16th Apr 2020 08:49
(Alliance News) - easyJet PLC offered a mixed first half picture on Thursday and added that it has secured extra funds of nearly GBP2 billion to help the budget carrier grapple with the financial bite of the Covid-19 pandemic.
Shares in the company climbed 7.9% to 650.60 pence each early on Thursday in London, making it the top performer in the FTSE 100.
In the six months to March 31, easyJet's reported pretax loss is forecast to stretch to between GBP360 million and GBP380 million from the GBP272 million it reported in the year prior.
The reported pretax figure includes a hit between GBP175 million and GBP185 million in relation to over-hedging of fuel and foreign exchange.
On a headline basis however, the pretax loss for the first half is to narrow to between GBP185 million and GBP205 million, from GBP275 million.
Revenue, meanwhile, is forecast to grow 1.6% to GBP2.38 billion from GBP2.34 billion, though seat capacity slipped 7.6% to 42.7 million from 46.2 million.
Chief Executive Johan Lundgren said: "Our first half trading performance was very strong prior to the impact of coronavirus, which shows the strength of easyJet's business model. Since then I have been immensely proud of our team, right across the business, and the way they have worked through these tough times to put us in the strong position we are in now."
First half passengers flow were down 7.4% annually to 38.6 million and seats flown down 7.6% to 42.7 million.
In Thursday's stacked update, easyJet also said it has secured roughly GBP400 million on two term loans, secured against its aircraft assets.
Earlier in April, it said it was issued with GBP600 million under the UK's Covid corporate financing facility. The carrier has also drawn down a USD500 million revolving credit facility.
"Furthermore we continue to engage with an active lessor market interested in acquiring aircraft from easyJet's fleet on a sale and leaseback basis. Announcements on the progress of these engagements will be made in due course, with anticipated proceeds expected to be in the range of GBP400 million and GBP550 million," easyJet added.
The company said that upon closure of all these funding schemes, it will have generated total additional funds between GBP1.85 billion and GBP1.95 billion.
The company's entire fleet was grounded on March 30, but it said its winter 2020/2021 seats were released earlier than usual. Bookings for the winter season "are well ahead" on the year prior.
"At this stage there can be no certainty of the date for restarting commercial flights. We will evaluate continuously based on changing regulations and customer demand," easyJet said.
Also getting a nod on Thursday was easyJet's deal with Airbus SE, which has drawn the ire of the FTSE 100 firm's founder and biggest shareholder Stelios Haji-Ioannou.
Earlier in April, easyJet said it pushed back the deliveries of 24 aircraft until the end of financial 2022.
It added on Thursday: "Regarding this deal with Airbus, it is important to note that easyJet has no ability to terminate the contract by reason of force majeure.
"easyJet would be liable for any future losses that the OEM could demonstrate as a result of the termination of the contract."
On Tuesday, Haji-Ioannou said he had written to the UK market regulator regarding the airline's deal with Airbus. The founder accused an update from easyJet on Tuesday of being "as clear as mud" and warned that the company maybe in breach of UK market abuse regulations.
On Tuesday, he said: "The scoundrels at easyJet simply do not have the corporate authority to cut such a deal given the collapsed share price and the monumental size of the Airbus order (about GBP4.5 billion). If the FCA does not force them to call a shareholder vote, my company, easyGroup, will not hesitate to take the regulator to judicial review as the law provides.
"In plain English that means going to a High Court judge to ask for an injunction requiring the regulators to do their job properly."
Aside from the contentious Airbus deal, easyJet added on Thursday that it has cancelled or deferred a number of other projects, chopping its capital expenditure by about GBP1 billion.
By Eric Cunha; [email protected]
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