Wizz Air Holdings Plc (“Wizz Air” or “the Company”), the largest low-cost airline in Central and Eastern Europe, today issues an unaudited interim management statement for the three months to 30 June 2015 (“first quarter” or “Q1”).
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Three months to 30 June
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2015
(million)
|
2014
(million)
|
Change
|
|
Passengers carried
|
4.9
|
4.1
|
+20.3%
|
|
Revenue (€)
|
332.5
|
295.2
|
+12.7%
|
|
Profit before income tax (€)
|
34.4
|
31.0
|
+11.0%
|
|
Reported Net Profit (IFRS) (€)
|
32.9
|
29.2
|
+12.5%
|
|
Underlying Net Profit (€)
|
33.9
|
29.6
|
+14.7%
|
Record Q1 profitability despite negative Easter effect
- Total revenue increased 12.7% to €332.5 million while revenue per available seat kilometre (RASK) declined 4.0%.
- Ticket revenues increased 6.7% to €205.9 million and ancillary income grew 23.9% to €126.6 million.
- Ancillary revenue per passenger increased 3% to €26.0 for the first quarter.
- Reported (IFRS) net profit was €32.9 million, an increase of 12.5%.
- Underlying net profit was a record €33.9 million, an increase of 14.7%.
- Record Q1 performance despite Easter falling one week earlier than in prior year with an estimated negative impact of €5.5 million on Q1 revenue and profit.*
- Forward bookings indicate robust demand for the important peak summer period and as a result underlying net profit for the full year is now expected to be in the range of €175 million to €185 million (a €10 million increase versus previous guidance).
Increasing our cost advantage
- Total unit costs fell by 3.3% to 3.54 euro cents per ASK in Q1.
- Ex-fuel unit costs declined 1.8% to 2.20 euro cents. Fuel unit costs fell by 5.6% to 1.34 euro cents.
- Fleet expansion with seven aircraft added during the quarter, increasing fleet to 62 Airbus A320s.
- Average aircraft age of 3.6 years means Wizz Air has one of the youngest fleets of any major European airline.
- Load factor increased 1.3 percentage points to 88.8 per cent in Q1, one of the highest in the industry.
Building on our strong market position in Central and Eastern Europe
- Passengers carried increased 20% to 4.9 million consolidating Wizz Air’s position as leading low cost carrier in CEE.
- Route network has continued to grow with the opening of two new bases and 22 new routes. Wizz now offers more than 380 routes to 38 countries from 22 bases.
- Memorandum of Understanding signed with Airbus to buy 110 A321 neo aircraft (plus options for an additional 90) to provide growth capacity until the end of 2024.
Enhancing our customer offering and experience
- Brand refresh launched on May 19 as Wizz Air embarks on its second decade of growth.
- Fully allocated seating on all services introduced in Q1 with seamless roll-out.
- Wizz Discount Club membership now exceeds 620,000, year-on-year growth of 26%.
- Digital investments ensure user friendly access to wizzair.com and a hassle free travel experience.
Strong balance sheet and cash flow
- Total cash at the end of June was €651 million of which €571 million is classified as free cash.
- Shareholders’ equity reached €515 million,+166% versus June 2014 and +12% versus March 2015.
- Adjusted net debt to EBITDAR reduced from 2.2 times at June 2014 to 1.3 times at end of June 2015.
*Note: While Easter weekend fell within the first quarter of 2015 (i.e. early April), the timing meant that a certain amount of Easter related holiday travel was undertaken in the prior month (i.e. March 2015) thus impacting demand in Q1 2015 when compared to the prior year.
AIRBUS A321 NEO ORDER
On 18 June 2015 the Company announced that it had signed a memorandum of understanding with Airbus S.A.S. to purchase 110 A321neo aircraft, with the first deliveries in 2019. The memorandum of understanding includes an option to purchase up to 90 A321neo additional aircraft and provides for the cancellation of 10 A320ceo due for delivery in 2018 under existing agreements. Wizz Air also has the right to substitute A320neo aircraft for A321neo aircraft depending on its needs. Completion of the order will be subject to the successful negotiation of a final purchase agreement and, thereafter, to Wizz Air shareholder approval.
This order will enable Wizz Air to deliver its fleet expansion plan and replace over 50 aircraft scheduled to leave the fleet between 2019 and 2024. By the end of this period Wizz Air expects to have a fleet totalling 154 aircraft, with significant flexibility to adjust up or down subject to market conditions. Apart from providing the capacity necessary to serve the long term growth potential of the CEE market, the order will provide for significantly lower operating costs through cabin innovations, the latest engine technology and other efficiency improvements. As with the 230-seat A321ceo, the first of which will be delivered later this year, the 239-seat A321neo will be deployed primarily on higher volume routes.
FULL YEAR OUTLOOK
With the continued expansion of our network, Wizz Air expects to grow capacity by around 17% in the 2016 financial year, spread evenly across the year. We continue to believe that there will be no earnings benefit from the decline in fuel prices over the last 12 months as the US dollar has strengthened against the euro over the same period and, as expected, lower fuel prices are feeding through to lower unit revenues. We expect the downward trend in unit revenues to continue for the foreseeable future.
Nonetheless, our forward bookings indicate robust demand for the peak summer period. Increased visibility over this important trading period means we now expect to deliver an improved outcome for the full year. Our current expectation is for Group post tax profit (excluding unusual and exceptional items) to be in the range of €175 million and €185 million. While we have limited visibility on the second half of the year, our current expectations for full year performance are summarised below.
Q2 OUTLOOK
For the second quarter (J
