Wizz Air Holdings (LON:WIZZ)
Market Cap £1.2 billion
Market Price 1618p (today down -165p or - 9.3%)
Bid/Off 1616p - 1620p Normal Market Size 750 shares
About the Company
Wizz Air Holdings Plc is the largest low-cost airline in Central and Eastern Europe. The company carried 5.7 million passengers this quarter which is up 20% (more than a million passengers) on same period last year.
Wizz Air flies around 500 different routes from 135 destinations in 40 different countries. The company has currently 74 planes but hopes to have circa 100 planes by 2018. 10 of these new planes are expected in 2017. Financing is already secured for the new A320/A321CEO aircraft. The average age of its modern fleet is 4.4 years. This offers Wizz Air cost advantage compared to their competitors' older fleet.
The discount Wizz Air card now has a membership of more than a million indicating potential regular and loyal customers for the future.
3rd Quarter Trading Statement
Released February 1st, 2017. Normally, the company would have posted good profits growth with higher profit forecasts for the year-end. What we appear to have got was a €20 million profit reduction for adverse weather. Yes, the weather has been abnormally cold in Eastern Europe. The previous guidance therefore for the full year had been €245m - €255m has now been cut by €20 million.
Also, our operations this winter have been disrupted by unusually severe weather conditions in CEE. As a result, management believes it is prudent to trim the company's guidance for net profit for the full year from the existing range of between €245 - €255 million to a range of between €225 - €235 million."
The weather may have been one factor but other concerns could be read into the statement. How come the passenger numbers were up by 20%, but total revenue for ticket sales was only up 2%? Plenty of evidence of ticket discounting here. More promising was the increase of 20% in the sale of ancillary services which almost matched the passenger increase. Overall percentage profits per passenger dropped from 5.5% in 2015 to 3.9% in 2016 which is a worrying trend.
PROFITABLE Q3… |
