๐Ÿ‡ฎ๐Ÿ‡ธ Arion Bank Capital Markets – Securities Sales

January 31, 2024

This week marks the beginning of the Q4 2023 earnings season with ICEAIR posting its results on Thursday, February 1, followed by an investor presentation on Friday morning.

Main news in the quarter were surrounding the seismic activity in the Reykjanes peninsula. Because of it, management detached the guidance for the year on November 21 but still expected to deliver positive earnings in the year.

A successful capital markets day was held on November 22 where they laid down their plan for the future, committing on A321 LR/XLR long range aircraft from Airbus. The airline also laid down a plan for their 100 year anniversary in 2037 of having 70-100 aircraft and 75-90 destinations up from 39 aircraft and 52 destinations currently.

Air traffic controllers had a strike in December which was abruptly stopped following an eruption in the Reykjanes peninsula. Air traffic controllers signed their collective bargaining agreement yesterday.



Passenger numbers were strong in the quarter, considering the challenges that were faced because of the eruption on the Reykjanes peninsula. Passenger numbers beat the corresponding quarter in 2019 for the first time and by 4.7%. Passengers were also 12% more in Q4 2024 than Q4 2022. Load factor was also strong in the quarter or 76.8% compared to 75.9% Q4 2022 and 82.0% in Q4 2019.












ICEAIR stock price is sitting at ISK 1.48 or around 6% higher than before Q3 2023 results. The stock fell in November when there was seismic activity on the Reykjanes peninsula, but has steadily risen since then. Easyjet and Norwegian are the only positive return stocks of the five below in the last twelve months.








Given the strong traffic data but difficult circumstances in the quarter, we expect a negative EBIT of 21.6m USD in the quarter and 50m USD EBIT for full year 2023. We brought the full year estimate down slightly because of the negative profit warning in November. There were some positive external developments in the quarter like jet fuel prices coming down and passenger numbers better than expected given the seismic activity and strike, bringing our estimate less down than otherwise.





Originally published on 30 January by Arion banki.

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