WIZZ AIR HOLDINGS PLC – RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2018
RECORD PROFITS ON 20% PASSENGER GROWTH IN H1 SIGNIFICANTLY INCREASING UNIT REVENUE IN H2
FY NET PROFIT GUIDANCE LOWERED TO €270M - €300M DUE TO HIGHER FUEL PRICES AND SUMMER DISRUPTIONS
RECORD H1 PROFIT AND STRONG BALANCE SHEET
- Total revenue increased 20.0% to €1,379.1 million
- Ticket revenues increased 25.3% to €858.6 million
- Ancillary revenues grew 12.1% to €520.5 million.
- Profit for the period was a record €292.2 million in H1, a yoy increase of 1.2%.
- Profit for the second quarter was a record €242.3 million, yoy increase of 5.1%
- Higher fuel prices has created an estimated €80 million cost headwind for the full year of which half is expected to be offset through cost and capacity discipline.
- The lack of Easter traffic in FY19 is estimated at €20 million for the full year.
- The closure of Wizz Tours will have a €5m negative impact on full year net profit.
- Total cash at the end of September 2018 was €1,336.3 million, of which €1,156.9 million was free cash.
József Váradi, Wizz Air Chief Executive said:
“Wizz Air’s unique combination of an industry-leading cost base and number one position in the growing CEE market makes us a structural winner. The arrival of game-changing, well-priced A321 NEO aircraft into our fleet in the fourth quarter, financed at very attractive levels, will enable Wizz Air to increase its cost advantage even further. We are delivering on our mission to be the undisputed cost leader among European LCCs, with market leading growth rates and one of the highest profit margins in the industry.
Our ultra-low cost business model provides a significant competitive advantage in an environment of higher fuel prices. As Wizz Air continues to drive its cost base even lower and profitably stimulate traffic, this advantage allows us to capture an even greater share of our market and extend our reach. We anticipate the capacity rationalisation resulting from this increased pressure on our competitors will result in a better yield environment.
On the back of the rising fuel price in the first half the Company has trimmed second half capacity growth to 14% (previously 18%) and as a result second half yields are responding well, tracking 7% higher than last year with load factors also higher.
The operating environment in the first half was particularly challenging for all European airlines with unprecedented disruptions caused by ATC strikes, slot constraints as well as heavily congested airports. These conditions also coincided with the Company’sramp up of our new UK airline, Wizz Air UK, and an extensive delivery program of 17 aircraft in 17 weeks. Our operations are now back on track with October and November KPIs ahead of last year.
We are starting to enjoy further cost improvements from our investment grade credit rated balance sheet with over €1.1 billion of free cash and the Company has recently signed letters of intent to finance 10 A321 NEO aircraft at rates significantly better thanthe Company’s previous best deals.
The encouraging revenue environment, robust demand and an improved operational performance combined with our relentless focus on costs will enable the Company to offset approximately half of the fuel headwind which is estimated at around €80 millionfor the full year and disruption costs. As a result our full year net profit guidance is lowered to a range of between €270m and€300m”.
Source: Wizz Air