Azul SA (B3: NYSE:AZUL4, NYSE: AZUL), the largest airline in Brazil by number of flights and cities served, announced Monday that its Board of Directors has approved the appointment of Grant Thornton Brasil as its independent auditor for the fiscal year ending December 31, 2024. This decision precedes the mandatory auditor rotation required by CVM Instruction 308/99.
The appointment of Grant Thornton is the outcome of a competitive process based on technical and commercial factors, where the firm presented the best proposal. Azul's previous auditor, Ernst & Young Auditores Independentes, has been informed and is aware of the change.
This transition will take effect from the second quarter of 2024, as Grant Thornton will commence its services with the review of the quarterly information (ITRs). The company has not disclosed any disagreements or issues with Ernst & Young that would have led to the change, indicating a standard rotation process.
Azul, recognized for its punctuality and service, operates approximately 1,000 daily flights to over 160 destinations with a fleet of over 180 aircraft and more than 16,000 crew members. In recent years, it has garnered significant industry accolades, including being named the most on-time airline by Cirium and receiving the top ranking in TripAdvisor (NASDAQ:TRIP)'s Traveler’s Choice Awards.
This corporate update is based on a press release statement filed with the SEC.
In other recent news, Brazilian airline Azul reported a promising start to the year in its first-quarter earnings call, noting a 4.5% increase in operating revenue and a significant 37.4% increase in EBITDA. The company achieved a record EBITDA margin of 30.3% and projects improved cash flow and reduced leverage for 2024.
In other developments, Azul and another local airline, Gol, have entered into a codeshare agreement, which allows the airlines to sell seats on each other's flights and includes their frequent flyer programs. This partnership has sparked discussions about a potential merger, which would require antitrust approval.
Meanwhile, Airbus, a major aircraft supplier for Azul and Gol, maintains a global production capacity of 60 to 65 aircraft per month, with plans to increase this to 75 planes per month by late 2025 or early 2026. Despite market challenges in Brazil, such as judicial uncertainty and high fuel prices, Airbus continues to receive orders from the country's airlines.
Azul and LATAM, another local airline, have placed orders for over 100 aircraft for the coming years. However, Airbus' executive in Brazil, Gilberto Peralta, voiced concerns about the recent quality crisis at Boeing (NYSE:BA), which has led to delivery delays and market instability.
These are the recent developments in the aviation industry.
InvestingPro Insights
As Azul SA navigates through its corporate governance and operational enhancements, real-time data from InvestingPro provides a snapshot into the company's financial health and market performance. With a market capitalization of $582.38 million and a challenging P/E ratio currently at -1.14, Azul's financial metrics reflect the competitive and volatile nature of the airline industry. Notably, the company's revenue has grown by 8.83% over the last twelve months as of Q1 2024, indicating a resilient demand for its services despite broader industry headwinds.
InvestingPro Tips suggest that Azul's valuation implies a strong free cash flow yield, positioning it as a prominent player in the Passenger Airlines industry. However, analysts are not expecting the company to be profitable this year, and the stock price has experienced significant volatility, with a 6-month price total return of -33.94%. Additionally, there are concerns as short-term obligations exceed liquid assets, which could impact financial flexibility.
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