Gol Linhas Aereas Inteligentes SA GOL has strengthened its liquidity position, preserving cash reserves of more than 12 months.
As of May 31, 2020, the company had approximately R$3.5 billion in total liquidity, indicating more than 12 months of cash on hand (excluding refunds and restricted cash). As of April, it had more than 10 months of cash-on-hand. The increased liquidity can be attributed to greater cost cuts and improving passenger demand.
Gol Linhas’ gross cash operating costs were R$8 million/day in May. In June, costs are expected to remain at the same level, excluding revenue, ATL refunds and non-aircraft debt payments. Meanwhile, the carrier had a net cash burn of R$2 million/day last month, including sales and receivables of approximately R$8 million/day. Based on some assumptions, the company expects a net cash burn of R$4 million/day during the June-December period.
Gol Linhas Aereas Inteligentes S.A. Price
Gol Linhas Aereas Inteligentes S.A. price | Gol Linhas Aereas Inteligentes S.A. Quote
With easing travel restrictions, Gol Linhas’ May ticket sales increased from April by more than 100% in all its channels. Moreover, increasing capacity in the last week of May helped the carrier generate 22% higher passenger revenues from that in April.
Per Gol Linhas’ vice president of sales and marketing, “GOL's sales have increased by more than 20% every seven days for the last three weeks, and we are ramping-up our July network to offer Clients more travel options.”
During May, the airline’s initial capacity was only 7% of the network in the comparable prior-year month. Toward the end of the month, capacity was increased to 10% with a few flights being resumed. With the re-opening of some bases and operation of additional flights, June’s capacity is expected to be around 20% of the year-ago period’s schedule.
Zacks Rank & Other Key Picks
Gol Linhas carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Transportation sector are Scorpio Tankers Inc. STNG, Teekay Tankers Ltd. TNK and Frontline Ltd FRO. While Frontline sports a Zacks Rank #1 (Strong Buy), Scorpio Tankers and Teekay Tankers carry the same Zacks Rank as Gol Linhas. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Scorpio Tankers’ current-year earnings has been revised upward in excess of 100% in the past 60 days.
The Zacks Consensus Estimate for Teekay Tanker’s current-year earnings has been revised 35.6% upward in the past 60 days.
The Zacks Consensus Estimate for Frontline’s current-year earnings has been revised 17.1% upward in the past 60 days.
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