Earnings Call Transcript - LTM Q4 2025

Operator, Operator

Hello, and welcome, everyone, to the 4Q 2025 LATAM Airlines Group Earnings Conference Call. My name is Becky, and I will be your operator today. Before I turn the call over to management, I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations and as such, constitute forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans, objectives and expected performance or guidance are forward-looking statements. These statements are based on a range of assumptions that LATAM believes are reasonable, but are subject to uncertainties and risks that are discussed in detail in the published 20-F, 2026 guidance, earnings release, financial statements and related CMF and SEC filings. The company's actual results may differ significantly from those projected or suggested and any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings. If there are any members of the press on the call, please note that this call for the media is listen only. I will now hand over to your host, Ricardo Bottas, to begin. Please go ahead.

Ricardo Bottas, CFO

Hello, everyone, and good morning. Welcome to our fourth quarter 2025 conference call, and thank you all for joining us today. My name is Ricardo Bottas, and I am the CFO of LATAM Airlines Group. Here with me is Roberto Alvo, our CEO; Andres Valle, Corporate Finance Director; and Tori Creighton, Head of Investor Relations, and we will present the highlights and results for the fourth quarter and full year 2025. I will hand it over to Roberto to share his opening remarks about the quarter and year's highlights.

Roberto Alvo Milosawlewitsch, CEO

Good morning, and thank you, Ricardo. 2025 marked a year of continuous consolidation and delivery. The strong results we're presenting today are the product of a model that LATAM Group has been building over the last 6 years, anchored first in the people and the customers, focused on impeccable execution and in the design of a superior experience. All of this in the context of an ever stronger passenger cargo networks, frequent flyer program, a very strong balance sheet and cash generation, a disciplined cost delivery and a highly diversified business model, all of which make our results resilient and less subject to external factors and industry cycles. At the heart of this performance and more than 41,000 employees working at the different affiliates of the group, their daily commitment, whether at customer touch points or behind the scenes, continues to be LATAM's Group most powerful asset. The culture of passionate, engaged people translated directly into the customer experience. In 2025, the group achieved a record Net Promoter Score of 54 points, which is a 3-point increase versus 2024, the highest full year results in our history. When our people thrive, customers feel the difference. Internally, the Organizational Health Index reached 83 points, placing LATAM Group in the top decile of the global benchmark for the first time. In terms of operations, the group transported more than 87 million passengers during the year, including 23 million passengers in the fourth quarter alone. This was boosted by a capacity increase of 8.2% for the full year and 7.7% in the quarter, demonstrating the group's ability to grow efficiently while maintaining a healthy load factor of 84.4%. This ability to connect passengers to, from and within South America was enabled by the modern and efficient fleet that the group operates. In 2025, LATAM received a total of 26 aircraft, 7 of which were incorporated in the fourth quarter. This includes the first Boeing Dreamliner with GE engines and brought the total fleet to 371 aircraft as of the end of the year, a 7% increase versus 2024, enabling the group to launch 22 new routes, of which 15 were international. On the financial side, adjusted operating margin reached 16.2% for the year, while adjusted EBITDAR came at almost $4.1 billion. Net income totaled approximately $1.5 billion, resulting in earnings per ADS of $4.95, highlighting the group's ability to translate operational performance into bottom line results. This bottom line grew by 50% versus the income generated in 2024. With this, in December, LATAM was able to distribute $400 million in interim dividends aligned with its capital allocation strategy determined by the financial policy. 2025 was just not a strong year. It was a reaffirmation of LATAM's structural strengths translated into consecutive years of margin expansion in the context of high capacity growth driven by a strategy that combines a focus on people, a differentiated customer experience, an unmatched footprint, disciplined cost control, and a resilient balance sheet. This is what defines this new LATAM. This performance and design set the base for expected 2026 strong performance highlighted in our yearly guidance, of which we feel very confident at the moment despite fuel and currency volatility. I'm very proud to be here leading a group of 41,000 dedicated individuals and to highlight and discuss our performance. With that, I'll hand it over to Ricardo, who will walk us through the achievements of this fourth quarter and full year 2025.

Ricardo Bottas, CFO

Thank you, Roberto. Let's move to Slide 4. LATAM delivered a solid financial performance during the fourth quarter with improvements across all key metrics. Total revenues reached almost $4 billion, increasing 16.3% year-over-year. This growth was driven by the passenger segment, which rose 20.3%, supported by the strong demand and capacity growth. Cargo revenues declined 9.6% in the period, explained by a particularly high comparison base as the fourth quarter of 2024 had delivered an exceptionally strong performance. Despite the full year cargo revenues increased year-over-year. As a result, the group delivered an adjusted EBITDAR of $1.1 billion, representing a 30.4% increase versus 4Q 2024. Adjusted operating income came in at $661 million, up 42.7% year-over-year, and net income totaled $484 million, increasing 78.1% compared to the fourth quarter of last year. Margins also improved with adjusted operating margin standing out at 16.7%. This quarter, we saw an increase in unit cost ex-fuel with passenger CASK ex-fuel reaching $0.047. About $0.02 of this can be explained by the appreciation of the local currencies during this period, along with another $0.02 related to other nonrecurring costs in wages and benefits, which include a special one-time bonus approved in this last quarter. While quarterly unit costs were elevated, it's worth highlighting that full year passenger CASK ex-fuel came in at $0.044, fully within the updated guidance range for 2025 provided last November. Importantly, this 7.9% increase in unit cost was more than offset by an even stronger improvement in unit revenue. Passenger RASK increased by 11.7%, reflecting LATAM's ability to sustain its value proposition and capture customer preference in an environment of healthy demand. Please join me on this next Slide 5 to take a deeper dive on the drivers for revenue performance across the different affiliates and business units. Overall, the fourth quarter showcased a well-balanced dynamic between capacity deployment and demand across our network, supported by healthy load factors and targeted commercial actions. On a consolidated level, capacity grew by nearly 8%, while maintaining a solid load factor of 85%, showcasing our ability to grow efficiently. Looking at LATAM Airlines Brazil's domestic capacity, it expanded by 12% and demand kept pace with load factors increasing by 0.7 percentage points. This balance was supported by a solid passenger RASK performance with growth of 14% in U.S. dollars and 10% in local currency, highlighting the strength of LATAM's value proposition in this market together with the resilience of demand. In domestic Spanish-speaking affiliate markets, passenger RASK grew by 23% in dollars and nearly 20% in local currency, driven by a disciplined capacity allocation that resulted in an increase in the load factor to 1.7 percentage points higher than before. Turning to the International segment, capacity and passenger volumes both grew at a high single-digit pace. While the load factor declined slightly year-over-year, it remained at very healthy 85% levels. In parallel, unit revenues increased by 6%, supported by a well-diversified network, both in the regional and long-haul international operations and strong execution. Altogether, these results reflect the robustness of LATAM Group's commercial model and its ability to grow profitably. The fourth quarter confirms that the network strategies and the disciplined capacity deployment continue to deliver strong outcomes across the board. Turning now to our value proposition and customer experience on Slide 6. During 2025, LATAM Group continued advancing initiatives focused on enhancing services across key touch points with a particular emphasis on consistency, reliability and design. At the center of this improvement is our continued focus on the premium segment, where LATAM has made significant upgrades to its value proposition. During the year, we introduced a renewed business class experience, launched the signature check-in and our new signature lounge in Lima, and announced the future enhancements like the investments in Wi-Fi on wide-body fleet beginning in 2026 and the new premium comfort cabin coming in 2027, as well as the investments in the brand-new lounge in Guarulhos. As part of this ongoing focus, LATAM was once again recognized internationally. In the fourth quarter, the group received the most improved brand award globally by Design Air, a recognition that adds to early achievements such as Skytrax' Best Airline in South America, the APAC 5-star Global Airline Award and the Air Cargo Airline of the Year award by Air Cargo News, all serving as third-party endorsements that we are on the right path. The customer experience enhancement initiatives demonstrate the group's commitment to delivering a consistent and differentiated travel experience across the region and further strengthen customer preference for LATAM, and the results are validating these investment decisions. For the full year, premium revenues accounted for 23% of passenger revenues and continue to grow faster than the passenger revenues overall. While passenger revenues grew 12% year-over-year, premium revenues increased by 14%, highlighting the continued momentum of this segment, which provides LATAM with access to a customer base that is structurally more stable throughout the year, less exposed to seasonality and more resilient to potential macroeconomic headwinds. Coupled with this, the LATAM PASS program plays a critical role in accessing this segment, fostering loyalty among customers who travel more frequently and generate higher expense through the wide range of benefits the program offers. LATAM PASS is by far the largest airline loyalty program in the region with almost 54 million members, accounting for nearly 60% of LATAM's passenger revenues. This combination of a resilient customer segment and a highly effective loyalty program reinforces the sustainability of LATAM's revenue base and equips the group with the tools to continue driving profitable growth. Jump to Slide 7. You see on this slide that we are translating this into tangible results. Customer satisfaction reached record levels. Net Promoter Score rose to 54 points, as Roberto mentioned, for passenger operations, while among premium travelers it reached 58 points, the highest ever recorded by the group. This is a clear indication that our customers are recognizing and valuing the improvements. At the same time, premium revenues continue to show an upward trend, supported by growth, customers' preference and a more differentiated onboard experience, all while maintaining costs stable since 2019, confirming that LATAM can deliver a differentiated experience, all while keeping its cost base stable. Let's move to Slide 8. We have spoken a lot about structural improvements and the sustainability of the profitability stemming from the unique ecosystem of LATAM Group. Passionate people, a financial foundation, an exceptional product, premium revenues and a focus on cost containment, all of that supports a virtuous cycle that results in these numbers year after year. This year, LATAM expanded its revenues by 11.2% and its adjusted operating margin to 16.2%, reflecting the profitable growth strategy and the continued disciplined capacity execution. Over the course of the year, the group received 26 aircraft, launched 22 new routes and grew capacity by 8.2%, making the 3.5% margin expansion a clear reflection of LATAM's ability to grow strategically, not just in volume but in profitability targets. It's also a testament to the group's deep knowledge of its markets and disciplined execution over time. Adjusted EBITDAR grew by over 30% year-over-year to $4.1 billion, supported by revenue growth and efficiency across the operation, all within the guidance range. At the bottom line, net income increased significantly by 50% versus last year, further reinforcing the group ability to deliver sustainable financial results. These results are part of a broader trend, one of continuous improvements and reliable execution. LATAM enters 2026 on solid footing with a strong foundation to continue creating long-term value. Please join me on Slide 9. As you can see on this slide, LATAM's strong performance is not only reflected in earnings generation, but also in its ability to consistently translate those results into cash generation. During 2025, adjusted operating cash flow reached $3.3 billion, supported by strong operational and financial performance. This cash generation enabled the group to fully fund its core business needs, including maintenance and growth investments with $1.5 billion invested in CapEx net of financing while also covering interest payments. As we highlighted earlier, our CapEx investments have been directed towards enhancing the customer experience, but they have also been focused on accelerating LATAM's digital transformation across the business. With that, LATAM generated close to $1.4 billion in cash after covering all business-related commitments. Over the course of the year, the group executed 2 share repurchase programs totaling $585 million. Also, LATAM Group distributed $400 million in interim dividends in the fourth quarter, bringing total dividends for the year close to $605 million. Even after all of these, LATAM still delivered almost $200 million in positive cash generation in 2025, demonstrating its ability to invest in the business, meet its key obligations and also allocate capital towards additional initiatives, all while considering defined financial policy range. Let's move to Slide 10 and see how this is reflected in our balance sheet metrics. Balance sheet strength has been one of LATAM's key priorities over the past few years, and liquidity is one of the clearest expressions of that focus. The group has consistently grown its nominal liquidity, reaching $3.7 billion by the end of 2025. As we just reviewed on the previous slide, it was through the additional capital allocation initiatives carried out in 2025 that LATAM was able to bring liquidity as a percentage of the last 12 months revenues closer to the top of the policy range at 25.7%, demonstrating the flexibility the group has to allocate capital across multiple fronts while aiming at the final financial framework. At the same time, on the debt side, adjusted net leverage reached 1.5x below the last year and the maximum policy level of 2x, placing LATAM in a strong position heading into 2026 with the flexibility to continue investing while also preserving financial strength. Moving to the next slide. Let's take a look at the continuous optimization of the cost of capital and debt tenure. LATAM has taken important steps over the past 2 years to improve its cost of debt. Through refinancing exercises carried out in '24 and '25, the group successfully reduced the weighted average cost of debt from 10.7% in 2023 to 6.6% as of the end of 2025. In parallel, LATAM debt amortization profile is well balanced with no short and midterm relevant maturities. Furthermore, LATAM holds call options in '26 and '27 that offer potential opportunities to reprofile these maturities and also reevaluate the potential tender split to improve even more this debt profile. Let's move now to Slide 12. As reflected in 2026 guidance published back in December, we expect it to be another year of continued profitable growth. Capacity is projected to grow between 8% and 10% and to deliver an adjusted operating margin between 15% and 17%, reflecting LATAM's focus on efficiency and disciplined execution. In terms of cash, adjusted levered free cash flow is expected to exceed $1.7 billion from $1.5 billion this last year, reinforcing the group's ability to consistently translate earnings into liquidity. We also expect liquidity above $5 billion for the end of 2026. And as we have mentioned in Investor Day held in December, given our financial policy range, we would have between $1 billion and $1.6 billion after CapEx investments and minimum dividend payments available for additional capital allocation initiatives in 2026. This year, LATAM will continue investing in key strategic areas, including the customer experience, the renewal of the fleet, efficient focused innovations and the continued reinforcement of balance sheet discipline. Again, to remind you of the main figures that were disclosed in the Investor Day, the CapEx plan for this year, net of financing, is about $1.7 billion. For the year, the group is expecting to receive 41 aircraft, of which 3 are wide-bodies and 12 correspond to the first Embraer E2s. The last slide, Slide 13. And before we move to the Q&A, let me briefly highlight the key message from 2025 performance. 2025 was another year of strong and consistent performance for LATAM, both operationally and financially. Operational excellence was matched by record levels of customer and employee satisfaction with NPS and Organizational health index reaching all-time highs. The group transported a record number of passengers, expanded the network with discipline and delivered a significant improvement in profitability with adjusted operating margin increasing 3.5 percentage points year-over-year to 16.2%. This profitability was translated all the way to the bottom line with annual net income closing at $1.5 billion. These results reflect the group's ability to grow efficiently while maintaining a focus on margins and operational excellence. During 2025, we fully funded investments in the business and met all financial commitments while generating cash. LATAM generated $1.4 billion in cash before executing 2 share repurchases and separately distributing dividends while still holding a strong liquidity level and low leverage. At the same time, we strengthened our balance sheet, aiming at the financial policy targets and focus on reducing the cost of debt, which now stands below 7%. Looking ahead, we are entering 2026 with solid momentum. Our guidance reflects continued profitable growth, supported by healthy demand, commercial discipline and a clear focus on the strategic priorities. With that, we will now open the line for your questions.

Operator, Operator

Our first question comes from Julia Orsi from JPMorgan.

Julia Orsi, Analyst

So we have 2 questions on our side. The first one is on yields. So we saw a strong pricing performance this quarter. Congratulations on that. Can you provide additional details on how yields are tracking across the regions? And the second one, based on recent trends, how is the booking curve and demand environment evolving? Is there any particular region that has been outperforming or underperforming?

Roberto Alvo Milosawlewitsch, CEO

Julia, this is Roberto. Thanks for the questions. We saw, in general, strong and stable demand over all of the business areas where we operate. In the last couple of months of the year, domestic Chile was a little bit slower as compared to particularly 2024, but at an industrial level, and you can see that on the public figures. But we have seen already a recovery in the first months of the year. So I would say that all the business performed on a relatively good basis in 2025 last quarter in the passenger segment. Cargo, it was also good. Again, as Ricardo said, a very strong basis of comparison in the last quarter of 2024. It still was robust and the current appreciation of the currencies will probably increase import demand into the region in the upcoming months. The booking curve for early 2026 looks healthy. We see no issues that concern us today. And in general, all the segments are performing well. As it has happened in the past 2 or 3 years, the segment that has been growing the most is international, and this is also reflected in our capacity during 2025 and also the guidance that we provided for 2026. But in general, we see no concerns on the demand side going forward, at least for the first quarter.

Operator, Operator

Our next question comes from Michael Linenberg from Deutsche Bank.

Michael Linenberg, Analyst

A couple of questions here. Great way to end 2025. These are fantastic results. The when you talked about the CASK impact of 0.2% from the impact of the weak dollar. As we think about LATAM and how you have evolved your structure and the seasonality and the geography of your network, where do you come out with respect to the dollar? Is a weaker dollar overall better, even though I realize there's a cost headwind? Is it just better overall for the performance of the company? And I’m just sort of in the context of the last 12 months, we've seen about a 10% depreciation of the dollar. How should we think about that on your business?

Roberto Alvo Milosawlewitsch, CEO

Michael, thank you for your question. It's a good one. Ultimately, a stronger local currency is more beneficial for us than a weaker one. This is primarily because most of our revenue is generated in local currency, while a significant part of our costs is in dollars. Therefore, our domestic markets function similarly to import industries. Additionally, on the international front, it is advantageous for us as well. Even though the costs of traveling to the region may increase, purchasing power for traveling abroad improves, and our sales balance is stronger in South America compared to long-haul flights. Thus, the overall impact of a stronger currency against the dollar, despite the higher costs, is positive for us.

Michael Linenberg, Analyst

Great, that's very helpful. I want to discuss CapEx for 2026. Last year, you added 26 airplanes. I understand this year will see heavier deliveries. The Embraers are a significant part of that, and I believe you're taking delivery of over 40 airplanes, around 40 or 41. Can you provide an update on how we should approach CapEx in 2026?

Ricardo Bottas, CFO

Michael, it's Ricardo. And you are right. We are expecting to receive 41 aircraft and the CapEx is $1.7 billion net of financing. Remember that a relevant part of the CapEx delivers is going to be financed through operating leases. We are holding to increase in the investments that we have. And remember, we have a lot of investments in the retrofit of the cabins, still the renovation and the starting of the process to implement the new premium content and so on and so forth. So that's the overall picture that we have. And remember, from these 41 deliveries that we are expecting, we expect to receive 3 additional 787s and also the first 12 Embraers in the last quarter.

Roberto Alvo Milosawlewitsch, CEO

So the balance is 26 from the A320 family.

Operator, Operator

Our next question comes from Jens Spiess from Morgan Stanley.

Jens Spiess, Analyst

Congrats on the results. I have a question on the net debt coming in at $5.9 billion, which was around 8% above your guidance. So if you could just elaborate on what turned out to be different versus your initial expectations. I would appreciate that.

Ricardo Bottas, CFO

Sure. Actually, when we provide that guidance, it was before the announcement and the decision to distribute the $400 million dividend. So that was the main difference from the guidance that we disclosed before, Jens.

Jens Spiess, Analyst

Makes sense. Makes sense. So going forward, you will be updating your net debt guidance, right, for the potential dividends you will be paying. Is that correct? And just a follow-up question, if I may. On the E2s, when do you expect to deploy them? And what is your thought process on allocating that capacity? Will it be mostly targeting new routes and destinations? Or what's the plan there?

Ricardo Bottas, CFO

Okay. So only for that reason in terms of the debt update, we don't need to update the guidance for that because we disclosed all the information related to that. And if and when we need to update other specific situation from the guidance, we will update everything.

Roberto Alvo Milosawlewitsch, CEO

Jens, this is Roberto. Just complementing and clarifying one thing on what Ricardo said. So our guidance doesn't provide for any distributions on top of the minimum statutory dividends that we have to pay by law here in Chile, which is 30%, okay? So that's why you see $5 billion of liquidity going forward. But as Ricardo explained as well, over and above our finance policy, we have around $1 billion to $1.6 billion, and the Board will further decide on opportunities for capital allocation. If we end up doing something, we will inform the market at the right time, and we will update the figures related to that with those potential occurrences, okay? With respect to the E2s, so they will be deployed in Brazil domestic, the first 12 that we will receive this year. The strategy is that they will be based out of our hubs. So we expect to see them flying out of Guarulhos, out of Brasilia, and out of Fortaleza. You can think about this in 2 ways. They allow us to fly to new cities where the 319s, even though at the same time, their economics don't allow us to operate those cities. You will see new destinations and also probably increased frequencies on certain routes where we currently operate an A320-related fleet and some combinations of these that we have never flown when you combine these 2 things. So you will see domestic Brasilia routes, both in opening new routes and increasing frequency in certain routes.

Jens Spiess, Analyst

Okay. Very clear. And just one quick follow-up, sorry, on the dividend distribution and the net debt guidance. So looking at 2026, everything that will be forward-looking is only the regulatory or mandated dividends that you're factoring in there. Anything in excess basically would only be updated on like looking backwards basically on what you already paid or what you already announced, right? Just to make sure we'll be modeling this correctly.

Ricardo Bottas, CFO

Yes, you are correct. So as Roberto mentioned, the range that we disclosed as a calculation under the financial policy to have between $1 billion and $1.6 billion available considers the 21% and 25% range of the guidance in terms of liquidity. That amount is not considering the guidance that we provide. So we only consider the CapEx that is expected and also the minimum dividends.

Operator, Operator

Our next question comes from Filipe Nielsen from Citigroup.

Filipe Ferreira Nielsen, Analyst

So I have 2 on my side. One is related to the costs that we saw this quarter. Just trying to break it between potential one-offs or costs that you think could be something more structural during 2026. We know that there are effects from a weaker dollar, stronger local currency. So if you could clarify which impacts were more like one-offs in the quarter and which ones could remain for longer during 2026? And my second question is regarding the cargo operations. Just wanted to check your sense on how cargo yields should evolve in 2026. We have the guidance for volumes, but I just wanted to make sure how the top line on cargo should evolve.

Ricardo Bottas, CFO

Okay, Filipe. To provide more detail about our impact in the fourth quarter, we disclosed that from the 4.7, we identified two different influences. One is 0.2 related to the weaknesses of the U.S. dollar, and the other 0.2 represents one-off items from this quarter. I want to emphasize the guidance we provided for 2026, which is not structural in nature. We are confident in the level of investments we have across all initiatives. As we mentioned during Investor Day, we have over 700 initiatives internally aimed at increasing efficiency. Our company maintains a consistent focus on cost containment. The guidance for this year aligns with the same trend, projecting between $0.043 and $0.045. There is nothing material or structural that could present risks from our viewpoint. However, we should note that our guidance includes an assumption of the BRL at 5.5. Currently, the BRL is at 5.2, which we need to consider. On a positive note, as Roberto explained in a previous response, we also see an uplift in RASK. Lastly, I want to highlight that while CASK has increased by 7.9%, RASK has risen even more, by 11.7%.

Roberto Alvo Milosawlewitsch, CEO

Regarding cargo, we do not disclose our unit revenues. However, I can share a couple of important points. Northbound traffic generally represents exports, while southbound traffic is related to imports. Typically, import traffic yields higher returns than export traffic due to the nature of the goods—raw materials are shipped north, whereas perishables, especially technological perishables, flow south. There may be a potential shift in this mix if we experience currency appreciation during the year, but we are not seeing significant demand issues that would suggest a major change in our cargo unit revenues. The beginning of the year is usually slow as companies send out inventories to close out the previous year, and the Chinese New Year further impacts cargo flow, as China essentially pauses operations for a week. Nevertheless, the growth potential and market stability remain strong, and we have no immediate concerns.

Operator, Operator

Our next question comes from Gabriel Rezende from Itau BBA.

Gabriel Rezende, Analyst

Congratulations on the set of very strong results. Two questions here on our side. Correct me if I'm wrong, but you mentioned that around 23% of your passenger revenue came from those more premium-related revenue. Just trying to understand where the company is targeting to land this number along 2026. So how much can this 23% increase along the year? What is the company's target at this point? And also, we talked a lot during the call about this positive FX environment, especially here in Brazil. And also, we are seeing a favorable oil price environment as well. Just trying to understand whether you see the sector at some point in time, perhaps this year, accommodating yields into a slightly lower base versus where we are at this point.

Roberto Alvo Milosawlewitsch, CEO

Thank you. To address the second question first, Brazil was the fastest-growing market among the 10 largest domestic markets worldwide in 2025, which is quite impressive. We see positive momentum from this perspective. At this time, we believe the capacity outlook for the industry in Brazil, coupled with demand perceptions, indicates a stable year compared to 2025. There is potential for us to further develop our strategy and network there, as we have done over the past 2 or 3 years. I don't anticipate a significant change in market dynamics for 2026; we don't see any indicators for that. More generally, the capacity situation in the industry, along with the ongoing issues with engine manufacturers trying to replace older aircraft and fulfill their delivery commitments, suggests that 2026 will resemble 2025 in terms of global capacity. I apologize, but I forgot the first question. Could you remind me, please?

Gabriel Rezende, Analyst

What percentage of our premium revenues do we anticipate going forward, considering that we have reached 23% of premium revenues?

Roberto Alvo Milosawlewitsch, CEO

We don't disclose the target for premium revenue, but we believe that premium revenue will still grow faster than our total revenue and our capacity during 2026, as it has happened in the last few years.

Operator, Operator

Our next question comes from Savanthi Syth from Raymond James.

Savanthi Syth, Analyst

Just a couple of questions from me. First one, just on the corporate side. I know you mentioned demand is strong widely across the regions. But I was curious what you're seeing on the corporate side, if there's any acceleration there or any trends to call out? And then just secondly, I'm wondering there's one of your competitors that have kind of refocused on premium offering. And just wondering what you're seeing in the region and if there's still kind of maybe premium growth in offering is still outstripping or actually maybe demand is outstripping the supply.

Roberto Alvo Milosawlewitsch, CEO

So corporate recovered probably 1.5 years ago from before 2020 already. Growth in corporate demand looks stable. I think what's most relevant is that we have been gaining consistently market share in corporate segments. And you can see very clearly on public information provided by travel agencies in Brazil, for example, where you can see that public information figure. And the set of what we have created, the network, the execution, the frequent flyer leads us to believe that this position we have is going to be maintained or even increased in the upcoming future. So no concerns with respect to corporate demand at this point in time. I think that LATAM has put itself in a very strong position to serve corporate customers, whether it's because of our network, because of our FFP, or because of our delivery. And the second question, it's interesting. You mentioned the premium offer. I think I said it in my speech, and it all starts with people. You are not going to be able to attract customers that want to fly again with you, particularly demanding customers, only with hardware. You need software. In that sense, I think that LATAM stands out completely with respect to not only its direct competition in the region, but also in many regions across. This is one, I think, of the learnings of the last few years and what has started the cycle where now you see profitable growth that we have. At the same time, we believe that we can improve execution, and I believe that we can still improve significantly on hardware, on the physical delivery of our product. As Ricardo mentioned, we just inaugurated a lounge in Lima. We're going to reinaugurate a bigger lounge in Guarulhos next year. We'll have premium economy on wide-bodies, and we'll install Wi-Fi on wide-bodies, which I think is an important lag. And at the end of the day, even though maybe our competitors are trying to catch up to us, we continue improving. But the DNA of this organization and the people, I think, is unmatchable at this point in time.

Operator, Operator

Our next question comes from Felipe Ballevona from Santander.

Felipe Ballevona, Analyst

I have a follow-up on Jens' question about net debt. You stated that you ended up missing the guidance due to the $400 million dividend announcement. However, you said that the minimum dividend is considered in the guidance. And if I'm not mistaken, those $400 million wouldn't be extraordinary dividends, but minimum ones. So how can I put this 2 together? And also on a separate note, what's the currency breakdown of your debt?

Roberto Alvo Milosawlewitsch, CEO

Yes. I'll pass to Ricardo on the second one. But I mean, just maybe it's good to clarify, minimum dividends are 30%, but they are paid the following year, normally after the shareholders' meeting, and that happens in Chile normally in April, okay? What we did is that we advanced a significant portion of minimum dividends in December and we paid $400 million in December. So as what you are seeing is net debt as of 31 of December, and that was not in the previous guidance. You have to adjust for those $400 million, okay, which means that in April, the company would have already counted those $400 million for the calculation of the final dividend that it would. So that's probably the clarification on this, okay? With respect to currency...

Ricardo Bottas, CFO

In terms of currency, I think almost 100% of our debt is in U.S. dollars. We only have one local bond that is close to $160 million in local currency. So it's almost everything in U.S. dollars.

Roberto Alvo Milosawlewitsch, CEO

And that's local currency...

Operator, Operator

We currently have no further questions. So I'll hand back to Ricardo for closing remarks.

Ricardo Bottas, CFO

Again, thank you all for connecting this morning. Please note that our Investor Relations team is available for any further questions. Have a great day, and thank you again.

Operator, Operator

This concludes today's call. Thank you for joining. You may now disconnect your lines.