1st Feb 2017 10:17
LONDON (Alliance News) - Wizz Air Holdings PLC on Wednesday reported growth in profit in the third quarter of its financial year, but trimmed its guidance for the full year as lower fuel prices continue to result in lower fares and due to operational disruption caused by "severe" winter weather conditions.
Shares in Wizz Air were trading down 8.4% at 1,632.00 pence on Wednesday morning, the worst performer in the FTSE 250.
The Central and Eastern European-focused budget airline said pretax profit in the three months ended December 31 more than doubled to EUR33.1 million from EUR16.2 million the year before, as revenue grew to EUR341.1 million from EUR310.5 million.
Of this, passenger ticket revenue grew by 2% to EUR190.5 million, and ancillary income rose by 21% to EUR148.8 million.
Total revenue per available seat kilometre, however, declined by 9.4% to 3.31 euro cents as lower fuel prices fed through to lower air fares. Average revenue per passenger fell to EUR59.7 from EUR65.5, as a rise in average ancillary revenue per passenger failed to offset a decrease in average ticket revenue per passenger.
Wizz Air said it carried 5.7 million passengers in the quarter, up from 4.7 million the year before, as capacity increased by 21% and load factor rose to 88.1% from 85.7%.
Cost per available seat kilometre also reduced by 7% to 3.16 euro cents, thanks to the decrease in the average fuel price.
Wizz Air added that it "remains on track to strengthen its position" in 2017 through continued growth in its core markets and expansion of its network.
However, despite the current year "looking like a very good year" for the company, Wizz Air noted that lower fuel prices continue to feed through to lower airfares, a "downward trend that looks likely to continue well into 2017".
In addition, the airline said its winter operations have been disrupted by "unusually severe" weather conditions, leading it to believe it "prudent" to trim its guidance for full-year net profit to a range of EUR225 million to EUR235 million.
Wizz Air predicts a EUR5 million hit to fourth-quarter profit as a result of operational disruptions, an "adverse macro effect" of EUR5 million and a EUR10 million hit due to weaker-than-expected fares.
Prior full-year profit guidance had been a range of EUR245 million to EUR255 million.
Net profit in the third quarter was a record EUR32.5 million, which was more than double that achieved a year earlier. Net profit in the prior financial year was EUR183 million.
By Karolina Kaminska; [email protected]; @KarolinaAllNews
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