GOL Posts Encouraging Results

GOL Linhas Aereas Inteligentes S.A. (GOL - Analyst Report) has announced encouraging results for the third quarter of 2009. The company posted net income of R$77.9 million, with a net margin of 5.2%, versus a net income of R$353.7 million in the previous quarter and a net loss of R$510.7 million in the same period of 2008. 

Reflecting the optimization of its cost structure and the focus on more profitable markets, GOL's operating results were positive for the fifth consecutive quarter, totaling R$99.1 million, with an operating margin of 6.6%. 

The EBITDAR was R$298.7 million with a margin of 20.0% versus R$258.8 million in the previous quarter (18.6%) and R$253.7 million (14.2%) in the same quarter of previous year. 

During the quarter, GOL announced a global share offering designed to strengthen its financial position and reclaim its status among the most competitive airlines in the world, with a cash position of more than 20% of net revenue. The offering was successfully concluded on Oct 19, having raised R$627.1 million from the issue of 38.0 million shares at R$16.50 per share. In addition, a further 5.2 million preferred shares were sold at the same price through an over-allotment option. As a result, GOL's free float increased from 44.5% of preferred stock to 70.5% and from 22.2% of total capital to 35.3%. 

GOL remains well positioned to capitalize on the growth of discount air travel in Brazil and the rest of Latin America, given its strong market position and efficient operations. Favorable trends in fuel prices and exchange rates are also benefiting the company's outlook. 

Although competitive pressures and the impact of the global financial crisis are a source of concern, GOL's position is strong. We expect the company to experience growth in the short-to-medium term given its continued investment in fleet renovation and international agreements.

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