EasyJet shares drop after company posts lower profit guidance
EasyJet said today it expects profits to fall this year due to significant foreign exchange movements and a testing trading environment.
The company's share price fell 6.8 per cent at the open.
Profit before tax is expected to be in the range of £490m to to £495m, down from £686m in 2015 – a possible drop of 28 per cent.
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Analysts weren't expecting the figures to be this bad; they predicted profit before tax would be between £497m and £517m.
The figures
The airline said foreign exchange movements are expected to have an adverse impact to the tune of £90m compared to last year, an increase of £35m since the day of the EU referendum.
EasyJet said its profit figure was "strong…despite major external shock events and disruption."
The company's fuel bill is expected to drop by between £75m and £80m in the second half of the year as compared to the six months to 30 September 2015. It also reported its capacity had grown by 6.1 per cent in the three months ending 30 September.
Why it's interesting
It's been a difficult year for EasyJet, which has been contending with investors' worries about Brexit, a price war with Ryanair, worker strikes and the threat of terrorist attacks putting people off some holiday destinations.
This summer, EasyJet, British Airways and Ryanair all cancelled hundreds of flights due to strikes by French air traffic control unions.
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These problems were compounded by the Brussels terror attack, the EgyptAir tragedy, the Nice attack and heightened instability in Turkey.
What EasyJet said
Carolyn McCall, chief executive, said: "We have been disproportionately affected by extraordinary events this year but our excellent network, cost control and revenue initiatives and our strong balance sheet underpin our confidence in the business.
"The current environment is tough for all airlines, but history shows that at times like this the strongest airlines become stronger. That is why we will continue to invest for the long term success of the business, establishing even stronger market positions, delivering excellent customer service and establishing new revenue opportunities for the future."