[h=2]RECORD FIRST HALF PROFITABILITY ON 20% PASSENGER GROWTH[/h]Wizz Air Holdings Plc (“Wizz Air” or “the Company”), the largest low-cost airline in Central and Eastern Europe (“CEE”), today issues its unaudited results for the six months to 30 September 2015 (“first half” or “H1”).[TABLE="width: 450"]
[TR]
[TD]
[TD="width: 64"]2015
(million)
[/TD]
[TD="width: 64"]2014
(million)
[/TD]
[TD="width: 64"]Change
[/TD]
[/TR]
[TR]
[TD="width: 450"]Passengers carried
[/TD]
[TD="width: 64"]
[TD="width: 64"]
[TD="width: 64"]
[/TR]
[TR]
[TD="width: 486"]Revenue (€)
[/TD]
[TD="width: 64"]
[TD="width: 64"]
[TD="width: 64"]
[/TR]
[TR]
[TD="width: 486"]Profit before income tax (€)
[/TD]
[TD="width: 64"]
[TD="width: 64"]
[TD="width: 64"]
[/TR]
[TR]
[TD="width: 486"]Reported Net Profit (IFRS) (€)
[/TD]
[TD="width: 64"]
[TD="width: 64"]
[TD="width: 64"]
[/TR]
[TR]
[TD="width: 486"]Underlying Net Profit* (€)
[/TD]
[TD="width: 64"]
[TD="width: 64"]
[TD="width: 64"]
[/TR]
[/TABLE]
Record H1 profitability from strong summer performance
József Váradi, Wizz Air Chief Executive said:
“We are very pleased with summer trading and to report record profitability for the first half of F16. We have continued to grow our network and increase our passenger numbers throughout the period while maintaining an industry leading, ultra-low cost base. We are excited about the arrival of the A321s from November this year. These aircraft will underpin our growth plans for the next decade and further improve our cost competitiveness.We continue to deliver against our ambition to make safe, reliable, affordable air travel available to everyone in Central and Eastern Europe. Our ultra-low cost model gives us a clear cost advantage versus most of our rivals, including many other low cost airlines, and as a result we are able to offer our passengers low fares and sustain a relatively high growth rate compared to other carriers. We have a strong balance sheet, proven management team, best-in-class fleet and leading market position in CEE. This winning formula leaves Wizz Air well placed to continue to deliver significant growth and returns for our shareholders”.FULL YEAR OUTLOOK
Wizz Air today reiterates the guidance provided to the market in its trading update on 29 September 2015. With the continued expansion of its network, Wizz Air estimates that it will grow capacity by around 18% in the 2016 financial year, split approximately 17% in H1 and 19% in the second half of the financial year. As previously indicated, lower fuel prices are feeding through to lower air fares. Wizz Air anticipates that the downward trend in unit revenues will continue in the second half of the financial year and reiterates that the Company has very limited visibility of demand in the final quarter of its financial year.Nonetheless the strong H1 financial performance, combined with robust bookings for the third quarter, are encouraging and the Company expects to report an underlying net profit for the full year (excluding unusual and exceptional items) in the range of €190 million to €200 million. Wizz Air’s current expectations for full year performance are summarised below.[TABLE="width: 450"]
[TR]
[TD]
[TD="width: 299"]November 2015
Guidance
[/TD]
[TD="width: 220"]
[/TD]
[/TR]
[TR]
[TD="width: 151"][/TD]
[TD="width: 299"](unchanged from 29 September 2015 trading update)
[/TD]
[TD="width: 220"]Comment
[/TD]
[/TR]
[TR]
[TD="width: 151"]Capacity growth (ASKs)
[/TD]
[TD="width: 299"]
[TD="width: 220"]
[/TR]
[TR]
[TD="width: 151"]Average stage length
[/TD]
[TD="width: 299"]
[TD="width: 220"]
[/TR]
[TR]
[TD="width: 151"]Load Factor (%)
[/TD]
[TD="width: 299"]
[TD="width: 220"]
[/TR]
[TR]
[TD="width: 151"]Fuel CASK
[/TD]
[TD="width: 299"]
[TD="width: 220"]
[/TR]
[TR]
[TD="width: 151"]Ex-fuel CASK
[/TD]
[TD="width: 299"]
[TD="width: 220"]
[/TR]
[TR]
[TD="width: 151"]Total CASK
[/TD]
[TD="width: 299"]
[TD="width: 220"]
[/TR]
[TR]
[TD="width: 151"]Revenue per ASK
[/TD]
[TD="width: 299"]
[TD="width: 220"]
[/TR]
[TR]
[TD="width: 151"]Effective tax rate
[/TD]
[TD="width: 299"]
[TD="width: 220"]
[/TR]
[TR]
[TD="width: 151"]Underlying net profit
[/TD]
[TD="width: 299"]
[TD="width: 220"]
[/TR]
[/TABLE]
Q3 OUTLOOK
For the third quarter (October to December 2015) of the 2016 financial year, Wizz Air expects to grow capacity, in terms of ASKs, by around 19% and anticipates a modest rise in load factor compared to the same period in the prior year. Despite continued downward pressure on unit revenues, both operating margins and underlying net profit margins are expected be modestly ahead of the prior year.AIRBUS A321NEO ORDER
On 3 November 2015, the Company’s shareholders approved an agreement with Airbus SAS (“Airbus”) that provides for (i) the purchase of 110 A321neo aircraft for delivery between 2019 and 2024 (inclusive), (ii) uncommitted purchase rights for the purchase of an additional 90 A321neo aircraft and (iii) a significant amount of flexibility to ensure that the aircraft delivery stream meets Wizz Air’s operational requirements, including the possibility to substitute a number of A321neo aircraft with A320neo aircraft and/or to defer a number of aircraft scheduled for delivery in any one calendar year. Wizz Air and Airbus also agreed to cancel ten A320ceo aircraft previously scheduled for delivery in 2018.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. 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.The contracted base case delivery stream represents a 10% compound annual growth rate in the number of aircraft and a 13% compound annual growth rate in capacity in the period of calendar years 2015 to 2024. However, Wizz Air has agreed certain flexibility with Airbus, in terms of both the type of aircraft to be delivered as well as the contracted delivery years.
[TR]
[TD]
Six months to 30 September
[/TD][TD="width: 64"]2015
(million)
[/TD]
[TD="width: 64"]2014
(million)
[/TD]
[TD="width: 64"]Change
[/TD]
[/TR]
[TR]
[TD="width: 450"]Passengers carried
[/TD]
[TD="width: 64"]
10.65
[/TD][TD="width: 64"]
8.85
[/TD][TD="width: 64"]
+20.4%
[/TD][/TR]
[TR]
[TD="width: 486"]Revenue (€)
[/TD]
[TD="width: 64"]
836.4
[/TD][TD="width: 64"]
727.3
[/TD][TD="width: 64"]
+15.0%
[/TD][/TR]
[TR]
[TD="width: 486"]Profit before income tax (€)
[/TD]
[TD="width: 64"]
190.9
[/TD][TD="width: 64"]
164.0
[/TD][TD="width: 64"]
+16.4%
[/TD][/TR]
[TR]
[TD="width: 486"]Reported Net Profit (IFRS) (€)
[/TD]
[TD="width: 64"]
182.1
[/TD][TD="width: 64"]
158.1
[/TD][TD="width: 64"]
+15.2%
[/TD][/TR]
[TR]
[TD="width: 486"]Underlying Net Profit* (€)
[/TD]
[TD="width: 64"]
205.9
[/TD][TD="width: 64"]
153.4
[/TD][TD="width: 64"]
+34.2%
[/TD][/TR]
[/TABLE]
Record H1 profitability from strong summer performance
- Total revenue increased 15.0% to €836.4 million.
- Ticket revenues increased 11.6% to €544.6 million and ancillary income grew 21.9% to €291.8 million.
- Ancillary revenue per passenger increased 1.3% to €27.4 for the first half.
- Total unit revenue declined 1.7% to 4.64 euro cents per available seat kilometre (ASK) in H1.
- Reported (IFRS) net profit was €182.1 million, an increase of 15.2%.
- Underlying net profit was a record €205.9 million, an increase of 34.2%.
- Management’s expectation of an underlying net profit for the year ending 31 March 2016 (“F16”) in the range of €190 million to €200 million remains unchanged. This implies an underlying loss of between €6 million and €16 million in the second half (“H2”) of F16, broadly in line with the H2 F15 loss of €7m.
- Total unit costs fell by 5.1% to 3.46 euro cents per ASK in H1.
- Ex-fuel unit costs declined 1.0% to 2.19 euro cents. Fuel unit costs fell by 11.3% to 1.27 euro cents.
- Fleet expansion continues, with eight aircraft added during H1, increasing the fleet to 63 Airbus A320s.
- Average aircraft age of 3.8 years, one of the youngest fleets of any major European airline.
- Load factor increased 1.6 percentage points to 90.7 per cent in H1, one of the highest in the industry.
- Passengers carried increased 20.4% to 10.7 million consolidating Wizz Air’s position as CEE’s leading low cost carrier.
- Route network has continued to grow with the opening of two new bases and 38 new routes. Wizz Air now offers more than 390 routes to 39 countries from 22 bases.
- 110 A321 neo aircraft (plus purchase rights for an additional 90) order with Airbus finalised providing growth capacity until the end of 2024.
- Brand refresh launched in Q1 as Wizz Air embarks on its second decade of growth.
- Seamless roll-out of fully allocated seating on all services and yield management phase now underway.
- Wizz Discount Club membership now exceeds 650,000, year-on-year growth of 21%.
- Digital investments and new languages on wizzair.com ensure user friendly access and hassle free travel experience.
- Total cash at the end of September was €710 million of which €617 million is classified as free cash.
- Shareholders’ equity reached €656 million, an increase of €328 million versus September 2014 and €196 million since March 2015.
- Adjusted net debt to EBITDAR declined to a ratio of 1.2 at the end of September 2015 from 2.0 a year earlier.
József Váradi, Wizz Air Chief Executive said:
“We are very pleased with summer trading and to report record profitability for the first half of F16. We have continued to grow our network and increase our passenger numbers throughout the period while maintaining an industry leading, ultra-low cost base. We are excited about the arrival of the A321s from November this year. These aircraft will underpin our growth plans for the next decade and further improve our cost competitiveness.We continue to deliver against our ambition to make safe, reliable, affordable air travel available to everyone in Central and Eastern Europe. Our ultra-low cost model gives us a clear cost advantage versus most of our rivals, including many other low cost airlines, and as a result we are able to offer our passengers low fares and sustain a relatively high growth rate compared to other carriers. We have a strong balance sheet, proven management team, best-in-class fleet and leading market position in CEE. This winning formula leaves Wizz Air well placed to continue to deliver significant growth and returns for our shareholders”.FULL YEAR OUTLOOK
Wizz Air today reiterates the guidance provided to the market in its trading update on 29 September 2015. With the continued expansion of its network, Wizz Air estimates that it will grow capacity by around 18% in the 2016 financial year, split approximately 17% in H1 and 19% in the second half of the financial year. As previously indicated, lower fuel prices are feeding through to lower air fares. Wizz Air anticipates that the downward trend in unit revenues will continue in the second half of the financial year and reiterates that the Company has very limited visibility of demand in the final quarter of its financial year.Nonetheless the strong H1 financial performance, combined with robust bookings for the third quarter, are encouraging and the Company expects to report an underlying net profit for the full year (excluding unusual and exceptional items) in the range of €190 million to €200 million. Wizz Air’s current expectations for full year performance are summarised below.[TABLE="width: 450"]
[TR]
[TD]
[/TD][TD="width: 299"]November 2015
Guidance
[/TD]
[TD="width: 220"]
[/TD]
[/TR]
[TR]
[TD="width: 151"][/TD]
[TD="width: 299"](unchanged from 29 September 2015 trading update)
[/TD]
[TD="width: 220"]Comment
[/TD]
[/TR]
[TR]
[TD="width: 151"]Capacity growth (ASKs)
[/TD]
[TD="width: 299"]
18%
[/TD][TD="width: 220"]
H1 2016: 17%, H2 2016: 19%
[/TD][/TR]
[TR]
[TD="width: 151"]Average stage length
[/TD]
[TD="width: 299"]
Unchanged
[/TD][TD="width: 220"]
–
[/TD][/TR]
[TR]
[TD="width: 151"]Load Factor (%)
[/TD]
[TD="width: 299"]
Modest improvement
[/TD][TD="width: 220"]
–
[/TD][/TR]
[TR]
[TD="width: 151"]Fuel CASK
[/TD]
[TD="width: 299"]
- 6.0%
[/TD][TD="width: 220"]
Assumes spot price of $550/MT
[/TD][/TR]
[TR]
[TD="width: 151"]Ex-fuel CASK
[/TD]
[TD="width: 299"]
+1.0%
[/TD][TD="width: 220"]
–
[/TD][/TR]
[TR]
[TD="width: 151"]Total CASK
[/TD]
[TD="width: 299"]
- 1.5%
[/TD][TD="width: 220"]
Assumes $/€ rate of $1.10
[/TD][/TR]
[TR]
[TD="width: 151"]Revenue per ASK
[/TD]
[TD="width: 299"]
Down low single digit
[/TD][TD="width: 220"]
Pass through of lower fuel prices
[/TD][/TR]
[TR]
[TD="width: 151"]Effective tax rate
[/TD]
[TD="width: 299"]
6%
[/TD][TD="width: 220"]
–
[/TD][/TR]
[TR]
[TD="width: 151"]Underlying net profit
[/TD]
[TD="width: 299"]
€190-200 million
[/TD][TD="width: 220"]
Excluding unusual or exceptional items
[/TD][/TR]
[/TABLE]
Q3 OUTLOOK
For the third quarter (October to December 2015) of the 2016 financial year, Wizz Air expects to grow capacity, in terms of ASKs, by around 19% and anticipates a modest rise in load factor compared to the same period in the prior year. Despite continued downward pressure on unit revenues, both operating margins and underlying net profit margins are expected be modestly ahead of the prior year.AIRBUS A321NEO ORDER
On 3 November 2015, the Company’s shareholders approved an agreement with Airbus SAS (“Airbus”) that provides for (i) the purchase of 110 A321neo aircraft for delivery between 2019 and 2024 (inclusive), (ii) uncommitted purchase rights for the purchase of an additional 90 A321neo aircraft and (iii) a significant amount of flexibility to ensure that the aircraft delivery stream meets Wizz Air’s operational requirements, including the possibility to substitute a number of A321neo aircraft with A320neo aircraft and/or to defer a number of aircraft scheduled for delivery in any one calendar year. Wizz Air and Airbus also agreed to cancel ten A320ceo aircraft previously scheduled for delivery in 2018.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. 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.The contracted base case delivery stream represents a 10% compound annual growth rate in the number of aircraft and a 13% compound annual growth rate in capacity in the period of calendar years 2015 to 2024. However, Wizz Air has agreed certain flexibility with Airbus, in terms of both the type of aircraft to be delivered as well as the contracted delivery years.