increase in revenue and volume of activity. At the same time, the bottom line that El Al presents is still a loss, and this quarter the loss deepened to $ 136 million, compared to a loss of $ 81 million in the previous quarter.

El Al shares are responding to today’s reports with a slight decline of 0.3%, after falling by about 37% since the beginning of the year. The company is currently traded at a market value of about NIS 560 million.

The company’s revenues indicate a consistent increase, this is the fourth consecutive quarter and amounted to $ 253 million this quarter, an increase of 14% compared to operating revenues in the previous quarter. In addition, EL AL is proud of a 13.2% reduction in the gross loss to $ 17.1 million, compared to the previous quarter and a reduction of about 72% compared to the gross loss in the corresponding quarter.

The company maintained positive EBITDAR, for the third consecutive quarter, of $ 3 million, compared to about $ 20 million in the previous quarter, in view of the significant traffic restrictions following the spread of the Delta strain.

At the end of August 2021, the government approved the relief plan, mainly with regard to the departure of Israelis abroad. Amounting to $ 184.3 million.

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In October this year, the government also approved easing of the entry of tourists into Israel, which will affect the continuation of the company’s demand trend.

El Al notes that sales in the fourth quarter will be high relative to third quarter sales, and will reflect the gradual recovery and return trend to the company’s operations. It also expects continued positive momentum in the industry and the company’s operations throughout 2022.

Cash flow in the third quarter was negative and stood at about $ 86 million compared to a negative cash flow of about $ 34 million in the third quarter of 2020. The cash flow last year was affected by a positive cash flow of about $ 66 million thanks to the release of surplus funds in the company’s major compensation funds.

In the nine months ended September 30, there was a sharp increase in jet fuel prices compared to the same period in 2020, a 60% increase in the price of a barrel of crude oil and a 64% increase in the price of DSL. And 87% in the DSL price, compared to prices in the third quarter of 2020.

The fall in the dollar exchange rate also had an effect on the company’s balance sheet balances, denominated in shekels.

Avigal Sorek, CEO of EL AL:

“The results of the third quarter, amid the Delta strain storm, reflect our ability to operate flexibly and efficiently and respond quickly to market conditions. Although we operate in a business environment with limited visibility we are committed to looking further and developing significant growth engines, while constantly strengthening our capital structure.”

The company is currently working to expand its funding sources. Among other things, it will receive state assistance of up to $ 103 million, most of which will be donated by the controlling shareholder, Kenny Rosenberg. An additional $ 20 million is expected to be poured into the company by the state as a down payment for its participation in defense spending.

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