17th Oct 2018 10:04
LONDON (Alliance News) - Flybe Group PLC on Tuesday said it expects its annual adjusted profit figure to come in below market expectations due to "increasingly adverse" fuel and currency headwinds.
The stock was down 39% on Wednesday at 19.75 pence per share.
The regional European airline had a higher load factor and increased revenue per seat in the second quarter ended September, but consumer demand in domestic and near-continent markets has weakened in recent weeks.
In the three months to the end of September load factor was up year-on-year by 7.2 percentage points to 86.6%, a record load factor for the summer season. Passenger revenue per seat was up 6.8% as capacity reduced by 10%.
For the six months to September-end, the load factor increased by 8.0 percentage points to 84.0%, with passenger revenue per seat estimated to be up 8%.
Excluding the E195 onerous lease provision, adjusted pretax profit for the first half is expected to come in unchanged, at GBP9.4 million, despite year-on-year cost increases of GBP17 million arising from the lower value of sterling and fuel & carbon price increases.
Looking ahead, Flybe said it expects higher fuel prices and weaker sterling to continue to impact its profit in the second half of its financial year.
It now estimates its adjusted pretax loss to be GBP12 million for its year ending March, narrowed from GBP19.2 million reported a year earlier. The result includes the benefit of GBP10 million onerous lease provision release.
Higher fuel costs, currency headwinds, and increased carbon prices are estimated to have a GBP29 million year-on-year impact for its current financial year.
"We have made progress in driving our unit revenues across the Summer season, but we are now seeing a softening in the market," said Chief Executive Christine Ourmieres-Widener.
"We continue to strengthen the underlying business and remain confident that our strategy will improve performance," added Ourmieres-Widener.
Flybe said it will announce its interim results on November 14.
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