Wizz Air shares tank after profit warning
Wizz Air slashed its annual profit forecast on Thursday despite quarterly losses more than halving amid record passenger traffic.
Shares tanked on the announcement, falling nearly 12 per cent in early trading.
The Hungarian carrier reported a €75.9m (£63.6m) loss in the three months ended December 31, around 58 per cent smaller than the year prior.
Revenue came in at €1.18bn, up 10.5 per cent and driven by record quarterly passenger traffic of 15.5m and higher ticket fares. Passenger ticket revenue increased 13 per cent to €626.2m.
But the airline said it had been forced to cut its full-year net income guidance from €350-€450m, to €250-€300m.
In a statement, Wizz Air boss Jozsef Varadi said the “stronger demand environment” had not flown through to its reported profit level due to “cost headwinds” and a significant €160m negative foreign exchange charge.
“While a non-cash item, it has the potential to introduce significant volatility to our reported profitability,” Varadi explained.
It marks another disappointing set of results for the low-cost carrier, which has consistently struggled to capitalise on soaring demand for travel amid supply chain issues and conflict in the Middle East.
Wizz has been forced to ground a significant chunk of its fleet due to long-running issues with its Pratt and Whitney-manufactured engines. It said on Thursday it expects around 40 of its aircraft to be grounded through 2026.
Shares are down more than 30 per cent over the last 12 months.
“Trading through the remainder of the current fiscal year remains a focus for Wizz’s management team, from maximizing daily revenues to seeking further short and longer-term cost savings,” Varadi said.
“As we look ahead to F26, we believe that we are at an important inflection point for the business as we transition to a sustained period of growth for the rest of the decade.”