REG - Wizz Air Holdings - Half Year Results
09/11/2023 07:15
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RNS Number : 9233S Wizz Air Holdings PLC 09 November 2023
WIZZ AIR HOLDINGS PLC - RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2023
RECORD NET PROFIT IN H1 AS CAPACITY CONTINUES TO GROW YOY AND OPERATIONAL
IMPROVEMENTS DELIVER RESULTS
LSE: WIZZ
Geneva, 9 November 2023: Wizz Air Holdings Plc ("Wizz Air", "the Company" or
"the Group"), the fastest-growing European low-cost airline, today issues
unaudited results for the six months to 30 September 2023 ("first half", "H1"
or "H1 F24").
This interim financial report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this report
should be read in conjunction with the 2023 Annual Report and Accounts, and
any public announcements made by Wizz Air Holdings Plc during the interim
reporting period.
FINANCIAL RESULTS (Unaudited)
Six months to 30 September 2023 2022 Change (1)
Passengers carried (million) 33.0 26.5 24.6 %
Total revenue (€ million) 3,052.3 2,193.8 39.1 %
EBITDA (€ million) (3) 878.1 217.8 303.2 %
EBITDA Margin (%) (3) 28.8 9.9 18.8ppt
Operating profit/(loss) for the period (€ million) 522.9 (63.8) n.m.
Unrealised foreign currency losses (€ million) (14.3) (285.2) (95.0) %
Profit/(loss) for the period (€ million) 400.7 (384.3) n.m.
RASK (€ cent) 4.91 4.48 9.6 %
Fuel CASK (€ cent) 1.55 2.11 (26.5) %
Ex-fuel CASK (€ cent) 2.60 2.62 (0.8) %
Total cash (€ million) (2) 1,837.8 1,529.0 20.2 %
Load factor (%) 92.6 86.9 5.7ppt
Period-end fleet size 187 168 11.3 %
Period-end seat count (thousand) 35,625 30,485 16.9 %
(1) n.m.: not meaningful as a variance is more than (-)100 per cent.
(2) Total cash is a non-statutory financial performance measure and
comprises cash and cash equivalents (30 September 2023: €1,132.3 million; 31
March 2023: €1,408.6 million), short-term cash deposits (30 September 2023:
€600.5 million; 31 March 2023: nil) and total current and non-current
restricted cash (30 September 2023: €105.0 million; 31 March 2023: €120.4
million).
(3) For further definition of non-financial measures presented refer
to "Glossary of terms and alternative performance measures (APMS)" section of
this document. These measures incorporate certain non-financial information
that management believes is useful when assessing the performance of the
Group.
HIGHLIGHTS
▶ Profit for the period of €400.7 million, with Q2 five times higher
year-on-year.
▶ Record high traffic of 33.0 million passengers in H1 (vs 26.5 million
in H1 F23 and 22.1 million in H1 F20).
▶ 27.0 per cent higher ASK capacity in H1 vs H1 F23 (+63 per cent vs H1
F20).
▶ Unit revenue (RASK) was +9.6 per cent higher year on year; ticket RASK
+17.4 per cent.
▶ Load factor recovered to an average of 92.6 per cent (vs 86.9 per cent
in H1 F23 and 95 per cent in H1 F20).
▶ Unit cost (CASK) -12.3 per cent year-on-year; ex-fuel CASK -0.8 per
cent (driven primarily by continued airport delays, a higher volume of past
disruption claims and crew cost).
▶ Total cash balance at €1.8 billion, reflecting larger selling
volumes and strong cash management.
▶ Investment in operational strength delivering significant results:
◦ Improved flight completion rate to 99.2 per cent (vs 98.1 per cent
F23).
◦ Utilisation in H1 increased to 12:18 hours (vs 11:49 in H1 F23);
Q1 to 11:58 hours and Q2 to 12:37 hours (vs 11:50 in Q2 F23).
▶ Sustained robust demand environment throughout the period.
▶ On track to take delivery of 21 Airbus 321neo aircraft by end of F24
in line with projections for the year.
▶ Currently extending 13 CEO leases (including 4x A321s - 230 seats)
with seven already completed and six in documentation stage.
▶ Based on a service bulletin in relation to GTF engine inspections
(issued 3 November, 2023), and verification performed with Pratt &
Whitney, we are projecting a grounding of 45 aircraft by the end of F24
(including aircraft previously grounded in September '23 and from mid-January
'24). Overall impact to ASK capacity for H2 F24 expected to be c.20 per cent
higher YoY (Q3 c.25 per cent, Q4 c.15 per cent). Near and longer-term
operational and financial impact is mitigated by management actions and OEM
compensation that has now been secured.
▶ Suspended Israel capacity until end of November '23 (redeploying it
across the network), while observing security situation and maintaining a plan
to redeploy capacity should things improve (in H1 F24 ASK capacity to/from
Israel amounted to 5 - 6 per cent of total capacity).
József Váradi, Wizz Air Chief Executive, commented on business developments in the period:
"This summer we delivered significantly improved operational performance
compared to last year. There were fewer flight cancellations, and overall
fleet utilisation and productivity increased year on year. Our revenue and
profit results reflect the higher volumes we now operate and the enormous
amount of work and investment over the past three years.
In the first half, we saw very strong load factor recovery, as demand remained
robust, including in new markets that are maturing steadily and where we
continue to add frequencies and improve our schedule. The Middle East route
network is tracking a similar maturity profile to the development of our CEE
network, supporting our decision to continue to invest in, add to and evolve
capacity there. Our wider fleet allocation programme remains active, and in
addition to our expanded flying programme this winter, we have announced a
summer 2024 expansion to Romania, Italy and Albania, operating new A321neo
aircraft.
The security of our Airbus order book continues to be the backbone of our
planned capacity growth and fleet renewal programme. The initial GTF powder
metal engine inspection requirements had minimal impact on our operational
capacity, and we are taking measures to mitigate the impact of further
inspections, including higher utilisation from our existing fleet, aircraft
lease extensions and continued new aircraft deliveries.
With respect to sustainability in our operations, we continue to make good
progress, and we have made direct investments in new start-ups and signed a
number of off-take agreements with SAF producers, thus securing a portion of
our supply in the years to come."
On current trading and the outlook, Mr Váradi said:
"We continue to see positive bookings in Q3, with selling load factors
exceeding last year's levels by single digit percentage points. We estimate
overall H2 ASK capacity will be circa 20 per cent higher year on year, despite
the number of GTF engines needing off-wing inspection in the period. This
figure still represents industry-leading capacity growth and is a further
testament to the Company's ability to overcome adverse external factors.
Our plans to grow capacity next year are based on: combination of new aircraft
deliveries, existing fleet lease extensions, securing additional aircraft
capacity from the market and delivering improved utilisation. Based on current
best knowledge we anticipate capacity for F25 to be at similar levels to F24.
We have secured a comprehensive compensation support package from the OEM that
will protect the Company's commercial and operational performance in the
coming quarters, protecting us from the costs of grounding any aircraft while
our GTF engines undergo inspections.
Most of the financial impact from GTF removals will be mitigated by timely OEM
compensation, while higher yield opportunities in our commercial programme
will help protect revenue as market capacity remains constrained. We are
narrowing our F24 net income guidance, initially set in June 2023, to a range
of EUR 350-400 million. This guidance reflects our expectations for H2 F24 in
the context of the ongoing macro environment uncertainty and continuing
difficult operating conditions, from an infrastructure and security
perspective.
We remain well protected against volatile fuel costs and FX movements via a
systematic hedging programme, and our strengthened operations and a renewing
fleet (tracking at 57 per cent at the end of September '23) continue to
deliver efficiencies for the business while reducing unit costs.
Our continued ability to manage the impact of complicated issues gives us the
confidence that Wizz Air has the strategy and expertise to achieve our
profitable growth ambitions."
NEAR-TERM AND FULL-YEAR OUTLOOK
▶ Capacity (ASKs): H2 F24 c.20 per cent higher YoY (Q3 c.25 per cent, Q4
c.15 per cent).
▶ Load factor: F24 above 90 per cent.
▶ Cost: F24 ex-fuel CASK lower versus the prior year.
▶ Financial performance: narrow F24 net income outlook to the range of
€350-400 million.
▶ Above guidance remains subject to any adverse external events
(including macro, security, infrastructure and/or supply chain developments),
revenue performance, for which company has limited visibility at this point in
time, especially for Q4 period, as well as any airworthiness directive in
relation to GTF engine inspections and number of available spare engines.
REVENUE AND COST HIGHLIGHTS H1
Total revenue amounted to €3,052.3 million, an increase of 39.1 per cent
versus H1 F23:
▶ Passenger ticket revenue(1) increased by 49.1 per cent to €1,762.2
million.
▶ Ancillary revenue(1) increased by 27.5 per cent to €1,290.1 million.
▶ Total unit revenue increased by 9.6 per cent to 4.91 Euro cents per
available seat kilometre (ASK).
▶ Ticket revenue per passenger increased by 19.7 per cent to €53.4 and
was also up by 23.8 per cent versus H1 F20. Ticket RASK improved by 17.4 per
cent to 2.83 Euro cents year-on-year, supported by strong pricing momentum in
the period.
▶ Ancillary revenue per passenger increased by 2.4 per cent to €39.1
and was also up by 21.3 per cent versus H1 F20. Ancillary RASK stayed flat
year-on-year at 2.07 Euro cents as more focus went to ticket pricing in the
period, while ancillaries continued to be attractively priced to drive the
demand.
Total operating costs increased 12.0 per cent to €2,529.3 million versus H1
F23:
▶ Total unit costs (including net financing expense) decreased by 12.3
per cent to 4.15 Euro cents per ASK.
▶ Ex-fuel unit costs decreased by 0.8 per cent to 2.60 Euro cents per
ASK, mainly driven by higher than expected flight disruption and compensation
charges and higher crew cost reflecting pay adjustments made since summer of
2022.
▶ Fuel unit costs decreased by 26.5 per cent to 1.55 Euro cents per ASK.
Total cash increased by 20.2 per cent to €1,837.8 million from €1,529.0
million.
The unrealised foreign currency losses in H1 amounted to €14.3 million (H1
F23: €285.2 million), this favorable change from last year is largely
attributed to the slower depreciation of the EUR against the USD, leading to a
more favorable revaluation of our USD lease liabilities on the balance sheet.
(1) For further definition of non-financial measures presented refer
to "Glossary of terms and alternative performance measures (APMS)" section of
this document.
NETWORK UPDATES
▶ Wizz Air announced significant growth in the Polish market during the
period, adding an eleventh aircraft to its Warsaw base and further expanding
the route network from other Polish bases.
▶ Wizz Air Abu Dhabi is growing the fleet this winter and is adding two
more aircraft, taking the fleet to eleven in total, which is one extra
aircraft compared to its initial plans.
▶ Bucharest, Romania, will grow in size as largest base in the network
with addition of two A321neo from June 2024.
▶ Tirana, Albania, will receive two additional A321neo aircraft from
next summer, adding two new routes and growing the number of frequencies on
existing routes.
▶ Next summer, Italian bases in Rome and Milan will see the largest
schedule deployed to date with the addition of four new A321neo aircraft, with
three going to Rome and one to Milan. The expansion will support six new
routes and grow frequencies on 17 existing routes.
▶ During the period, Wizz Air also announced that its entire fleet of
aircraft at London Luton Airport will be comprised of Airbus A321neos by 2025.
Base aircraft additions
▶ Catania, Italy: one additional aircraft, taking the base to four
aircraft.
▶ Tirana, Albania: three additional aircraft, taking the base to
thirteen aircraft.
▶ Warsaw, Poland: one additional aircraft, taking the base to eleven
aircraft.
▶ Belgrade, Serbia: one additional aircraft, taking the base to four
aircraft.
▶ Skopje, N. Macedonia: one additional aircraft, taking the base to six
aircraft.
▶ London Luton, United Kingdom: one additional aircraft, taking the base
to twelve aircraft.
▶ Bucharest, Romania: two additional aircraft, taking the base to
nineteen aircraft.
▶ Rome, Fiumicino: three additional aircraft, taking the base to
fourteen aircraft.
▶ Milan, Malpensa: one additional aircraft, taking the base to eight
aircraft.
▶ Abu Dhabi, UAE: two additional aircraft, taking the base to eleven
aircraft.
Base aircraft reductions
▶ Tuzla, Bosnia and Herzegovina: two aircraft
▶ Suceava, Romania: two aircraft
FLEET UPDATE
▶ In the six months ended 30 September 2023 Wizz Air took delivery of 18
new A321neo aircraft, and 10 A320ceo aircraft were redelivered, thus ending
the first half with a total fleet of 187 aircraft: 40x A320ceo, 41x A321ceo,
6x A320neo and 100x A321neo.
▶ Four of the aircraft delivered were financed through Japanese
Operating Leases with Call Options (JOLCO) and the rest through sale and
leaseback transactions.
▶ Wizz Air is extending thirteen leases, of which seven have been signed
and the other six are in the documentation stage. The lease extensions range
between two and four years and have been secured at discounted or original
lease rates.
▶ The average age of the fleet currently stands at 4.20 years, and
remains one of the youngest fleets of any major European airline, while the
average number of seats per aircraft has climbed to 223 as at September 2023.
▶ The share of new "neo" technology aircraft within Wizz Air's fleet
increased to 57 per cent and is planned to reach 63 per cent by the end of
F24.
▶ In the remainder of F24 we expect 21 new A321neo aircraft deliveries,
while four A320ceo aircraft will be redelivered to lessors and will exit the
fleet. We expect minimal impact from Airbus delivery delays in F25 and F26.
▶ As at 30 September 2023, Wizz Air's delivery backlog comprises a firm
order for 13x A320neo, 287x A321neo and 47x A321XLR aircraft, a total of 347
aircraft.
▶ The table below provides expected number of aircraft for the current
and next fiscal years, including current extensions:
March 2024 March 2025 March 2026
Planned Planned Planned
A320ceo (180/186 seats) (7x extension) 35 27 17
A320neo (186 seats) 6 6 9
A321ceo (230 seats) 41 37 25
A321neo (239 seats) 121 162 219
A321neo XLR (239 seats) - 2 11
Fleet size (with finalised extensions) 203 234 281
A320ceo (180/186 seats) (2x extension) doc stage 1 2 2
A321ceo (230 seats) (4x extension) doc stage - 4 4
Fleet size (after extension) 204 240 287
▶ Based on a service bulletin (issued 3 November, 2023) and verification performed with Pratt & Whitney, we are projecting a grounding of 45 aircraft at the end of F24 (including aircraft grounded in September '23) in order to administer mandatory GTF engine inspections. The so called 'Second Batch Engines' are expected to be removed from middle of January '24, subject to regulator's airworthiness directive. The final number of aircraft impacted by the inspections at the end of F24, and periods beyond, depends on utilization of engines (cycle count), number of spare engines available and MRO induction slots schedule. Near and longer-term operational and financial impact is mitigated by management action and OEM compensation that has now been secured.
FINANCIAL UPDATE
▶ Fitch Ratings has affirmed Wizz Air Holdings Plc's long-term issuer default rating and senior unsecured rating at 'BBB-.
▶ As of 6 November, 2023, using jet fuel zero-cost collars, Wizz Air has accumulated hedge coverage of 70 per cent of its jet fuel needs for F24 at a price of 811/931 $/mT. For F25 the coverage is 38 per cent at the price of 747/854 $/mT. The jet fuel-related EUR/USD FX coverage stands at 69 per cent for F24 at 1.0686/1.1114, while the coverage for F25 stands at 32 per cent at 1.0931/1.1369 rates.
▶ The initial €500 million bond, issued under the €3 billion EMTN programme, matures in January 2024 and will be repaid from cash.
▶ The outstanding balance on the PDP facility at the end of September 2023 stands at €117.9 million. The facility is paid down automatically with new aircraft deliveries. The facility has been extended to enable additional draw-downs, with the objective of maximizing capacity utilization throughout the F24-F25 period.
▶ Net debt(1) at the end of 30 September 2023 was flat at €3,889.5 million vs €3,892.8 million at the end of 31 March 2023, while the Company's leverage ratio(1) (net debt to EBITDA) decreased from the F23 year-end 29.0x to 4.9x. Over the same period, liquidity(1) reduced to c.36 per cent.
▶ The Pratt & Whitney engine support package includes multiple benefits for the Company, including compensation for impacted aircraft. An element of this compensation, which was not material, relates to costs incurred in the period ended 30 September 2023. These credits are included in net other expense in the condensed consolidated interim statement of comprehensive income.
(1) For further definition of non-financial measures presented refer to "Glossary of terms and alternative performance measures (APMS)" section of this document.
SUSTAINABILITY UPDATE
Wizz Air's CO(2) emissions amounted to 51.6 grams per passenger/km for the
rolling twelve months to 30 September 2023 (4 per cent improvement compared to
the F23 average which was 53.8 grams, and 9.6 per cent lower than H1 F23
results a year ago, 57.1 grams per passenger/km), continuing the decreasing
trend in the Company's average carbon intensity performance in a twelve-month
period. The most important sustainability developments during the six months
ended September 2023 were:
Month Project Description
April 2023 Cepsa - SAF partnership Memorandum of Understanding (MoU) with Cepsa, a leading international company
committed to sustainable mobility and energy, for the supply of SAF from 2025
onwards.
April 2023 First equity investment in sustainable aviation fuel R&D The airline announced a £5 million investment in a biofuel company, Firefly,
marking its first equity investment in sustainable aviation fuel research and
development.
May 2023 CleanJoule CleanJoule, a green-tech startup focused on the production of SAF, announced a
US$50 million investment via a consortium led by the principals of Indigo
Partners, a US-based private equity firm, and GenZero, a
decarbonisation-focused investment platform company of Temasek based in
Singapore. As part of the consortium's investment, Frontier Airlines, Wizz Air
and Volaris have signed binding agreements to purchase up to 90 million
gallons of SAF.
June 2023 World Finance Awards 2023 Wizz Air was named the Most Sustainable Low-Cost Airline for the third
consecutive year at the World Finance Sustainability Awards 2023.
July 2023 First fully electric turnaround in Rome Fiumicino Wizz Air celebrated the arrival of its eleventh Airbus A321neo aircraft at its
Rome Fiumicino base with a fully electric turnaround - the first one for the
airline. Aviation Services used all-electric baggage tractors and belt
loaders, passenger stairs, ground power unit and a towbarless pushback. The
electric turnaround allowed Wizz Air to reduce carbon emissions from the
ground handling process by 85 per cent compared to using diesel-powered
equipment.
September 2023 ReFuelEU Aviation Regulation Wizz Air supports the ReFuelEU Aviation Regulation, recently adopted by the
European Parliament. The regulation establishes minimum shares of SAF to be
blended with conventional aviation fuel which are binding. Wizz Air has
established its SAF strategy, which includes securing offtake agreements with
suppliers for the future and has already signed agreements with Mabanaft/P2X
Europe, OMV, Neste and Cepsa.
September 2023 Wizz Sustainability Ambassador Programme Wizz Air launched its new, and first of its kind, Wizz Sustainability
Ambassador Programme. Among over 7,000 of Wizz Air's cabin crew and office
employees, 24 Sustainability Ambassadors have been selected, representing 22
bases and two offices across Albania, Austria, Bulgaria, Cyprus, Georgia,
Hungary, Italy, Malta, North Macedonia, Poland, Romania, the UAE and the UK.
The Wizz Sustainability Ambassadors will support local sustainability projects
at the airline's bases and offices.
OTHER DEVELOPMENTS
▶ In July Ms Phit Lian Chong joined the Board of the Company as an independent Non-Executive Director. A citizen of Singapore, Ms Chong has held multiple senior roles in aviation, travel and logistics, including as a CEO of low-cost carriers Jetstar Asia Airways and ValuAir from 2006 to 2012.
▶ At the Annual General Meeting of Shareholders held on 2 August 2023 Shareholders approved all resolutions with the voting participation rate reaching 86 per cent. On the same date Shareholders also approved a resolution to purchase an additional 75 A321neo aircraft with delivery dates in 2028-2029.
▶ Wizz Air launched Wizz Discount Club Light, a new loyalty programme that offers exclusive in-flight discounts.
▶ Wizz Air Hungary's cabin crew training organisation, which provides initial cabin crew training, obtained approval from the Ministry of Construction and Transport in Hungary to issue cabin crew attestation. Wizz Air is the first airline in the country whose training organisation can issue this type of international document on behalf of the Hungarian Civil Aviation Authority. This document will also be valid in all EU countries.
▶ Wizz Air was awarded as Global Environmental Sustainability Airline Group of the Year for the second consecutive year at CAPA Asia Aviation Summit in Kuala Lumpur.
ABOUT WIZZ AIR
Wizz Air, the fastest growing European ultra-low-cost airline, operates a
fleet of 191 Airbus A320 and A321 aircraft. A team of dedicated aviation
professionals delivers superior service and very low fares, making Wizz Air
the preferred choice of 51.1 million passengers in the financial year F23
ended 31 March 2023. Wizz Air is listed on the London Stock Exchange under the
ticker WIZZ. The Company was recently named one of the world's top ten safest
airlines by airlineratings.com, the world's only safety and product rating
agency, and named Airline of the Year by the Air Transport Awards in 2019 and
in 2023. Wizz Air has also been recognised as the Most Sustainable Low-Cost
Airline by the World Finance Sustainability Awards in 2021-2023 and as
'Airline Group of the Year for Global Environmental Sustainability' by
CAPA-Centre for Aviation Awards for Excellence in 2022-2023.
For more information:
Investors: Zlatko Custovic, Wizz Air +36 1 777 9407
Media: Tamara Vallois, Wizz Air +36 1 777 9324
James McFarlane/Eleni Menikou/Charles Hirst +44 (0) 20 3128 8100
H1 financial review
In the first half of the financial year, Wizz Air carried 33.0 million
passengers, a 24.6 per cent increase compared to the same period in the
previous year, and generated revenues of €3,052.3 million, 39.1 per cent
higher than last period. These rates compare to capacity increase measured in
terms of ASKs of 27.0 per cent and 16.9 per cent more seats. The load factor
increased by 6.6 per cent to 92.6 per cent.
The profit for the first half was €400.7 million, compared to a loss of
€384.3 million in the same period of F23.
Summary condensed consolidated interim statement of comprehensive income (unaudited)
For the six months ended 30 September
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million Change
Passenger ticket revenue * 1,762.2 1,182.1 49 %
Ancillary revenue * 1,290.1 1,011.7 28 %
Total revenue 3,052.3 2,193.8 39 %
Staff costs (250.5) (180.3) 39 %
Fuel costs (966.4) (1,032.7) (6) %
Distribution and marketing (64.9) (46.2) 40 %
Maintenance, materials and repairs (150.9) (115.5) 31 %
Airport, handling and en-route charges (631.9) (503.5) 26 %
Depreciation and amortisation (355.2) (281.6) 26 %
Net other expenses (109.5) (97.9) 12 %
Total operating expenses (2,529.3) (2,257.6) 12 %
Operating profit/(loss) 522.9 (63.8) (920) %
Financial income 39.0 3.1 1158 %
Financial expenses (92.0) (59.8) 54 %
Net foreign exchange loss (19.7) (269.2) (93) %
Net financing expense (72.7) (325.9) (78) %
Profit/(loss) before income tax 450.2 (389.7) (216) %
Income tax (expense)/credit (49.5) 5.4 (1,017) %
Profit/(loss) for the period 400.7 (384.3) (204) %
Profit/(loss) for the period attributable to:
Non-controlling interest (4.4) (9.5) (54) %
Owners of Wizz Air Holdings Plc 405.1 (374.8) (208) %
* This is an APM and subsequently explained in Note 7 (#Section65) .
Revenue
Passenger ticket revenue increased by 49.1 per cent to €1,762.2 million and
ancillary revenue (or "non-ticket" revenue) increased by 27.5 per cent to
€1,290.1 million, driven by strong demand for air travel in H1 F24. Total
revenue per ASKs (RASK) increased by 9.6 per cent to 4.91 Euro cents from 4.48
Euro cents, driven by a 6.6 per cent higher load factor and a significantly
increased net fare (total net revenue per passengers).
Average revenue per passenger (net fare) was €92.6 during H1 F24, an
increase of 11.7 per cent versus H1 F23. Average ticket revenue per passenger
increased from €44.6 in H1 F23 to €53.4 in H1 F24, €8.8 or 19.7 per cent
higher than last year, while average ancillary revenue per passenger increased
from €38.2 in H1 F23 to €39.1 in H1 F24, an increase of €0.9 or 2.4 per
cent.
Operating expenses
Operating expenses for H1 F24 increased by 12.0 per cent to €2,529.3 million
from €2,257.6 million in H1 F23. Key drivers being higher airport and
handling costs and en-route charges driven by the increased capacity (27.0 per
cent increase in ASKs), increased crew-related salary costs mainly driven by
the salary adjustments, higher compensation costs in absolute terms due to the
overall growth of the Company. Favorable impact on fuel costs on the back of
the materially lower fuel prices explained below. The total cost per ASKs
(CASK) (including impact of hedges) decreased by 12.3 per cent to 4.15 Euro
cents in H1 F24 from 4.73 Euro cents in H1 F23. CASK excluding fuel expenses
decreased by 0.8 per cent to 2.60 Euro cents in H1 F24 compared to 2.62 Euro
cents in H1 F23.
Staff costs increased by 38.9 per cent to €250.5 million in H1 F23, up from €180.3 million in H1 F23, reflecting the increase in capacity and the cost-of-living adjustments to salaries year on year.
Fuel expenses decreased by 6.4 per cent to €966.4 million in H1 F24, from €1,032.7 million in the same period of F23. Capacity (in ASK term) increased by 27.0 per cent, but the favorable price improvement exceeded the negative capacity impact in absolute terms. The average fuel price (including hedge impact) paid by Wizz Air during H1 F24 decreased by $200 (per metric tonne) compared to the same period of F23. On the top of that the consumption efficiency also improved due to the increase of NEO fleet.
Distribution and marketing costs increased by 40.5 per cent to €64.9 million from €46.2 million in the first half of F23, in line with the increase in capacity, growing load factor and strong pricing environment.
Maintenance, materials and repair costs increased by 30.6 per cent to €150.9 million in H1 F24 from €115.5 million in H1 F23, due to a larger fleet and greater number of maintenance events.
Airport, handling and en-route charges increased to €631.9 million in the first half of F24 versus €503.5 million in the same period of F23. The increase is in line with the Company's growth factor YoY in terms of ASK.
Depreciation and amortisation charges were 26.1 per cent higher at €355.2 million in the first half, up from €281.6 million in the same period in F23. The increase is related to depreciation on the growing fleet and higher aircraft utilisation.
Net other expense amounted to €109.5 million in H1 F24, compared to €97.9 million in the same period in F23. Key drivers being: flight disruption-related expenses increased to €109.4 million in H1 F24 from €89.6 million in H1 F23 due to capacity increase, overheads-related expenses increased to €42.5 million in H1 F24 from €25.5 million in H1 F23 and net other income increased to €35.2 million in H1 F24 from €6.9 million in H1 F23.
Financial income amounted to €39.0 million in the first half compared to €3.1 million in the same period in F23, driven by the increase in short-term cash deposits and higher interest rate environment in H1 F24.
Financial expenses amounted to €92.0 million in the first half compared to €59.8 million in the same period in F23. Financial expenses predominantly arise from interest charges related to lease liabilities under IFRS 16 connected to the fleet size increase and the higher interest rate environment.
Net foreign exchange loss was €19.7 million in the first half compared to a loss of €269.2 million in the same period in F23, mainly caused by slower depreciation of Euro against the US Dollar in H1 F24 (-3%) in comparison to H1 F23 (-12%) over the course of one year. This resulted in lower unrealised foreign exchange loss on the revaluation of US Dollar denominated lease liabilities. Note: the Euro exchange rate deterioration versus US Dollar was extremely high in H1 F23 following the outbreak of the Ukraine-Russia war.
Taxation
The Group recorded an income tax charge of €49.5 million in the period
compared to an income tax credit of €5.4 million in the same period in F23.
The increase in tax charge is mainly attributable to the positive income of
the period compared to a loss position in the prior period.
Second quarter performance
In the three months to 30 September 2023 ("Q2" or "the second quarter"), Wizz
Air carried 17.7 million passengers including no-shows, a 23.9 per cent
increase compared to the same period in the previous year, and generated
revenues of €1,815.7 million with capacity increased in terms of ASKs by
27.4 per cent. The load factor increased from 88.8 per cent to 93.8 per cent.
The profit for the second quarter was €339.6 million, compared to a profit
of €68.2 million in the same period of F23.
Other information
1. Cash
Total cash (including restricted cash and cash deposits with more than three
months' maturity) at the end of the first half increased by 20.2 per cent to
€1,837.8 million versus 31 March 2023, of which €1,732.8 million is
non-restricted cash.
2. Ownership and control
To protect the EU airline operating license of Wizz Air Hungary Ltd and Wizz
Air Malta Ltd (subsidiaries of the Company), the Board has resolved to
continue to apply a disenfranchisement of Ordinary Shares held by non-EEA
Shareholders in the capital of the Company. This will continue to be done on
the basis of a "Permitted Maximum" of 45 per cent pursuant to the Company's
articles of association ("the Permitted Maximum"). In preparation for the 2023
Annual General Meeting (AGM), on 2 August 2023 the Company sent a Restricted
Share Notice to Non-Qualifying registered Shareholders, informing them of the
number of Ordinary Shares that will be treated as Restricted Shares:
▶ a "Qualifying National" includes: (i) EEA nationals, (ii) nationals of
Switzerland and (iii) in respect of any undertaking, an undertaking which
satisfies the conditions as to nationality of ownership and control of
undertakings granted an operating licence contained in Article 4(f) of
Regulation (EC) No. 1008/2008 of the European Commission, as such conditions
may be amended, varied, supplemented or replaced from time to time, or as
provided for in any agreement between the EU and any third country (whether or
not such undertaking is itself granted an operating licence); and
▶ a "Non-Qualifying National" includes any person who is not a
Qualifying National in accordance with the definition above.
3. Hedging position
Wizz Air operates under a clear set of treasury policies approved by the Board
and supervised by the Audit and Risk Committee. The hedges under the hedge
policy will be rolled forward quarterly, 18 months out, with coverage levels
over time reaching indicatively between 65 per cent for the first quarter of
the hedging horizon and 15 per cent for the last quarter of the hedging
horizon. The hedging policy covers jet fuel and jet fuel-related EUR/USD
exposure. Jet fuel hedge coverages at 30 September 2023 are as follows
assuming no impact of PW engine recalls:
Jet fuel hedge coverage
F24 F25
Period covered 6 months 12 months
Exposure in metric tonnes ('000) 945 2,131
Coverage in metric tonnes ('000) 582 479
Hedge coverage for the period 62% 22%
Coverage by hedge types:
Zero-cost collars in metric tonnes ('000) 582 479
Weighted average ceiling $ 936.0 $ 845.0
Weighted average floor $ 816.0 $ 743.0
Foreign exchange hedge coverage
F24 F25
Period covered 6 months 12 months
Exposure in USD millions 905 1,845
Coverage in USD millions 428 405
Hedge coverage for the period 47% 22%
Coverage by hedge types:
Zero-cost collars in USD millions 428 405
Weighted average ceiling $ 1.1139 $ 1.1413
Weighted average floor $ 1.0709 $ 1.0975
Sensitivities
Pre-hedging, a $10 (per metric tonne) movement in the price of jet fuel will
impact the H2 F24 fuel costs by $9.4 million.
A one cent movement in the EUR/USD exchange rate impacts the H2 F24 operating
expenses by €14.3 million.
Key statistics
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022 Change
Capacity
Number of aircraft at end of period 187 168 11.3 %
Equivalent aircraft 181.9 156.3 16.4 %
Utilisation (block hours per aircraft per day) 12.30 11.82 4.1 %
Total block hours 409,595 338,125 21.1 %
Total flight hours 357,047 293,928 21.5 %
Revenue departures 160,725 141,108 13.9 %
Average departures per day per aircraft 4.83 4.93 (2.0) %
Seat capacity 35,625,271 30,485,203 16.9 %
Average aircraft stage length (km) 1,746 1,607 8.6 %
Total ASKs ('000 km) 62,192,609 48,976,909 27.0 %
Operating data
RPKs ('000 km) 57,590,890 43,219,485 33.3 %
Load factor % 92.6 % 86.9 % 6.6 %
Passengers carried 32,979,806 26,476,899 24.6 %
Fuel price (average US$ per tonne, including hedge and IPP) 974.5 1,279.4 (23.8) %
Foreign exchange rate (average US$/€, including hedge impact) 1.089 1.033 5.4 %
Cost per available seat kilometers
Six months ended 30 Sep 2023 Euro cents Six months ended 30 Sep 2022 Euro cents Change
Euro cents
Fuel costs 1.55 2.11 (26.5) %
Staff costs 0.40 0.37 8.1 %
Distribution and marketing 0.10 0.09 11.1 %
Maintenance, materials and repairs 0.24 0.24 - %
Airport, handling and en-route charges 1.02 1.03 (1.0) %
Depreciation and amortisation 0.57 0.57 - %
Net other expenses 0.18 0.20 (10.0) %
Net financial expenses 0.09 0.12 (25.0) %
Total CASK 4.15 4.73 (12.3) %
Total ex-fuel CASK 2.60 2.62 (0.8) %
The Company has a policy of rounding each amount and percentage individually
from the fully accurate number to the figure disclosed in the condensed
consolidated interim financial statements. As a result, some amounts and
percentages do not total - though such differences are all trivial.
Forward-looking statements
The information in this announcement includes forward-looking statements which
are based on the Company's or, as appropriate, the Company's Directors'
current expectations and projections about future events. These
forward-looking statements may be identified by the use of forward-looking
terminology including, but not limited to, the terms "believes", "estimates",
"plans", "projects", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or comparable
terminology, or by discussion of strategy, plans, objectives, goals, future
events or intentions. These forward-looking statements are subject to risks,
uncertainties and assumptions about the Company and its subsidiaries and
investments, including, among other things, the development of its business,
trends in its operating industry and future capital expenditures. In light
of these risks, uncertainties and assumptions, the events or circumstances
referred to in the forward-looking statements may differ materially from
those indicated in these statements. Forward-looking statements may, and often
do, materially differ from actual results.
None of the future projections, expectations, estimates or prospects or any
other statements contained in this announcement should be taken as forecasts
or promises nor should they be taken as implying any indication, assurance or
guarantee that the assumptions on which such future projections, expectations,
estimates or prospects have been prepared are correct or exhaustive or, in the
case of the assumptions, fully stated in the announcement. Forward-looking
statements speak only as of the date of this announcement. Subject to
obligations under the Listing Rules and Disclosure and Transparency Rules made
by the Financial Conduct Authority under Part VI of the Financial Services and
Markets Act 2000 (as amended from time to time), neither the Company nor any
of its affiliates, or individuals acting on its behalf, undertakes to publicly
update or revise any such forward-looking statement, or any other statements
contained in this announcement, whether as a result of new information, future
events or otherwise.
As a result of these risks, uncertainties and assumptions, one should not
place undue reliance on these forward-looking statements as a prediction of
actual results or otherwise. The information and opinions contained in this
announcement are provided as at the date of this announcement and are subject
to change without notice.
Emerging and principal risks and uncertainties
The aviation industry is subject to many risks and Wizz Air's business is no
exception. A number of risks, as described in our 2023 Annual Report and
Accounts, have the potential to adversely affect Wizz Air's expected results
for the remainder of the current financial year, as well as newly emerging
risks that we have included into our summary. These include external factors
related to conflicts between countries such as prolonged war between Russia
and Ukraine and the renewed Israeli-Palestinian armed conflict, as well as
fleet development-related difficulties like the unplanned maintenance of Pratt
& Whitney GTF engines.
The full list of risks considered is set out below:
▶ information technology and cyber risk, including website availability,
protection of our own and our customers' data, and ensuring the availability
of operations-critical systems in a significantly escalating threat landscape;
▶ external factors, ensuring the Company has capabilities and resilience
to deal with risks such as geopolitical risks (including the ongoing war
between Ukraine and Russia, and the renewed Israeli-Palestinian armed
conflict), fuel cost, foreign exchange rates, risk of higher cost of doing
business, competition, general economic trends, and the default of a partner
financial institution;
▶ network development, making sure that we are making the best use of
our capacity, driving maximum utilisation and ensuring that we have access to
the right airport infrastructure at the right price so that we can keep on
delivering the superior Wizz Air service at low fares across an expanding
network;
▶ fleet development, ensuring the Company has the right number of
aircraft and engines available at the right time to take advantage of
commercial opportunities and grow in a disciplined way without any supply
chain disruption;
▶ regulatory risk, making sure that we remain compliant with regulations
affecting our business and operations and we remain agile to react to the
changing governmental actions due to slowing economic landscape, ownership and
control, loss of traffic rights, and changing policies due to sustainability
(taxation, etc.);
▶ operations, including safety events and terrorist incidents and
employee and passenger security;
▶ human resources, ensuring we are able to recruit the right quality and
the right number of colleagues to support our ambition to grow and, once
recruited, that they remain engaged and motivated and that the Company has
appropriate succession management in place for key colleagues;
▶ social and governance risks, making sure we operate in accordance with
our core values and our value of integrity, are respected throughout our
business processes and deals, and provide transparency to all our stakeholders
through responsible reporting and disclosure; and
▶ environmental risk, ensuring that we are able to answer the growing
need of environmental protection and consciousness, mitigate the emerging
transition and physical risks and create a sustainable, climate-friendly
service for our customers, at all times respecting the planet.
The Directors consider that the principal risks to the Company's business
during the second half of the financial year remain those summarised above and
set out on pages 86 to 93 of our 2023 Annual Report and Accounts, available at
corporate.wizzair.com.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Condensed consolidated interim statement of comprehensive income
For the six months ended 30 September 2023 (unaudited)
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
Note € million € million
Passenger ticket revenue 6, 7 1,762.2 1,182.1
Ancillary revenue 6, 7 1,290.1 1,011.7
Total revenue 6, 7 3,052.3 2,193.8
Staff costs (250.5) (180.3)
Fuel costs (966.4) (1,032.7)
Distribution and marketing (64.9) (46.2)
Maintenance, materials and repairs (150.9) (115.5)
Airport, handling and en-route charges (631.9) (503.5)
Depreciation and amortisation (355.2) (281.6)
Net other expenses 8 (109.5) (97.9)
Total operating expenses (2,529.3) (2,257.6)
Operating profit/(loss) 522.9 (63.8)
Financial income 9 39.0 3.1
Financial expenses 9 (92.0) (59.8)
Net foreign exchange loss 9 (19.7) (269.2)
Net financing expense 9 (72.7) (325.9)
Profit/(loss) before income tax 450.2 (389.7)
Income tax (expense)/credit 10 (49.5) 5.4
Profit/(loss) for the period 400.7 (384.3)
Profit/(loss) for the period attributable to:
Non-controlling interest (4.4) (9.5)
Owners of Wizz Air Holdings Plc 405.1 (374.8)
Other comprehensive income/(expense) - items that may be subsequently
reclassified to profit or loss:
Change in fair value of cash flow hedging reserve, net of tax 88.2 (125.9)
Cash flow hedging reserve recycled to profit or loss 36.0 (8.7)
Cost of hedging 57.4 (2.9)
Currency translation differences (3.0) (4.9)
Other comprehensive income/(expense) for the period, net of tax 178.6 (142.4)
Total comprehensive income/(expense) for the period 579.3 (526.7)
Total comprehensive income/(expense) for the period attributable to:
Non-controlling interest (5.2) (11.9)
Owners of Wizz Air Holdings Plc 584.6 (514.8)
Basic earnings/(loss) per share (€/share) 11 3.92 (3.63)
Diluted earnings/(loss) per share (€/share) 11 3.18 (3.63)
Condensed consolidated interim statement of financial position
As at 30 September 2023
30 Sep 2023 (unaudited) 31 Mar 2023 (audited)
Note € million € million
ASSETS
Non-current assets
Property, plant and equipment 12 5,064.0 4,666.0
Intangible assets 85.9 76.7
Equity investment 21 4.5 -
Restricted cash 44.8 56.7
Deferred tax assets 18.6 50.6
Trade and other receivables 13 20.4 21.4
Derivative financial instruments 4 10.0 0.2
Total non-current assets 5,248.2 4,871.7
Current assets
Inventories 8 220.4 295.6
Trade and other receivables 13 525.8 390.1
Current tax assets 4.4 3.8
Derivative financial instruments 4 83.0 1.0
Restricted cash 60.2 63.7
Short-term cash deposits 600.5 -
Cash and cash equivalents 1,132.3 1,408.6
Total current assets 2,626.7 2,162.8
Total assets 7,874.9 7,034.4
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital - -
Share premium 381.2 381.2
Reorganisation reserve (193.0) (193.0)
Equity part of convertible debt 8.3 8.3
Cash flow hedging reserve 51.0 (73.2)
Cost of hedging reserve 33.4 (24.0)
Cumulative translation adjustments 1.2 3.3
Retained losses (24.5) (433.6)
Capital and reserves attributable to the owners of Wizz Air Holdings Plc 257.6 (331.0)
Non-controlling interest (32.1) (26.9)
Total equity 225.5 (357.9)
Non-current liabilities
Borrowings 16 4,407.0 4,000.5
Convertible debt 25.5 25.7
Deferred income 17 117.1 103.3
Deferred tax liabilities 12.4 3.2
Derivative financial instruments 4 - 4.2
Trade and other payables 14 57.2 59.1
Provisions for other liabilities and charges 15 95.4 76.3
Total non-current liabilities 4,714.6 4,272.3
Current liabilities
Trade and other payables 14 1,005.8 886.3
Current tax liabilities 21.1 4.1
Borrowings 16 1,189.5 1,275.0
Convertible debt 0.3 0.3
Derivative financial instruments 4 0.2 104.2
Deferred income 17 585.6 770.3
Provisions for other liabilities and charges 15 132.3 79.8
Total current liabilities 2,934.8 3,120.0
Total liabilities 7,649.4 7,392.3
Total equity and liabilities 7,874.9 7,034.4
Condensed consolidated interim statement of changes in equity
For the six months ended 30 September 2023 (unaudited)
Share capital Share Reorganisation Equity Cash flow hedging reserve Cost of hedging reserve Cumulative translation adjustments Retained Total Non-controlling interest Total
€ million premium reserve part of convertible debt € million € million € million earnings € million € million equity
€ million € million € million € million € million
Balance at 1 April 2023 - 381.2 (193.0) 8.3 (73.2) (24.0) 3.3 (433.6) (331.0) (26.9) (357.9)
Comprehensive income
Profit/(loss) for the period - - - - - - - 405.1 405.1 (4.4) 400.7
Other comprehensive income/(expense) - - - - 124.2 57.4 (2.1) - 179.5 (0.8) 178.7
Total comprehensive income/(expense) - - - - 124.2 57.4 (2.1) 405.1 584.6 (5.2) 579.4
Transactions with owners
Share-based payment charge - - - - - - - 4.0 4.0 - 4.0
Total transactions with owners - - - - - - - 4.0 4.0 - 4.0
Balance at 30 September 2023 - 381.2 (193.0) 8.3 51.0 33.4 1.2 (24.5) 257.6 (32.1) 225.5
Condensed consolidated interim statement of changes in equity
For the six months ended 30 September 2022 (unaudited)
Share capital Share Reorganisation Equity Cash flow hedging reserve Cost of hedging reserve Cumulative translation adjustments Retained Total Non-controlling interest Total
€ million premium reserve part of convertible debt € million € million € million earnings € million € million equity
€ million € million € million € million € million
Balance at 1 April 2022 - 381.2 (193.0) 8.3 (3.8) - (0.7) 87.3 279.3 (15.4) 263.9
Comprehensive income
Loss for the period - - - - - - - (374.8) (374.8) (9.5) (384.3)
Other comprehensive expense* - - - - (134.6) (2.9) (2.5) - (140.0) (2.4) (142.4)
Total comprehensive expense - - - - (134.6) (2.9) (2.5) (374.8) (514.8) (11.9) (526.7)
Transactions with owners
Share-based payment charge - - - - - - - 4.2 4.2 - 4.2
Total transactions with owners - - - - - - - 4.2 4.2 - 4.2
Balance at 30 September 2022 - 381.2 (193.0) 8.3 (138.4) (2.9) (3.2) (283.3) (231.3) (27.3) (258.6)
* In the prior period items within other comprehensive income were
presented separately in the condensed consolidated interim statement of
changes in equity. See the details in the condensed consolidated interim
statement of comprehensive income.
Condensed consolidated interim statement of cash flows
For the six months ended 30 September 2023 (unaudited)
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million
Cash flows from operating activities
Gain/(loss) before income tax 450.2 (389.7)
Adjustments for:
Depreciation 346.5 275.3
Amortisation 8.7 6.2
Financial income (39.0) (3.1)
Financial expenses 92.0 59.8
Unrealised fair value (gains)/losses on derivative financial instruments (15.6) 14.1
Unrealised foreign currency losses 14.3 285.2
Realised non-operating foreign currency losses/(gains) 1.1 (25.4)
Gain on sale of property, plant and equipment (45.3) (41.8)
Share-based payment charges 3.9 4.3
Other non-cash income (5.4) -
811.3 184.9
Changes in working capital
Increase in trade and other receivables (137.0) (114.1)
Decrease in restricted cash 18.1 45.5
Increase in derivatives - (6.0)
Decrease/(increase) in inventory 75.2 (57.7)
Increase in provisions 3.5 61.7
Increase in trade and other payables 148.9 300.9
(Decrease)/increase in deferred income (183.7) 62.9
Cash generated by operating activities before tax 736.3 478.2
Income tax paid (10.2) (4.2)
Net cash generated by operating activities 726.1 473.9
Cash flows from investing activities
Payment for acquisition of equity investment (4.5) -
Purchase of aircraft maintenance assets (73.7) (55.2)
Purchases of tangible and intangible assets (155.5) (38.2)
Proceeds from sale of tangible assets 104.2 95.2
Advances paid for aircraft (112.3) (261.9)
Refund of advances paid for aircraft 218.6 284.9
Interest received 32.4 2.4
(Increase)/Decrease in short-term cash deposits (598.0) 84.8
Net cash (used in)/generated by investing activities (588.8) 111.9
Cash flows from financing activities
Proceeds from new loans* 36.6 47.7
Repayment of loans* (279.0) (240.7)
Interest paid - loans - IFRS 16 lease liability (57.5) (43.6)
Interest paid - loans - JOLCO (7.7) (3.6)
Proceeds from secured debt 14.6 -
Repayment of secured debt (143.1) -
Interest paid - secured debt (7.4) -
Interest paid - other (1.6) (1.4)
Net cash used in financing activities (445.1) (241.7)
Net (decrease)/increase in cash and cash equivalents (307.8) 344.2
Cash and cash equivalents at the beginning of the period 1,408.6 766.6
Effect of exchange rate fluctuations on cash and cash equivalents 30.7 18.5
Cash and cash equivalents at the end of the period** 1,131.5 1,129.3
* Mostly JOLCO and IFRS 16 leases.
** Cash and cash equivalents at 30 September 2023 include €274.1
million (€197.3 million at 31 March 2023; €235.6 million at 31 March 2022)
of cash at bank and €858.2 million (€1,211.3 million at 31 March 2023;
€531.0 million at 31 March 2022) of cash deposits maturing within three
months of inception and overdrafts (repayable on demand) of €0.8 million
(€6.0 million at 31 March 2023; €nil at 31 March 2022), which are an
integral part of the Group's cash management activities.
Notes to the condensed consolidated interim financial statements (unaudited)
1. General information
Wizz Air Holdings Plc ("the Company") is a limited liability company
incorporated in Jersey, registered under the address 44 Esplanade, St Helier
JE4 9WG, Jersey. The Company is managed from Switzerland, under the address
Route François-Peyrot 12, 1218 Le Grand-Saconnex, Geneve. The Company and its
subsidiaries (together referred to as "the Group" or "Wizz Air") provide
low-cost, low-fare passenger air transportation services on scheduled
short-haul and medium-haul point-to-point routes across Europe and the Middle
East. The Company's Ordinary Shares are listed in the premium segment of the
Official List of the Financial Conduct Authority and admitted to the Main
Market of the London Stock Exchange.
2. Basis of preparation
These unaudited condensed consolidated interim financial statements present
the financial results of the Group for the six-month period ended 30 September
2023. These condensed consolidated interim financial statements have been
prepared in accordance with the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority, IAS 34, 'Interim Financial Reporting' as
adopted by the European Union and those parts of the Companies (Jersey) Law
1991 applicable to companies reporting under IFRS. The unaudited condensed
consolidated interim financial statements should be read in conjunction with
the annual consolidated financial statements for the year ended 31 March 2023,
which have been prepared in accordance with IFRSs and IFRICs as adopted by the
European Union and with those parts of the Companies (Jersey) Law 1991
applicable to companies reporting under IFRS.
The comparative figures included for the year ended 31 March 2023 do not
constitute statutory financial statements of the Group based on Article 105
(11) of the Companies (Jersey) Law 1991. The consolidated financial statements
of the Group for the year ended 31 March 2023, together with the Independent
Auditors' Report, have been filed with the Jersey Financial Services
Commission and are also available on the Company's website (wizzair.com). The
Independent Auditors' Report on those financial statements was unqualified.
The Company has a policy of rounding each amount and percentage individually
from the fully accurate number to the figure disclosed in the condensed
consolidated interim financial statements. As a result, some amounts and
percentages do not total - though such differences are all trivial.
Going concern
Wizz Air's business activities, financial performance and financial position,
together with external factors and principal risks likely to affect its future
development and performance as described in our 2023 Annual Report and
Accounts, including the plans to finance a growing number of future aircraft
deliveries, where sale and leaseback financing is typically secured shortly
before the scheduled delivery date of the aircraft and our judgment that there
will continue to be demand in the leasing market to finance our aircraft prior
to their delivery dates, have been reviewed by the Directors and are
considered to be unchanged.
At 30 September 2023, the Group held total cash of €1,837.8 million
(including cash and cash equivalents of €1,132.3 million, €105.0 million
of restricted cash and €600.5 million of short-term cash deposits), while
net current liabilities were €308.1 million and net assets were €225.5
million. The Group's contractual undiscounted external borrowings include:
€500.0 million of bonds maturing in January 2024, €500.0 million of bonds
maturing in January 2026, €117.9 million of PDP financing from Carlyle
Aviation Partners that is repayable over twelve months but may be re-borrowed
and convertible debt of €25.8 million. A further €4,457.5 million in
relation to future liabilities from lease, JOLCO and FTL contracts are
presented as borrowings. None of these borrowings contain any financial
covenants.
The Group operates using a three-year planning cycle. The Directors have
reviewed their latest financial forecasts for a period of 18 months from the
date of signing these interim financial statements including plans to finance
committed future aircraft deliveries (see Note 18 (#Section82) ) due within
this period. After making enquiries and testing the assumptions against
different forecast scenarios including a severe but plausible (downside)
scenario (see below), the Directors have satisfied themselves that the Group
is expected to be able to meet its commitments and obligations as they fall
due for a period of at least the next twelve months from the date of signing
this interim report.
These enquiries and the testing performed in reaching this conclusion included
the review of a base case model of how the operations of the business would
develop against a backdrop of persistent inflation, an adverse fuel and
exchange rate environment and continued aircraft delivery delays that have
been notified by Airbus. Notably, as part of this base case, the expected
consequences of the metallurgy inspections announced by Pratt & Whitney
(RTX) and grounding of 45 aircraft, on average, commencing 15 January 2024
and spanning 18 months, have been mitigated by management actions and original
equipment manufacturer ("OEM") compensation that has now been secured. In the
absence of detailed information and instructions from the involved regulatory
organisations and the OEM, the Directors believe this scenario to be a
realistic assumption. This base case was then flexed to produce a downside
forecast that reflects the potential impact of trading scenarios such as a
lower RASK, higher fuel price, stronger USD and exclusion of uncommitted
lease financing for future aircraft deliveries (see Note 18 (#Section82) ).
Both the base and downside forecasts reflect the repayment of €500 million
of bonds in January 2024.
The Directors also considered the impact of climate change over the time
period and concluded that it is unlikely that material physical or transition
risks that are described in our Sustainability Report, on pages 29 to 40 of
the 2023 Annual Report and Accounts, will arise over this period.
In preparing the base and downside forecasts the Directors also considered the
requirements of security levels in its card acquirer contracts and took into
account the impact of the war in Ukraine, the three aircraft stranded in
Ukraine (see Note (#Section60) 5 (#Section60) and Note 12 (#Section73) ) and
the war in Palestine. The Directors concluded that no material adverse impact
on future cash flows is likely to result from these matters.
In this downside scenario the Group is still forecasting significant liquidity
(or access to liquidity) throughout this period. Accordingly, the Directors
concluded it is appropriate to retain the going concern basis of accounting in
preparing the financial statements.
3. Accounting policies
These condensed consolidated interim financial statements have been prepared
in accordance with the accounting policies, methods of computation and
presentation applied in the Group's most recently published consolidated
financial statements for the year ended 31 March 2023, except for the changes
explained below.
The Group's interests in equity investments are presented as financial assets
at fair value through other comprehensive income.
The useful life of aircraft assets that were first leased and then purchased
by the Group is estimated based on the date of the major overhaul events that
are no longer economical to perform. Within the current aircraft fleet the
maximum estimated useful life of A320ceo aircraft is 20 years.
The preparation of condensed consolidated interim financial statements
requires management to make judgments, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
estimates.
In preparing these condensed consolidated interim financial statements the
significant judgments made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the consolidated financial statements for the year ended 31
March 2023, with the exception of changes in estimates that are required in
determining the provision for income taxes. Taxes on income in the interim
periods are accrued using the effective rate that would be applicable to
expected total annual profit or loss.
In preparing the condensed consolidated interim financial statements, the
Directors have considered the impact of climate change, particularly in the
context of the disclosures included in the Strategic Report in the 2023 Annual
Report and Accounts, the stated emission targets and the update provided on
pages 5 and 6 of this Interim Report. These considerations did not have a
material impact on the Group's going concern assessment, nor on the financial
reporting judgments and estimates used in the preparation of these interim
financial statements.
New standards, amendments and interpretations issued and effective
The following amendments and interpretations apply for the first time in the
six months to 30 September 2023, but do not have a material impact, or any
impact (except the for disclosure of gross deferred tax balances in relation
to leases under Amendment to IAS 12, see Note 10), on the condensed
consolidated interim financial statements of the Group:
▶ IFRS 17, 'Insurance Contracts' including Amendments to IFRS 17
▶ Amendments to IFRS 17, 'Insurance Contracts': Initial Application of
IFRS 17 and IFRS 9 - Comparative Information
▶ Amendments to IAS 1, 'Presentation of Financial Statements' and IFRS
Practice Statement 2: Disclosure of Accounting Policies
▶ Amendments to IAS 8, 'Accounting Policies, Changes in Accounting
Estimates and Errors': Definition of Accounting Estimates
▶ Amendments to IAS 12, 'Income Taxes': Deferred Tax Related to Assets
and Liabilities Arising from a Single Transaction
New standards, amendments and interpretations issued but not yet effective
The following new accounting standards and interpretations have been published
by the IASB that are not yet effective and have not been early adopted by the
Group. These standards are either not relevant or not expected to have a
material impact on the Group in the current or future reporting periods or on
foreseeable future transactions.
Endorsed by the EU but not yet effective or not yet endorsed by the EU:
▶ Amendments to IAS 1, 'Presentation of Financial Statements':
Classification of Liabilities as Current or Non-current
▶ Amendments to IAS 1, 'Presentation of Financial Statements':
Non-current Liabilities with Covenants
▶ Amendments to IFRS 16, 'Leases': Lease Liability in a Sale and
Leaseback
▶ Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures: Supplier Finance Arrangements: these amendments
require disclosures to enhance the transparency of supplier finance
arrangements and their effects on a company's liabilities, cash flows and
exposure to liquidity risk. The disclosure requirements are the IASB's
response to investors' concerns that some companies' supplier finance
arrangements are not sufficiently visible, hindering investors' analysis.
▶ Amendments to IAS 21: The Effects of Changes in Foreign Exchange
Rates: Lack of Exchangeability: an entity is impacted by the amendments when
it has a transaction or an operation in a foreign currency that is not
exchangeable into another currency at a measurement date for a specified
purpose. A currency is exchangeable when there is an ability to obtain the
other currency (with a normal administrative delay), and the transaction would
take place through a market or exchange mechanism that creates enforceable
rights and obligations.
Not endorsed by the EU but will become immediately effective once endorsed:
▶ Amendment to IAS 12: International Tax Reform - Pillar Two Model Rules
This amendment gives companies temporary relief from accounting for deferred
taxes arising from the Organization for Economic Co-operation and
Development's (OECD) international tax reform. The amendments also introduce
targeted disclosure requirements for affected companies. For more details
refer to Note 10.
4. Financial risk management
Interest rate benchmarks
As a result of interest rate benchmark reform, many benchmark interest rates
are not published anymore. In connection with floating rate leases, the Group
had exposures to LIBOR rates, which were published until 30 June 2023. This
had no material impact on the H1 F24 condensed consolidated interim financial
statements.
Hedging
In F23 the Company reinstated its Board approved systematic hedging policy
with the following coverage and time horizon.
The hedges under the hedge policy will be rolled forward quarterly, 18 months
out, with coverage levels over time reaching a minimum of 65 per cent for the
first quarter of the hedging horizon and 15 per cent for the last quarter of
the hedging horizon. In line with the hedging policy, Wizz Air also hedges its
US Dollar exposure related to fuel consumption.
Hedge transactions during the period
The Group uses zero-cost collar instruments to hedge its jet fuel-related
foreign exchange exposures and jet fuel price exposures. In order to ensure
economic relationship, the Group enters into hedge relationships where
critical terms of the hedging instrument match exactly with that of the hedged
item.
The gains and losses arising from hedge transactions during the period were as
follows:
Foreign exchange hedge:
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million
Gain recognised within fuel costs
Effective cash flow hedge 0.6 -
Total loss recognised within fuel costs 0.6 -
Fuel hedge:
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million
(Loss)/gain recognised within fuel costs
Effective hedge (loss)/gain transferred into the statement of profit or loss (36.0) 8.7
Total (loss)/gain recognised within fuel costs (36.0) 8.7
Hedge period and open positions
The Group measures its derivative financial instruments at fair value, as
calculated by the banks involved in the hedging transactions. As required, the
fair values ascribed to those instruments are verified also by management
using high-level models. These estimations are performed based on market
prices observed at period end and therefore, according to paragraph 128 of IAS
1, do not require further disclosure. Such fair values might change materially
within the near future but these changes would not arise from assumptions made
by management or other sources of estimation uncertainty at the end of the
period but from the movement of market prices. The fair value calculation is
most sensitive to movements in the jet fuel and foreign currency spot prices,
their implied volatility and respective yields.
At the end of the period the Group had the following open hedge positions:
Foreign exchange hedges with derivatives:
Derivative financial instruments
At 30 September 2023 Notional amount US$ million Non-current Current Non-current Current Net
assets assets liabilities liabilities asset
€ million € million € million € million € million
Effective cash flow hedge positions 833.0 2.9 15.7 - - 18.6
Total foreign exchange hedge 833.0 2.9 15.7 - - 18.6
Derivative financial instruments
At 31 March 2023 Notional amount US$ million Non-current Current Non-current Current Net
assets assets liabilities liabilities liability
€ million € million € million € million € million
Effective cash flow hedge positions 312.0 - - - (0.4) (0.4)
Total foreign exchange hedge 312.0 - - - (0.4) (0.4)
For the movements in other comprehensive income refer to the condensed
consolidated interim statements of changes in equity and comprehensive income.
The open foreign currency cash flow hedge positions at year end can be
analysed according to the maturity periods and price ranges of the underlying
hedge instruments as follows:
EUR/USD foreign exchange hedge:
F24 F25
At 30 September 2023 6 months 12 months
Maturity profile of notional amount (million) $ 428.0 405.0
Weighted average ceiling $ 1.1139 1.1413
Weighted average floor $ 1.0709 1.0975
F24 F25
At 31 March 2023 12 months 6 months
Maturity profile of notional amount (million) $ 312.0 -
Weighted average ceiling $ 1.1154 -
Weighted average floor $ 1.0724 -
Fuel hedge with derivatives:
Derivative financial instruments
At 30 September 2023 '000 Non-current Current Non-current Current Net
metric tonnes assets assets liabilities liabilities asset
€ million € million € million € million € million
Effective cash flow hedge positions 1,061.0 7.1 67.3 - (0.2) 74.2
Total fuel hedge 1,061.0 7.1 67.3 - (0.2) 74.2
Derivative financial instruments
At 31 March 2023 '000 Non-current Current Non-current Current Net
metric tonnes assets assets liabilities liabilities liability
€ million € million € million € million € million
Effective cash flow hedge positions 1,258.5 0.2 1.0 (4.2) (103.8) (106.8)
Total fuel hedge 1,258.5 0.2 1.0 (4.2) (103.8) (106.8)
For the movements in other comprehensive income refer to the condensed
consolidated interim statements of changes in equity and comprehensive income.
The fuel hedge positions at period end can be analysed according to the
maturity periods and price ranges of the underlying hedge instruments as
follows:
F24 F25
At 30 September 2023 6 months 12 months
Maturity profile ('000 metric tonnes) 582.0 479.0
Blended capped rate $ 936.0 $ 845.0
Blended floor rate $ 816.0 $ 743.0
F24 F25
At 31 March 2023 12 months 6 months
Maturity profile ('000 metric tonnes) 1,081.0 177.5
Blended capped rate $ 994.0 $ 884.0
Blended floor rate $ 864.0 $ 767.0
Effects of hedge accounting on the financial position and performance
The effects of the foreign exchange hedges on the Group's financial position
and performance are as follows:
At 30 Sep 2023 At 31 Mar 2023
€ million € million
Zero-cost collars
Carrying amount, net asset/(liability) 18.6
(0.4)
Notional amount 833.0 312.0
Maturity date October 2023- April 2023-
March 2024
January 2025
Hedge ratio 1:1 1:1
Change in fair value of outstanding hedging instruments 14.1 -
Change in value of hedged item used to determine hedge effectiveness (14.1) -
The effects of the fuel hedges on the Group's financial position and
performance are as follows:
At 30 Sep 2023 At 31 Mar 2023
€ million € million
Zero-cost collars
Carrying amount, net asset/(liability) 74.2 (106.8)
Notional amount 1,061.0 1,006.9
Maturity date October 2023- April 2023-
October 2024
January 2025
Hedge ratio 1:1 1:1
Change in fair value of outstanding hedging instruments 45.3 (83.2)
Change in value of hedged item used to determine hedge effectiveness (45.3) 83.2
Hedge effectiveness
The effectiveness of hedges is tested both prospectively and retrospectively
to determine the appropriate accounting treatment of hedge gains and losses.
Prospective testing of open hedges requires making certain estimates, the most
significant one being for the future expected level of the business activity
(primarily the utilisation of fleet capacity) of the Group. Building on these
estimations of the future, management makes a judgment on the accounting
treatment of open hedging instruments. Hedge accounting for jet fuel and
foreign currency cash flow hedges is discontinued where the "highly probable"
forecast criterion is not met in accordance with the requirements of IFRS 9.
There was no discontinued hedging relationship during the six months ended 30
September 2022 or the six months ended 30 September 2023.
None of the hedge counterparties had a material change in their credit status
that would have influenced the effectiveness of the hedging transactions.
Fair value estimation
The Group measures its derivative financial instruments at fair value, as
calculated by the banks involved in the hedging transactions. These
instruments fall into the Level 2 category. Fair values are determined based
on inputs other than quoted prices that are observable for the asset or
liability, either directly or indirectly. The banks are using generally
accepted valuation techniques, principally the Black-Scholes model and
discounted cash flow models. Equity investments are measured at fair value
through profit or loss. All the other financial assets and financial
liabilities of the Group are measured at amortised cost. For the majority of
these instruments, the fair values are not materially different from their
carrying amounts. Fair value of unsecured debt amounted to €935.1 million as
at 30 September 2023 (31 March 2023: €927.1 million) as estimated using
quoted prices (Level 1). Fair value of secured debt amounted to €117.9
million as at 30 September 2023 (31 March 2023: €250.0 million) as estimated
using Level 3 methodology. Fair value of convertible debt amounted to €25.8
million as at 30 September 2023 (31 March 2023: €26.0 million) as estimated
using Level 3 methodology. Fair value of borrowings amounted to €3,729.8
million as at 30 September 2023 (31 March 2023: €3,408.8 million) as
estimated using Level 2 methodology. For the carrying amount of borrowings
please see Note (#Section80) 16 (#Section80) .
The following table presents the Group's financial assets and liabilities that
are measured at fair value at 30 September 2023.
Level 1 Level 2 Level 3 Total
€ million € million € million € million
Assets
Equity investment - - 4.5 4.5
Derivative financial instruments - 93.0 - 93.0
- 93.0 4.5 97.5
Liabilities
Derivative financial instruments - 0.2 - 0.2
- 0.2 - 0.2
The following table presents the Group's financial assets and liabilities that
are measured at fair value at 31 March 2023.
Level 1 Level 2 Level 3 Total
€ million € million € million € million
Assets
Equity investment - - - -
Derivative financial instruments - 1.2 - 1.2
- 1.2 - 1.2
Liabilities
Derivative financial instruments - 108.4 - 108.4
- 108.4 - 108.4
5. Critical estimates and judgments made in applying the Group's accounting policies
For critical estimates and judgments refer to Note 4 in the 2023 Annual Report
and Accounts of the Group. No significant changes to such estimates and
judgments occurred for the six months ended 30 September 2023, except for the
below.
Aircraft in Ukraine
Judgment: In February 2022, the airspace of Ukraine, Russia and Moldova was closed until further notice as a result of the war in Ukraine. Four of Wizz Air's aircraft were stranded in Ukrainian territory, one in Lviv and three in Kyiv.
The aircraft in Lviv, and all six engines of the aircraft in Kyiv were successfully repatriated. After attending airframe structural checks and engine inspections the aircraft and the engines returned to service with no significant extra repair work required.
The airframes remaining in Kyiv are in good condition and with no damage, evidenced by photographic images and local employee information. Maintenance work has been performed to put parking and storage procedures in place. It is assumed that the aircraft can return to the fleet before the summer season in 2024. For more details refer to
Note (#Section73)
12 (#Section73)
.
6. Segment information
Reportable segment information
During F23 and F24 the Group had only one reportable segment, being its entire
route network, resulting in a net profit of €400.7 million during the six
months ended 30 September 2023 (for the six months ended 30 September 2022:
€384.3 million loss). All segment revenue was derived wholly from external
customers and, as the Group had a single reportable segment, inter-segment
revenue was zero.
Entity-wide disclosures
Products and services
Revenue from external customers can be analysed by groups of similar services
as follows:
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million
Passenger ticket revenue 1,762.2 1,182.1
Ancillary revenues 1,290.1 1,011.7
Total segment revenue 3,052.3 2,193.8
These categories are non-IFRS categories meaning that they are not necessarily
distinct from a nature, timing and risk point of view; however, management
believes that these categories provide clarity over the revenue profile of the
Group to the readers of the financial statements and are in line with airline
industry practice. The categories as per the definition of IFRS 15 are
disclosed in Note 7 (#Section65) .
Ancillary revenue arises mainly from baggage charges, booking/payment currency
conversion charges, airport check-in fees, fees for various convenience
services (e.g. priority boarding, extended legroom and reserved seats),
loyalty programme membership fees, commission on the sale of on-board
catering, accommodation, car rental, travel insurance, bus transfers, premium
calls, co-branded cards and repatriation.
Geographic areas
Revenue from external customers can be analysed by geographic areas as
follows:
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million
EU and EFTA countries 2,102.8 1,560.2
UK 349.8 280.1
Other (non-EU) 599.7 353.5
Total revenue from external customers 3,052.3 2,193.8
In the table above, other (non-EU) comprises a number of non-EU geographic
areas that are all individually less than 10 per cent of the total revenue.
Revenue was allocated to geographic areas based on the location of the first
departure airport on each ticket booking.
The Company's revenue from external customers within the EU is mainly
generated by Italy of €384.9 million for the six months ended 30 September
2023 (the six months ended 30 September 2022: €305.7 million), Romania of
€329.8 million (the six months ended 30 September 2022: €236.8 million)
and Poland of €255.0 million (the six months ended 30 September 2022:
€178.9 million).
The physical location of non-current assets is not disclosed by geographic
area. This is because: (i) by value most assets are associated either with
aircraft not yet received (pre-delivery payments) or with existing leased
aircraft and spare engines (RoU and maintenance assets), the location of which
changes regularly following aircraft capacity allocation decisions; and (ii)
the value of the remaining asset categories (land and buildings, and fixtures
and fittings) is not a material part of total non-current assets.
The distribution of the non-current assets between the key operating entities
of the Group is as follows:
30 Sep 2023 31 March 2023
€ million € million
Wizz Air Hungary 2,444.9 2,755.8
Wizz Air UK 480.8 460.1
Wizz Air Fleet Management 568.1 504.9
Wizz Air Malta 1,679.9 1,117.2
Wizz Air Abu Dhabi 71.3 32.5
Other 3.2 1.2
Total non-current assets 5,248.2 4,871.7
No revenue or non-current assets of the Group were recognised in Jersey, the
Company's country of domicile for the six months ended 30 September 2023 (for
the six months ended 30 September 2022: €nil).
Wizz Air Malta Limited and WAM Ventures Holding Limited were successfully
established in 2022 to reinforce Wizz Air's position and support its expansion
plans in Europe. From 1 April 2023, Wizz Air Malta Limited commenced
commercial operations and started to sell tickets for its own flights in
addition to its wet-lease operations.
AOG Jet Limited, a wholly owned subsidiary of the Group, was successfully
established in July 2023.
Major customers
The Group derives the vast majority of its revenues from its passengers and
sells most of its tickets directly to the passengers as final customers rather
than through corporate intermediaries (tour operators, travel agents or
similar).
7. Revenue
The split of total revenue presented in the condensed consolidated interim
statement of comprehensive income, being passenger ticket revenue and
ancillary revenue, is a non-IFRS measure (or alternative performance measure).
The existing presentation is considered relevant for the users of the
financial statements because: (i) it mirrors disclosures presented outside of
the financial statements; and (ii) it is regularly reviewed by the Chief
Operating Decision Maker for evaluating the financial performance of its
single operating segment.
Revenue from contracts with customers can be disaggregated as follows based on
IFRS 15:
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million
Revenue from contracts with passengers 3,012.3 2,159.4
Revenue from contracts with other partners 40.0 34.4
Total revenue from contracts with customers 3,052.3 2,193.8
These two categories represent revenues that are distinct from a nature,
timing and risks point of view. Revenue from contracts with other partners
relates to commissions on the sale of on-board catering, accommodation, car
rental, travel insurance, bus transfers, premium calls and co-branded cards,
where the Group acts as an agent.
The contract assets reported on 30 September 2023 as part of trade and other
receivables amounted to €5.0 million (31 March 2023: €5.9 million) and the
contract liabilities (unearned revenues) reported as part of deferred income
were €576.3 million as at 30 September 2023 (31 March 2023: €761.1
million). Out of the €3,012.3 million revenue recognised for the six months
ended 30 September 2023 (for the six months ended 30 September 2022:
€2,159.4 million), €761.1 million (the six months ended 30 September 2022:
€326.6 million) was included in the contract liability balance at the
beginning of the period.
8. Operating profit/(loss)
Net other expenses
The following charges less gains are included in net other expenses:
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million
Gain on sale and leaseback transactions 45.3 41.8
Flight disruption-related expenses (109.4) (89.6)
Overhead-related expenses (42.5) (25.5)
Crew-related expenses (35.5) (27.3)
Expense relating to short-term leases (2.3) (2.8)
Impairment reversal for receivables - -
Expense relating to variable lease payments (0.4) (1.4)
Net other income 35.2 6.9
Net other expenses (109.5) (97.9)
Overhead-related expenses include fees for legal support, professional
services, consulting and IT-related services.
Net other income is mainly related to credits received from suppliers and to
income and expenses from cargo operations.
Inventories
Inventories totaling €12.9 million were recognised as maintenance materials
and repairs expenses in the period (the six months ended 30 September 2022:
€7.0 million).
Emission Trade Schemes amounted to €185.5 million at 30 September 2023 (31
March 2023: €262.5 million). The decrease is due to the ETS settlement in
April 2023.
9. Net financing expense
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million
Interest income 39.0 3.1
Financial income 39.0 3.1
Interest expenses:
Convertible debt (0.9) (0.9)
IFRS 16 lease liability (57.5) (43.8)
JOLCO and FTL lease liability (16.5) (7.7)
Unsecured debt (6.6) (6.6)
Secured debt (9.3) -
Other (1.2) (0.8)
Financial expenses (92.0) (59.8)
Net foreign exchange loss (19.7) (269.2)
Net financing expense (72.7) (325.9)
Interest income and expense include interest on financial instruments.
Interest income is earned on cash and cash equivalents and short-term
deposits.
Net foreign exchange loss in amount of €52.4 million for the six months
ended 30 September 2023 (the six months ended 30 September 2022: €274.7
million) relates to remeasurement of lease liabilities denominated in
currencies different from EUR, predominantly in USD which is offset by a net
foreign exchange gain of €25.4 million on cash and cash equivalents
denominated in foreign currency. During H1 F24 the USD/EUR exchange rate
decreased from 1.09 USD/EUR at 31 March 2023 to 1.06 USD/EUR at 30 September
2023 which resulted in an increase in lease liability and related recognition
of foreign exchange loss.
10. Income tax expense
The income tax charge for the six months ended 30 September 2023 was €49.5
million (the six months ended 30 September 2022: €5.4 million tax credit).
The increase in tax charge is mainly attributable to the positive income of
the period compared to the loss position in the prior period.
The effective income tax rate for the six months ended 30 September 2023 is
11.0 per cent (the six months ended 30 September 2022: 1.4 per cent). The tax
charge or credit for the period was calculated based on the estimated annual
effective income tax rate of the Group.
Deferred tax positions
Deferred tax assets decreased from €50.6 million to €18.6 million and
deferred tax liabilities increased from €3.2 million to €12.4 million in
the current period (between 31 March and 30 September 2023). The changes in
the deferred tax position are mainly caused by changes in the balances related
to hedging, ETS liability and JOLCO-financed assets, which are sources of
temporary differences.
The amendments of IAS 12 have no material impact on the net deferred tax
balances of the Group, as the exemption for deferred tax recognition in
relation to leases was not applied at initial recognition.
Deferred tax related to leases:
RoU assets Lease liabilities
Deferred tax assets Deferred tax liabilities Deferred tax assets Deferred tax liabilities
€ million € million € million € million
31 March 2022 1.4 (79.8) 81.8 -
31 March 2023 2.6 (154.3) 171.7 -
30 September 2023 1.5 (151.8) 161.3 -
Tax residency change
Wizz Air Hungary Ltd. moved its place of effective management from Switzerland
to Hungary with an effective date of 1 April 2023. As a consequence, the tax
residency of Wizz Air Hungary Ltd. changed from Swiss to Hungarian from F24
onwards.
Global minimum tax
On 20 December 2021, the OECD released a framework for Pillar Two Model Rules
which aims to introduce a global minimum corporate tax rate of 15 per cent
applicable to multinational enterprise groups with global revenue over €750
million. On 15 December 2022, the EU Council formally adopted the EU minimum
tax directive by written procedure and rules are expected to apply for
accounting periods starting on or after 31 December 2023 (i.e. the year ending
31 March 2025 for the Group). Management is monitoring the status of
implementation to understand the potential impact on the Group's future tax
position. The Group does not account for deferred tax on Pillar Two top-up
taxes and, therefore, there was no impact on the recognition and measurement
of deferred tax balances.
11. Earnings and loss per share
Basic earnings and loss per share
Basic earnings per share is calculated by dividing the profit or loss
attributable to equity holders of the Group by the weighted average number of
Ordinary Shares in issue during each period.
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
Profit/(loss) for the six months, € million 405.1 (374.8)
Weighted average number of Ordinary Shares in issue, thousands 103,310 103,158
Basic earnings/(loss) per share, € 3.92 (3.63)
There were no Convertible Shares in issue at 30 September 2023 (30 September
2022: nil).
Diluted earnings and loss per share
Diluted earnings per share is calculated by adjusting the weighted average
number of Ordinary Shares in issue with the weighted average number of
Ordinary Shares that could have been issued in the respective period as a
result of the conversion of the following convertible instruments of the
Group:
▶ Convertible Shares;
▶ Convertible Notes; and
▶ employee share options (vested share options are included in the
calculation).
The profit for the period has been adjusted for the purposes of calculating
diluted earnings per share in respect of the interest charge relating to the
debt which could have been converted into shares.
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
Profit/(loss) for the six months, € million 405.1 (374.8)
Interest expense on convertible debt (net of tax), € million 0.9 -
Profit/(loss) used to determine diluted earnings per share 406.0 (374.8)
Weighted average number of Ordinary Shares in issue, thousands 103,310 103,158
Adjustment for assumed conversion on convertible instruments, thousands 24,396 -
Weighted average number of Ordinary Shares for diluted earnings per share, 127,706 103,158
thousands
Diluted earnings/(loss) per share, € 3.18 (3.63)
There is no difference between the basic and diluted loss per share for H1 F23
as potential Ordinary Shares are anti-dilutive due to incurred loss.
12. Property, plant and equipment
Land and Aircraft maintenance assets Aircraft assets and parts Fixtures and Advances paid for aircraft* Advances paid RoU assets aircraft and spares RoU assets other Total
buildings fittings for aircraft maintenance assets
€ million € million € million € million € million € million € million € million € million
Cost
At 1 April 2022 25.8 374.0 690.3 11.3 734.4 224.6 3,414.1 16.1 5,490.6
Additions 0.1 33.2 483.5 1.2 271.2 33.3 389.3 7.2 1,219.0
Disposals - (90.5) (6.5) (0.2) (248.1) - (112.1) - (457.4)
Transfers - 25.0 - - - (25.0) - - -
FX translation effect - 1.7 (5.9) - - (0.7) (15.1) - (20.0)
At 30 September 2022 25.9 343.4 1,161.4 12.3 757.4 232.2 3,676.2 23.3 6,232.1
At 1 April 2023 25.9 428.6 1,298.3 12.2 810.0 208.2 3,920.6 27.3 6,731.1
Additions 0.8 110.9 278.4 0.4 159.3 38.2 374.6 0.1 962.7
Disposals - (134.8) (5.2) - (218.5) - (216.3) (0.1) (574.9)
Transfers - 46.5 - - - (46.5) - - -
FX translation effect - 2.0 1.4 - - 0.1 4.6 - 8.1
At 30 September 2023 26.7 453.2 1,572.9 12.6 750.8 200.0 4,083.5 27.3 7,127.0
Accumulated depreciation
At 1 April 2022 4.5 263.4 83.8 7.6 - - 1,492.7 7.2 1,859.2
Depreciation charge for the period 0.8 49.2 26.4 0.9 - - 196.9 1.3 275.5
Disposals - (90.1) (0.3) (0.2) - - (111.7) - (202.3)
FX translation effect - 0.9 (0.1) - - - (3.8) - (3.0)
At 30 September 2022 5.3 223.4 109.8 8.3 - - 1,574.1 8.5 1,929.4
At 1 April 2023 6.0 242.4 128.6 8.4 - - 1,669.8 9.9 2,065.1
Depreciation charge for the period 0.8 72.3 46.7 0.9 - - 224.6 1.5 346.8
Disposals - (130.5) (1.8) - - - (214.3) - (346.6)
FX translation effect - (0.7) (0.7) - - - (0.9) - (2.3)
At 30 September 2023 6.8 183.5 172.8 9.3 - - 1,679.2 11.4 2,063.0
Net book amount
At 1 April 2022 21.3 110.6 606.5 3.7 734.4 224.6 1,921.4 8.9 3,631.4
At 30 September 2022 20.6 120.0 1,051.6 4.0 757.4 232.2 2,102.2 14.8 4,302.8
At 1 April 2023 19.9 186.2 1,169.7 3.8 810.0 208.2 2,250.8 17.4 4,666.0
At 30 September 2023 19.9 269.7 1,400.1 3.3 750.8 200.0 2,404.3 15.9 5,064.0
* Disposals represent the refunds upon delivery of aircraft of advances
previously paid.
The Group entered into various financing arrangements in order to finance
aircraft including sale and leaseback, Japanese Operating Lease with Call
Option (JOLCO) and French Tax Lease (FTL) structures. Certain of these
arrangements include Special Purpose Vehicles (SPV) in the financing structure
and in accordance with IFRS 10, where the Group has control of these entities,
these are consolidated in the Group balance sheet. Aircraft assets and parts
leased under JOLCO are not classified as leases under IFRS 16 and treated as
aircraft assets and parts (as if there were no sale at all). Additions to
aircraft assets and parts also include two purchased aircraft that were
previously leased by the Group.
Other right-of-use (RoU) assets include leased buildings and simulator
equipment. Please refer to Note 16 (#Section80) for details on lease
liabilities.
Additions to aircraft maintenance assets were fixed assets created primarily
against provision, as the Group's aircraft or their main components no longer
met the relevant return conditions under lease contracts.
Additions to "advances paid to aircraft maintenance assets" reflect primarily
the advance payments made by the Group to the engine maintenance service
provider under power by the hour agreements.
Additions to "advances paid for aircraft" represent PDPs made in the period,
while disposals in the same category represent PDP refunds received from the
manufacturer where the respective aircraft or spare engine was leased (i.e.
not purchased) by the Group. In F23, the Group entered into a PDP financing
loan agreement denominated in US Dollars ($), according to which PDPs in the
amount of $159.2 million is pledged as collateral (see Note 16 (#Section80) ).
The Group has reviewed the expected useful economic lives attributed to its
leased aircraft fleet and notes that the duration of its leases is
significantly less than the current expected life of the aircraft. No change
as a result of climate change has been made.
Impairment assessment
No new impairment triggers for the Group's aircraft fleet, which comprises a
single cash-generating unit (CGU), in the period have been identified.
Nonetheless, an impairment risk review assessment was performed for the
Group's aircraft fleet CGU that includes virtually all property, plant and
equipment, and also the intangible assets of the Group. The recoverable amount
of that CGU was estimated by value in use calculations based on cash flow
projections in the plan approved by the Board for the following three
financial years up to and including March 2026.
Management's assessment of future trends includes trading and other
assumptions - such as fleet size, passenger numbers, load factors, commodity
prices and foreign exchange rates - based on external and internal inputs, as
well as climate change risks and opportunities outlined in the TCFD disclosure
in the Group's 2023 Annual Report and Accounts. Key assumptions for the jet
fuel price and USD exchange rate were the following:
2024 2025 2026
Jet fuel price (EUR per metric tonne) 879.0 901.0 920.0
USD/EUR exchange rate 1.09 1.05 1.05
Cash flow projections of the approved plan were extrapolated beyond March 2026
for a period of 12 years in total to cover all lease terms in the existing
aircraft fleet. A pre-tax discount rate of 10.6 per cent (31 March 2023: 10.1
per cent) was derived from the weighted average cost of capital of the Group.
The risk of significant adverse changes in cash flows was taken into account
by calculating and weighting management's base case approved plan with a
downside scenario that is consistent with that used in the Group's going
concern assessment. Sensitivity analysis was performed by management to assess
the impact of changes in its trading assumptions and the key assumptions
detailed above. As a result of this risk review, management did not identify
any risk of an impairment.
Aircraft in Ukraine
Three airframes remained grounded in Ukraine after the successful repatriation
of one aircraft and all the engines. The above impairment assessment included
those three airframes with a total net book value of €24.3 million. Based on
photographic and local employee information these airframes are in good
condition and have not been damaged in the conflict. Whilst not a separate
CGU, cash flow projections were estimated for these aircraft based on the
average cash contribution generated per aircraft in the Group's fleet adjusted
for a downward scenario according to the plans and calculations described
above, and the cost of planned maintenance of the particular aircraft.
Management's working assumption is that these aircraft will be returned to the
fleet before the summer season in 2024; however, delays to the date until the
aircraft can be returned to the fleet can cause a significant but not material
change to their estimated recoverable amount. If the aircraft do not return
into service for a prolonged period of time, then additional consideration
will be needed in upcoming reporting cycles.
13. Trade and other receivables
30 Sep 2023 31 Mar 2023
(restated)
€ million € million
Non-current
Receivables from lessors 8.6 9.1
Other receivables 11.8 12.3
Non-current trade and other receivables 20.4 21.4
Current
Trade receivables * 206.0 170.0
Receivables from lessors 16.2 15.5
Other receivables 20.1 27.2
Total current other receivables 36.3 42.7
Prepayments, deferred expenses and accrued income * 283.5 177.3
Current trade and other receivables 525.8 390.1
Total trade and other receivables 546.2 411.5
*Current trade receivables at 31 March 2023 now total €170.0 million
(previously €233.8 million) and prepayments, deferred expenses and accrued
income at 31 March 2023 now total €177.3 million (previously €113.5
million) following the reclassification of prepayment balances made to
vendors. The change had no impact on the statement of financial position.
Receivables from lessors (both current and non-current) represent the deposits
provided by the Group to lessors as security in relation to lease contracts
and in relation to the funding of future maintenance events.
Trade receivables included €118.0 million of receivables from contracts with
customers (at 31 March 2023: €127.0 million).
Total trade and other receivables as at 30 September 2023 included financial
instruments in the amount of €399.3 million (31 March 2023: €270.4
million).
Impairment of trade and other receivables
30 Sep 2023 31 Mar 2023
€ million € million
Impaired receivables
- trade receivables (3.5) (3.5)
Allowances on impaired receivables
- other receivables (0.6) (0.5)
The Group recorded €2.1 million of receivables from Warsaw Modlin Airport
during 2013 as compensation for damages which was immediately impaired in
full. However, the Group is legally claiming the full amount in court. The
compensation claimed by the Group, plus interest, was awarded by the District
Court of Warsaw in June 2018. However, the airport appealed against the
decision, which is currently pending. There was no transaction regarding this
receivable in the first half of this financial year.
14. Trade and other payables
30 Sep 2023 31 Mar 2023
€ million € million
Non-current liabilities
Accrued expenses 57.2 59.1
Other payables - -
Non-current trade and other payables 57.2 59.1
Current liabilities
Trade payables 202.1 173.7
Payables to passengers 81.8 95.2
Other trade payables 35.7 34.0
Accrued expenses 686.2 583.4
Current trade and other liabilities 1,005.8 886.3
Total trade and other payables 1,063.0 945.4
Payables to passengers include the refunds made in credits which can be used
by customers for rebooking tickets for later dates or can be requested to be
refunded by the Group in cash and other liabilities towards customers. Credits
not eligible for cash refund are classified as deferred income.
Accrued expenses mainly include accruals for operating expenses such as
airport and ground handling, fuel, ETS allowances, en-route and navigation,
crew and maintenance-related expenses and liabilities for EU regulation (EC)
No. 261/2004 (EU261) compensation to customers in the amount of €11.8
million (31 March 2023: €11.2 million), refund made to passengers beyond the
original paid value.
Total trade and other payables as at 30 September 2023 included financial
instruments in the amount of €875.0 million (31 March 2023: €705.5
million).
15. Provisions for other liabilities and charges
Aircraft Other Total
maintenance
€ million € million € million
At 31 March 2022 88.8 18.3 107.1
Non-current provisions 43.0 0.9 43.9
Current provisions 45.8 17.4 63.2
Capitalised within property, plant and equipment 37.8 - 37.8
Charged to comprehensive income 6.0 91.0 97.0
Used during the period (19.7) (36.4) (56.1)
At 30 September 2022 112.9 72.9 185.8
Non-current provisions 28.7 0.9 29.6
Current provisions 84.2 72.0 156.2
At 31 March 2023 148.7 7.4 156.1
Non-current provisions 76.2 0.1 76.3
Current provisions 72.5 7.2 79.8
Capitalised within property, plant and equipment 103.1 - 103.1
Charged to comprehensive income (6.0) 9.4 3.4
Used during the period (38.7) (0.9) (39.6)
FX translation effect 4.8 - 4.8
At 30 September 2023 211.9 15.8 227.7
Non-current provisions 95.3 0.1 95.4
Current provisions 116.6 15.7 132.3
Non-current provisions mainly relate to future aircraft maintenance
obligations of the Group on leased aircraft and spare engines, falling due
typically between one and five years from the balance sheet date. Current
aircraft maintenance provisions relate to heavy maintenance obligations
expected to be fulfilled in the coming financial year. The amount of provision
reflects management's estimates of the cost of heavy maintenance work that
will be required in the future to discharge obligations under the Group's
lease agreements. Maintenance provisions in relation to engines and APUs
covered by power by the hour agreements are netted off with the prepayments
made to the maintenance service provider under those agreements in respect of
the same group of engines and APUs.
16. Borrowings
30 Sep 2023 31 Mar 2023
€ million € million
Lease liability under IFRS 16 480.9 444.2
Liability related to JOLCO and FTL contracts 85.5 74.1
Unsecured debts 505.2 506.7
Secured debt 117.9 250.0
Total current borrowings 1,189.5 1,275.0
Lease liability under IFRS 16 2,578.5 2,350.9
Liability related to JOLCO and FTL contracts 1,312.6 1,137.0
Unsecured debt 501.7 498.8
Loans from non-controlling interests 14.2 13.8
Total non-current borrowings 4,407.0 4,000.5
Total borrowings 5,596.5 5,275.5
On 19 January 2021, Wizz Air Finance Company B.V., a 100 per cent owned
subsidiary of Wizz Air Holdings Plc, issued a €500.0 million 1.35 per cent
Eurobond, fully and irrevocably guaranteed by the Company, under the
€3,000.0 million EMTN programme with a maturity in January 2024. Further to
that, on 19 January 2022, Wizz Air Finance Company B.V., a 100 per cent owned
subsidiary of Wizz Air Holdings Plc, issued a €500.0 million 1.00 per cent
Eurobond, fully and irrevocably guaranteed by the Company, under the
€3,000.0 million EMTN programme with a maturity in January 2026. These
Eurobonds do not contain any financial covenants.
In February 2023, the Group entered into a PDP financing loan agreement,
according to which a part of the PDPs made has been financed and at the same
time pledged as collateral, through the novation of the PDPs and the
associated aircraft purchase rights to an orphan SPV. At 30 September 2023
$125.1 million is borrowed, and PDPs in the amount of $159.2 million are
collateralised. The Group has an obligation to repay the financed amount, its
interest and other costs related to the transaction within one year. When all
obligations are settled, the aircraft purchase rights and the PDPs are
automatically re-novated to Wizz Air. In case of default, the Group bears the
potential risk of losing the purchase rights and the related PDP amounts.
There were no defaults during the six-month period ended on 30 September 2023
and the six months period ended on 30 September 2022. The PDP refinancing
credit facility is available for further financing for a maximum of three
years and does not contain any financial covenants.
The maturity profile of borrowings as at 30 September 2023 is as follows:
IFRS 16 aircraft and engine lease liability IFRS 16 other lease liability JOLCO and FTL lease liability Unsecured debt Secured debt Loans from non-controlling interests Total
€ million € million € million € million € million € million € million
Payments due:
Within one month 33.9 0.2 - 0.7 10.9 - 45.7
Between one and three months 76.3 0.4 21.4 - 43.9 - 142.0
Between three months and one year 368.6 1.6 64.1 504.5 63.1 - 1,001.9
Between one and two years 458.2 6.0 92.1 - - - 556.3
Between two and three years 399.8 1.9 92.9 501.7 - - 996.3
Between three and four years 324.1 1.5 95.3 - - - 420.9
Between four and five years 278.8 1.6 97.8 - - - 378.2
In more than five years 1,102.1 4.4 934.5 - - 14.2 2,055.2
Total borrowings 3,041.8 17.6 1,398.1 1,006.9 117.9 14.2 5,596.5
The maturity profile of borrowings as at 31 March 2023 is as follows:
IFRS 16 aircraft and engine lease liability IFRS 16 other lease liability JOLCO and FTL lease liability Unsecured debt Secured debt Loans from non-controlling interests Total
€ million € million € million € million € million € million € million
Payments due:
Within one month 44.9 0.2 - 6.0 5.2 - 56.3
Between one and three months 68.8 0.4 18.6 - 65.0 - 152.8
Between three months and one year 328.0 1.9 55.6 500.7 179.8 - 1,066.0
Between one and two years 415.0 2.6 77.8 - - - 495.4
Between two and three years 385.0 2.3 79.5 498.8 - - 965.6
Between three and four years 303.1 1.9 81.4 - - - 386.4
Between four and five years 222.6 1.8 83.2 - - - 307.6
In more than five years 1,009.1 7.4 815.1 - - 13.8 1,845.4
Total borrowings 2,776.5 18.5 1,211.2 1,005.5 250.0 13.8 5,275.5
17. Deferred income
30 Sep 2023 31 Mar 2023
€ million € million
Non-current liabilities
Deferred income 117.1 103.3
Current liabilities
Unearned revenue 576.3 761.1
Other 9.3 9.2
585.6 770.3
Total deferred income 702.7 873.6
Non-current deferred income represents the value of benefit for the Group
coming from credits and free aircraft components received from manufacturers
and component suppliers, which will be recognised as a credit (a decrease to
aircraft-related expenses) over the useful life of the respective asset.
Current deferred income represents the value of tickets paid by passengers for
which the flight service is yet to be performed ("unearned revenue"), the
value of membership fees paid but not yet recognised and credits provided to
passengers with no cash conversion option in the amount of €22.7 million (at
31 March 2023: €19.4 million). Unearned revenue decreased primarily due to
seasonality having lower volume of bookings than before summer season.
The contract liabilities (unearned revenue) of €576.3 million existing at 30
September 2023 (at 31 March 2023: €761.1 million) will become revenue during
the upcoming twelve months (subject to further cancellations that might happen
after the period end).
18. Capital commitments
At 30 September 2023 the Group had the following capital commitments:
▶ A commitment to purchase 347 Airbus aircraft of the A320 family in the
period 2023-2029. The total commitment is valued at US$50.6 billion (€47.7
billion) based on list prices last published in 2018 and escalated annually
until the reporting date based on contract terms (31 March 2023: US$42.2
billion (€38.8 billion) to purchase 290 Airbus aircraft of the A320 family
in the period 2023-2028 and US$11.0 billion (€10.1 billion) in relation to
75 A321neo aircraft as approved by shareholders in August 2023). As at the
date of approval of this document out of the 347 aircraft 21 are to be
delivered in H2 F24 and for 16 financing is already contracted. The Group uses
various financing arrangements in order to finance aircraft including sale and
leaseback, Japanese Operating Lease with Call Option (JOLCO) and French Tax
Lease (FTL) structures.
▶ A commitment to purchase 18 IAE "neo" (GTF) spare engines in the
period 2023-2026. The total commitment is valued at US$381.7 million (€359.7
million) at list prices in 2023 US$ terms (31 March 2023: US$572.5 million
(€525.7 million), valued at 2023 list prices, to purchase 27 IAE "neo" (GTF)
spare engines in the period 2023-2026). As at the date of approval of this
document out of the 18 engines 4 is to be delivered in H2 F24 and it is not
financed yet.
▶ A commitment to purchase 3 Full Flight Simulators. The total
commitment is valued at €13.6 million based on contract terms. Payment is
due in installments with €4.6 million paid as at 30 September 2023.
19. Contingent liabilities
The Group has certain contingent liabilities in relation to European
Commission state aid investigations and to legal claims initiated by
Carpatair. These matters were explained in Note 33 in the 2023 Annual Report
and Accounts of the Group and there have been no significant developments in
these cases since then.
No provision has been made by the Group in relation to these cases because
there is currently no reason to believe that the Group will incur charges from
these cases.
20. Subsequent events
In FY23 the Group entered into a PDP financing loan facility (see Note
(#Section80) 16 (#Section80) ). In October 2023, the loan facility was
extended by an additional US$270.0 million, keeping the total drawdown limit
at US$280.6 million, aimed at bolstering the Group's liquidity.
Based on a service bulletin in relation to GTF engine inspections (issued 3
November, 2023), and verification performed with Pratt & Whitney, the
Group is projecting a grounding of 45 aircraft by the end of F24 (including
aircraft previously grounded in September 2023.The Group has agreed an OEM
compensation package for flight disruption costs incurred and expected to be
incurred in respect of the aircraft that have been grounded or are expected to
be grounded. An element of this compensation, which was not material, relates
to costs incurred in the period ended 30 September 2023. These credits are
included in net other expenses in the condensed consolidated interim statement
of comprehensive income.
21. Related parties
The Group has related party relationships with Indigo Hungary LP and Indigo
Maple Hill LP (collectively referred to as "Indigo" here) and its key
management personnel (Directors and Officers).
There were no related party transactions in the period ended 30 September 2023
that materially affected the financial position or the performance of the
Group during that period and there were no changes to the related party
positions described in the 2023 Annual Report and Accounts that could have a
material effect on the financial position or performance of the Group in the
same period.
The Group has contracted with a related party of the CEO to provide IT
services with regard to machine learning. The amount paid for this service for
the six months ended on 30 September 2023 was €2.1 million (for the six
months ended on 30 September 2022: €1.8 million), which happened on an
arm's length basis. On 30 September 2023 the outstanding amount payable to the
related party was €0.3 million.
Wizz Air invested 2.5 million GBP into Firefly Green Fuels SAF as Tranche 1
investment in April 2023 resulting in 14.3 per cent ownership. Tranche 2
investment amounting to 2.5 million GBP is expected to happen in H2 F24 (to
have 25 per cent ownership).
Wizz Air invested 1.7 million USD in Tranche 1 in May 2023 from 4 million USD
in total, having 2.5 per cent ownership, as other investment. The CleanJoule
consortium investment was led by Indigo Partners and GenZero. As part of the
consortium's investment, Frontier Airlines, Wizz Air and Volaris have signed
binding agreements to purchase up to 90 million gallons of SAF from
CleanJoule.
22. Seasonality of operations
The Group's results of operations, like those of most other airlines in
Europe, vary significantly from quarter to quarter within the financial year.
Historically, the Group has had higher passenger revenue during the summer
season in comparison to the winter season (with the exception of the periods
around Christmas, New Year and Easter) as this is the period during which many
Europeans tend to take their annual holiday. Flight frequency, load factor and
average ticket prices all tend to be higher during such peak periods compared
to other periods of the year.
Glossary of terms and alternative performance measures (APMS)
Alternative performance measures: Non-IFRS standard performance measures
aiming to introduce the company's performance in line to the management's
requirements. The existing presentation is considered relevant for the users
of the financial statements because: (i) it mirrors disclosures presented
outside of the financial statements; and (ii) it is regularly reviewed by the
Chief Operating Decision Maker for evaluating the financial performance of its
single operating segment.
Aircraft utilisation / Utilisation: the number of hours of one aircraft is in
operation on one day. Rationale - Key performance indicator in aviation
business, measurement for one day aircraft productivity.
Calculation (for 1 month): monthly aircraft utilization equals total block
hours divided by number of days in the month divided by the equivalent
aircraft number divided by 24 hours. Calculation (for a longer period than 1
month): the given period aircraft utilization equals with the weighted average
of monthly aircraft utilisation based on the month-end fleet counts.
Ancillary revenue: generated revenue from ancillaries (including other
ancillary revenue related items). Rationale - Key financial indicator for the
separation of different revenue lines (see Notes 6 and 7).
Ancillary revenue per passenger: ancillary revenue divided by the number of
passengers (PAX) in the given period, which gives the ancillary performance
per one passenger. Rationale - Key performance indicator for revenue
performance measurement.
Calculation: Ancillary revenue / PAX.
Available seat kilometers (ASK) / total ASKs: the number of seats available
for scheduled passengers multiplied by the number of kilometres those seats
were flown. Rationale - Key performance indicator for capacity measurement.
Calculation: Seats on aircraft * Stage length.
Average aircraft stage length (km): average distance that an aircraft flies
between the departure and arrival airport. Rationale - Key performance
indicator for measurement of capacity and productivity.
Calculation: Average stage length of the revenue sectors in the given period
(ASKs / Capacity).
Average capital employed: average capital employed is the sum of the annual
average equity and interest-bearing borrowings (including convertible debt),
less annual average cash and cash equivalents. This key financial indicator is
integral for evaluating the profitability and effectiveness of capital
utilization.
Calculation: Average equity + Interest-bearing borrowings (including
convertible debt) - Cash and cash equivalents.
Average departures per aircraft per day: the number of departures one
aircraft performs in a day in the given period. Rationale - Key performance
indicator for revenue generation / utilisation of assets.
Calculation: Total number of revenue sectors per number of days (in the given
period) per equivalent aircraft number.
CASK (total unit cost): total cost per ASK, where cost is defined as operating
expenses and financial expenses net of financial income. Rationale - Key
performance indicator for divisional cost control.
Calculation: Total operating expenses + Financial income + Financial expenses
/ Total of ASKs (km) *100.
Completion factor or rate: per cent of operated flights compared to the
scheduled flights. Rationale - Key performance indicator for commercial
planning and controlling, measurement for operational performance.
Calculation: Number of operated flights divided by scheduled flights.
Foreign exchange rate: average foreign exchange rate, plus any hedge deal for
the given period, calculated with a weighted average method. Rationale - Key
performance indicator for fuel control and treasury teams.
Fuel CASK (fuel unit cost): this metric is calculated by dividing the total
fuel costs (plus additional fuel consumption related costs) by the sum of
Available Seat Kilometers (ASKs) during a specific reporting period. Rationale
- Fuel CASK provides an insightful unit fuel cost measurement, representing
the cost incurred for flying one kilometer per seat within Wizz Air's fleet.
The rationale behind the use of this measure lies in its effectiveness as a
critical performance indicator for the control and management of fuel
expenses.
Calculation: Total fuel cost (EUR) / Total of ASKs (km) * 100.
Fuel price (average US$ per tonne): average fuel price within in a period,
calculated as fuel cost (including other fuel cost related items) divided by
the consumption. Rationale - Key performance indicator for fuel cost
controlling.
Equivalent aircraft or average aircraft count: the average number of aircraft
available to Wizz Air within a period. The count contains spares and aircraft
under maintenance. Rationale - Key performance indicator in aviation business
for the measurement of average fleet and capacity.
Calculation (for 1 month): average from the daily fleet count in the given
month which includes/excludes deliveries and redeliveries. Calculation (for a
longer period than 1 month): weighted average of the monthly equivalent
aircraft numbers based on the number of days in the given period.
Earnings before interest, tax, depreciation and amortisation (EBITDA): EBITDA
represents the profit or loss before accounting for net financing costs or
gains, income tax expenses or credits, and depreciation and amortization.
Rationale - This measure serves as a key financial indicator for the Company,
providing insights into operational profitability.
Calculation: Operating profit/(loss) + Depreciation and amortization.
EBITDA Margin %: EBITDA Margin % is computed by dividing EBITDA by total
revenue in millions of Euros.
Rationale - This metric presents EBITDA as a percentage of total net revenue
and offers valuable financial insights for the Company's performance
assessment.
Calculation: EBITDA / Total revenue (€ million) * 100.
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million
Operating profit/(loss) 522.9 (63.8)
Depreciation and amortisation 355.2 281.6
EBITDA 878.1 217.8
Total revenue (€ million) 3,052.3 2,193.8
EBITDA Margin (%) 28.8 % 9.9 %
Ex-fuel CASK (ex-fuel unit costs): This measure is computed by dividing the
total ex-fuel cost by the total ASKs within a given timeframe. Ex-fuel CASK
defines the unit ex-fuel cost for each kilometer flown per seat in Wizz Air's
fleet. Note that: ex-fuel cost contains Wizz Air operating costs excludes fuel
cost, includes interest cost and income. Rationale - It serves as an essential
performance indicator for overseeing divisional cost control. The rationale
for employing this metric is rooted in its ability to gauge and manage
non-fuel operating expenses effectively.
Calculation: Total ex-fuel cost (EUR) / Total of ASKs (km) * 100.
JOLCO (Japanese Tax Lease) and French Tax Lease: special forms of structured
asset financing, involving local tax benefits for Japanese and French
investors, respectively. Rationale -These measures are employed to encapsulate
specific lease contracts that facilitate enhanced cash utilization strategies.
Leverage ratio: The Leverage ratio is computed by dividing net debt by the
last twelve months EBITDA. Rationale - It serves as a crucial key financial
indicator for the Group, facilitating an assessment of the organization's
financial leverage and debt management.
Calculation: Net debt / EBITDA (12 months).
Liquidity: Liquidity represents cash, cash equivalents, and short-term cash
deposits, expressed as a percentage of the last twelve months' revenue.
Rationale - This key financial indicator offers a comprehensive view of the
Group's cash position and financial stability.
30 Sep 2023 30 Sep 2022
€ million € million
Cash and cash equivalents 1,132.3 1,129.3
Short-term cash deposits 600.5 365.2
Additional data to calculate liquidity
Total revenue for the 6 months ended 30 September 3,052.3 2,193.8
Total revenue for the 6 months ended 31 March 1,702.0 783.1
Total revenue for the rolling 12 months 4,754.3 2,976.9
Liquidity 36.4 % 50.2 %
Load factor (%): The number of seats sold (PAX) divided by the number of seats
available on the aircraft (capacity). Rationale - Key performance indicator
for commercial and revenue controlling.
Calculation: The number of seats sold, divided by the number of seats
available.
Net debt: Net debt is defined as interest-bearing borrowings (including
convertible debt) less cash and cash equivalents. Rationale - plays a pivotal
role as a key financial indicator, offering valuable information regarding the
Group's financial liquidity and leverage position.
30 Sep 2023 30 Sep 2022
€ million € million
Non-current liabilities
Borrowings 4,407.0 4,469.0
Convertible debt 25.5 25.7
Current liabilities
Borrowings 1,189.5 499.3
Convertible debt 0.3 -
Current assets
Short-term cash deposits 600.5 1,129.3
Cash and cash equivalents 1,132.3 365.2
Net debt 3,889.5 3,499.5
Additional data to calculate leverage ratio
EBITDA for the 6 months ended 30 September 878.1 217.8
EBITDA for the 6 months ended 31 March (83.5) (187.6)
Total EBITDA for the rolling 12 months 794.6 30.2
Leverage ratio 4.9 115.9
Net fare (total revenue per passenger): average revenue per one passenger
calculated by total revenue divided by the number of passengers (PAX) during a
specified period. Rationale - This metric is a crucial performance indicator
for commercial control, offering insights into the overall revenue generated
per passenger.
Calculation: Total revenue / PAX.
Passengers (alternative names: passengers carried, PAX): passengers who bought
a ticket (thus making revenue for the Company) for a revenue sector. Rationale
- Key performance indicator for commercial controlling team.
Calculation: Sum of number of passengers of all revenue sectors.
Passenger ticket revenue: generated revenue from ticket sales (including other
ticket revenue related items). Rationale - Key financial indicator for the
separation of different revenue lines (see Notes 6 and 7).
PDP: PDP refers to the pre-delivery payments made under the Group's aircraft
purchase agreements. These payments signify contractual commitments designed
to support fleet expansion and growth.
Period-end fleet size or number of aircraft at end of period: the number of
aircraft that Wizz Air has in its fleet and that is leased and/or owned at the
end of the given period. The count contains spares and aircraft under
maintenance as well. Rationale - Key performance indicator in aviation
business for the measurement of fleet.
Calculation: Sum of aircraft at the end of the given period.
RASK: RASK is determined by dividing the total revenue by the total ASK. This
measure characterizes the unit net revenue performance for each kilometer
flown per seat within Wizz Air's fleet. Rationale - It serves as a pivotal
performance indicator for commercial control, providing insights into the
revenue generation efficiency.
Calculation: Total revenue (EUR) / Total of ASKs (km) * 100.
Revenue departures or sectors: flight between departure and arrival airport
where Wizz Air generates revenue from ticket sales. Rationale - Key
performance indicator in revenue generation controlling.
Calculation: Sum of departures of all sectors.
Revenue passenger kilometres (RPK): the number of seat kilometres flown by
passengers who paid for their tickets. Rationale - Key performance indicator
for revenue measurement.
Calculation: Number of passengers * Stage length.
Return on capital employed (ROCE): It is operating profit or loss after tax
divided by average capital employed, expressed as a percentage. Rationale -
ROCE is a key financial indicator that facilitates an assessment of the
Group's profitability and the efficiency of capital utilization.
Six months ended 30 Sep 2023 Six months ended 30 Sep 2022
€ million € million
Operating loss/profit 119.9 (477.3)
Effective tax rate for the year (1.6) % (0.3) %
Operating loss/profit after tax 118.1 (476.1)
Average Shareholders' equity (16.5) 528.2
Average borrowings 5,308.2 4,197.8
Average cash and cash equivalents (1,130.8) (1,119.7)
Average short-term cash deposits (482.9) (383.5)
Average capital employed 3,678.0 3,222.8
ROCE (%) 3.2 % (14.8) %
Seat capacity / Capacity: the total number of available (flown) seats on
aircraft for Wizz Air within a given period (revenue sectors only). Rationale
- Key performance indicator for capacity measurement.
Calculation: Sum of capacity of all revenue sectors.
Ticket revenue per passenger: passenger ticket revenue divided by the number
of passengers (PAX) in the given period. Rationale - Key performance indicator
for measurement of revenue performance.
Calculation: Passenger ticket revenue / PAX.
Total block hours: each hour from the moment an aircraft's brakes are released
at the departure airport's parking place for the purpose of starting a flight
until the moment the aircraft's brakes are applied at the arrival airport's
parking place. Rationale - Key performance indicator in aviation business,
measurement for aircraft's block hours.
Calculation: Sum of block hours of all sectors (in the given period).
Total cash is a non-statutory financial performance measure and comprises/is
calculated from cash and cash equivalents, short-term cash deposits and total
current and non-current restricted cash. Rationale - This key financial
indicator offers a comprehensive view of the Group's cash position and
financial stability.
Total flight hours: each hour from the moment the aircraft takes off from the
runway for the purposes of flight until the moment the aircraft lands at the
runway of the arrival airport. Rationale - Key performance indicator in
aviation business, measurement for aircraft's flight hours.
Calculation: Sum of flight hours of all sectors (in the given period).
Total revenue: total ticket and ancillary revenue for the given period. The
split of total revenue presented in the condensed consolidated interim
statement of comprehensive income. Rationale - Key Financial indicator for the
Company.
Yield: Yield represents the total revenue generated per Revenue Passenger
Kilometer (RPK). Rationale - This measure is integral for assessing and
controlling commercial performance by quantifying the revenue derived from
each kilometer flown by paying passengers.
Calculation: The total revenue / RPK.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Interim Financial Report in
accordance with applicable law and regulations.
The Directors confirm that these condensed consolidated interim financial
statements have been prepared in accordance with International Accounting
Standard 34, 'Interim Financial Reporting' as adopted by the European Union.
The interim management report includes a fair review of the information
required by the Disclosure Guidance and Transparency Rules sourcebook of the
United Kingdom's Financial Conduct Authority paragraphs 4.2.7 and 4.2.8,
namely:
▶ an indication of important events that have occurred during the six
months ended 30 September 2023 and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
▶ material related party transactions during the six months ended 30
September 2023 and any material changes in the related party transactions
described in the 2023 Annual Report and Accounts of the Group.
The Directors of Wizz Air Holdings Plc are listed in the 2023 Annual Report
and Accounts of the Group.
A list of current Directors is maintained on the Wizz Air Holdings Plc
website: wizzair.com.
This Interim Financial Report was approved by the Board of Directors and
authorised for issue on 9 November 2023 and signed on its behalf by:
József Váradi
Director
Independent review report to Wizz Air Holdings Plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Wizz Air Holdings Plc's condensed consolidated interim
financial statements (the "interim financial statements") in the Interim
financial report of Wizz Air Holdings Plc for the 6 month period ended 30
September 2023 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting' as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
The interim financial statements comprise:
▶ the Condensed consolidated interim statement of financial position as
at 30 September 2023;
▶ the Condensed consolidated interim statement of comprehensive income
for the period then ended;
▶ the Condensed consolidated interim statement of cash flows for the
period then ended;
▶ the Condensed consolidated interim statement of changes in equity for
the period then ended; and
▶ the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim financial report of
Wizz Air Holdings Plc have been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting' as adopted by the
European Union and the Disclosure Guidance and Transparency Rules sourcebook
of the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Interim financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Interim financial report, including the interim financial statements, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the Interim financial report in accordance with
the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority. In preparing the Interim financial
report, including the interim financial statements, the directors are
responsible for assessing the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Interim financial report based on our review. Our
conclusion, including our Conclusions relating to going concern, is based on
procedures that are less extensive than audit procedures, as described in the
Basis for conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
complying with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
9 November 2023
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