REG - Wizz Air Holdings - Q3 F24 Results
25/01/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240125:nRSY8368Aa&default-theme=true
RNS Number : 8368A Wizz Air Holdings PLC 25 January 2024
WIZZ AIR HOLDINGS PLC - RESULTS FOR THE THREE MONTHS TO 31 DECEMBER 2023
Q3 F24 RESULTS:
CONTINUED CAPACITY AND TRAFFIC GROWTH
LSE: WIZZ
Geneva, 25 January 2024: Wizz Air Holdings Plc ("Wizz Air", "the Company" or
"the Group"), the fastest-growing European low-cost airline, today issues
unaudited results for the three months to 31 December 2023 ("third quarter",
"Q3" or "Q3 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 annual report for the year ended 31
March 2023 and any public announcements made by Wizz Air Holdings Plc during
the interim reporting period.
For the three months ended 31 December 2023 2022 Change(2)
Passengers carried 15,129,491 12,391,074 22.1%
Total revenue (€ million) 1,064.8 911.7 16.8%
EBITDA (€ million)(1) 18.7 (2.8) n.m.
EBITDA Margin (%)(1) 1.8 (0.3) 2.1ppt
Operating loss for the period (€ million) (180.4) (155.5) 16.0%
Unrealised foreign currency gain (€ million) 90.0 220.9 (59.3)%
(Loss)/profit for the period (€ million) (105.4) 33.5 n.m.
RASK (€ cent) 3.43 3.73 (8.0)%
Total CASK (€ cent) 4.10 4.50 (8.9)%
Fuel CASK (€ cent) 1.63 2.01 (18.6)%
Ex-fuel CASK (€ cent) 2.47 2.49 (1.1)%
Total cash (€ million)(1,3) 1,691.7 1,529.0 10.6%
Load factor (%) 87.6 87.3 0.3ppt
Period-end fleet size 195 177 10.2%
Period-end seat count (thousand) 17,272 14,192.6 21.7%
(1 ) 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.
(2) n.m.: not meaningful as a variance is more than (-)100 per cent.
(3) Total cash is a non-statutory financial performance measure and
comprises cash and cash equivalents (31 December 2023: €1,506.9 million; 31
March 2023: €1,408.6 million), short-term cash deposits (31 December 2023:
€82.3 million; 31 March 2023: nil) and total current and non-current
restricted cash (31 December 2023: €102.5 million; 31 March 2023: €120.4
million).
HIGHLIGHTS
▶ 26.9 per cent higher ASK capacity in Q3 vs last year.
▶ Record traffic of 15.1 million passengers in Q3 (vs 12.4 million last
year) and 60.3 million in CY 2023.
▶ Load factor 87.6 per cent (vs 87.3 per cent last year).
▶ Unit revenue (RASK) decreased by 8.0 per cent year-on-year, with
capacity growth and Israel traffic redeployment.
▶ A return to positive Q3 EBITDA of €18.7 million, in line with
pre-pandemic positive performance.
▶ Unit cost (CASK) decreased by 8.9 per cent year-on-year, driven by
lower fuel cost.
▶ Ex-fuel CASK decreased by 1.1 per cent year-on-year, driven by higher
utilization and structural benefits.
▶ Total cash balance at €1.7 billion.
▶ Operational metrics (including cancellations of Israel flights at the
start of the quarter):
▶ Flight completion rate at 99.3 per cent (flat vs last year).
▶ On-time performance increased to 72.2 per cent (vs 62.3 per cent in
last year).
▶ Total fleet utilization up to 11:35 hours (vs 10:31 hours in last
year).
▶ Operational utilization to 12:15 hours (vs 10:31 hours in last year).
▶ Restarting operations into Israel with routes from Budapest, Sofia,
Bucharest, Krakow, London, Rome to Tel Aviv from beginning of March.
▶ No change to GTF engine removal projections; 13 impacted
aircraft-on-ground at 31 December 2023 and 33 as of 24 January 2024; OEM
compensation received for Q3; expect a total of around 40 aircraft grounded at
F24-end and F25 ASK capacity flat year-on-year.
▶ Network and schedules adjusted to lower capacity growth; NEO fleet
deployed to longer sectors;
▶ Delivered nine new A321NEOs (expect 12 more in Q4 and 30 in F25);
finalized 13 lease extensions; added three dry leases (ex-Wizz Air aircraft),
accelerating spare engine deliveries.
József Váradi, Wizz Air Chief Executive Officer commented on business
developments in the period:
"Wizz Air continued to deliver industry-leading capacity growth during the
third quarter, ahead of the anticipated grounding of aircraft in Q4 as GTF
engines are removed for mandatory inspections. We have worked hard to adjust
the schedule in line with updated capacity projections, focusing on
seasonality and markets with the greatest potential to deliver stronger yields
and optimal operational performance. We continue to actively manage the GTF
engine issues to minimize the impact on our operations.
At the beginning of the quarter we faced geopolitical crises in Israel and the
Middle East and have responded by cancelling affected flights to protect our
passengers, employees, assets and general public.
Despite the associated flight cancellations and redeployment of capacity at
short notice, we managed operations well, delivering improved on-time
performance and significantly better utilization, year-on-year.
While a portion of our fleet will remain grounded this year, our key markets
continue to grow and evolve. We remain committed to stimulating demand in
smaller markets, and have relaunched inbound operations to Chisinau, Moldova
in December, while delivering additional aircraft to Kutaisi, Georgia.
Globally, we continue to be recognized for our industry-leading sustainability
and safety records. We have received awards from CAPA for being a Global
Environmental Sustainability Airline Group of the Year award for the second
consecutive year (2022, 2023) and World's Top 5 Safest Low-Cost Airline Award
by AirlineRatings.com."
On current trading and the outlook, Mr Váradi added:
"Trading at the start of Q4 has been positive. Selling load factors are
trending at similar levels to last year, while unit revenues (RASK) are up
year-on-year, specifically during March and around Easter holidays. Having
adjusted ASK capacity for Q4 (+c.15 per cent vs last year) we are finalizing
the schedule for the spring/ summer '24 period and at this time, expect to
operate flat capacity year-on-year in H1 F25.
As we look towards fiscal year '25 we are on track to operate flat ASK
capacity year-on-year, supported by new aircraft deliveries, lease extensions,
third party aircraft and driving higher utilization.
We remain committed to effective cost management, utilization of assets and
productivity, all of which are paramount in the coming periods, and we are
confident in our ability to manage these factors. There are opportunities
for us to optimize operations and achieve better trading yields, as overall
market capacity is likely to remain subdued for some time due to both the
macro-economic environment, and other external pressures.
While financial performance in the last quarter was materially affected by the
suspension and reallocation of Israel capacity, we maintain our expectations
for F24 net income, which are underpinned by positive trading at the start of
Q4, reduced capacity in the same period, and OEM compensation for the grounded
aircraft.
Based on our assessment of the overall impact of mandatory engine inspections,
we are confident that our long-term growth plans of operating a fleet of 500
aircraft by the end of the decade remain unaffected."
NEAR-TERM AND FORWARD OUTLOOK
▶ Capacity (ASKs): Q4 F24 +15 per cent YoY; H1 F25 flat YoY; F25 flat
YoY.
▶ Load factor: F24 above 90 per cent.
▶ Revenue: F24 RASK mid-single digit higher YoY.
▶ Cost: F24 ex-fuel CASK mid-to-high single digit lower YoY.
▶ Financial performance: maintain F24 net income guidance range of
€350-400 million, supported by positive trading, higher utilization of
operational fleet, one-off benefits from OEM cost protection and credits from
deferred sale and lease-back transactions materializing in the fourth quarter.
▶ The above guidance is based on current visibility in relation to
external events (including macro, security, infrastructure and/or supply chain
developments), revenue performance, as well as any airworthiness directive in
relation to GTF engine inspections and a number of available spare engines.
REVENUE, COST AND CASH HIGHLIGHTS
Total revenue amounted to €1,064.8 million an increase of 16.8 per cent
versus Q3 F23:
▶ Passenger ticket revenue(1) increased by 19.2 per cent to €553.9
million.
▶ Ancillary revenue(1) increased by 14.3 per cent to €510.9 million.
▶ Total unit revenue decreased by 8.0 per cent to 3.43 Euro cents per
available seat kilometre (ASK).
▶ Ticket RASK decreased by 6.1 per cent to 1.79 Euro cents year-on-year,
reflecting lower ticket revenue due to the latest Israel-Hamas war, weaker
regional demand and extra capacity added in the period ahead of Q4 GTF engine
removals.
▶ Ancillary RASK decreased by 10.0 per cent to 1.65 Euro cents
year-on-year, as ticket yield pressure transferred also to ancillary revenue
and last year's figure contained partial impact from one-off COVID related
revenue.
▶ EBITDA increased to €18.2 million.
Total operating costs increased by 16.7 per cent to €1,245.2 million versus
Q3 F23:
▶ Total unit costs (including net financing expense) decreased by 8.9
per cent to 4.10 Euro cents per ASK.
▶ Ex-fuel unit costs decreased by 1.1 per cent to 2.47 Euro cents per
ASK, mainly driven by added capacity, improved utilization, lower net
financing expenses and impact of GTF engine compensations recorded in the
period.
▶ Fuel unit costs decreased by 18.6 per cent to 1.63 Euro cents per ASK,
driven by lower fuel cost.
Total cash increased by 10.6 per cent to €1,691.7 million from €1,529.0
million. Net FX gain amounted to €88.1 million (Q3 F23: €224.2 million) of
which €90.0 million was unrealized (Q3 F23: €220.9 million), as the EUR
strengthened during the quarter versus USD and USD liabilities were revalued
at the end of period.
ISRAEL AND GEOPOLITICAL CRISES IN MIDDLE EAST
Wizz Air cancelled circa six per cent of its planned capacity for Q3 in the
early October, as the crises unfolded in Israel. Affected capacity was
redeployed across the network at short notice, which partly contributed to
lower load factors in the period. The conflict caused a spillover effect to
seasonal demand for travel to the nearby markets of Jordan and Egypt, whose
capacity was partially also redeployed, accounting for additional three per
cent of redeployed capacity. On the group level, the impact on unit revenue
was circa 0.10 € cents in the period. More recently and following a
comprehensive security analysis Wizz Air is restarting operations into Israel
with a routes from Budapest, Sofia, Bucharest, Krakow, London, Rome to Tel
Aviv from beginning of March.
GTF ENGINE UPDATE
As of January 24, 2024, Wizz Air had 33 aircraft on the ground because of GTF
engine related matters. The company is expecting circa 40 aircraft to be
grounded at the end of F24 (including aircraft grounded since September '23).
At the time of the press release the Company is maintaining its assumptions
for average expected shop visit time needed to return engines back to service
of circa 300 days, number of allocated MRO induction slots staying the same
(based on agreement with OEM) and is advancing new spare engine deliveries
over the next six months. Wizz Air has actively managed its fleet to minimize
the impact of grounding, deploying NEO fleet to longer sectors, delivering
new aircraft and extending existing leases to shore up the flying capacity. As
announced previously, it has secured the OEM support package (including
compensation for grounded aircraft) that protects near and long-term
operational and financial impact to the business. OEM compensation has been
received for the Q3 period.
(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
▶ Following a comprehensive evaluation of safety factors, Wizz Air has
restarted inbound flights to Chisinau, Moldova from 14 December. It intends to
gradually reintroduce operations, including reopening its base there.
▶ During the quarter we announced additional aircraft for Poland (Gdansk
and Warsaw).
▶ Wizz Air Abu Dhabi celebrated a record-breaking year in CY 2023,
doubling the number of flights to 15,000 and carrying more than three million
passengers. The current fleet of 12 aircraft in Abu-Dhabi flies to 40
destinations in 27 countries.
▶ Wizz Air flew 60.3 million passengers in the calendar year 2023,
setting a new record for the highest number of passengers flown in any
twelve-month period during the company's eighteen-year history.
▶ Wizz Air grew its market share to 26 per cent (+1 per cent vs Q3 F23)
in CEE, retaining its market leadership in the region. It is the top airline
in three of its core CEE markets (Romania, Hungary and Bulgaria).
FLEET UPDATE
▶ In the three months ended 31 December 2023 Wizz Air took delivery of
nine new A321neo aircraft, and one A320ceo was redelivered, ending the third
quarter with a total fleet of 195 aircraft: 39x A320ceo, 41x A321ceo, 6x
A320neo, 109x A321neo.
▶ Delivered aircraft were financed through eight sale and leaseback
transactions and one JOLCO (Japanese Operating Lease with Call Option).
▶ Wizz Air documented thirteen lease extensions, four of which are
A321ceo with 230 seats and the rest are 180 seater A320ceos. The lease
extensions range between two and four years and have been secured at both
discounted and original lease rates.
▶ We have agreed to dry lease three former Wizz Air A320ceos at terms
equivalent to original lease.
▶ The average age of the fleet currently stands at 4.2 years, one of the
youngest fleets of any major European airline, while the average number of
seats per aircraft has climbed to 224 as at December 2023.
▶ The share of new "neo" technology aircraft within Wizz Air's fleet
increased to 59 per cent by the end of Q3 F24 and is planned to surpass 60 per
cent by the end of F24.
▶ For the remainder of F24 we expect twelve new A321neo aircraft
delivery, while three A320ceo aircraft will be redelivered to lessors and will
exit the fleet.
▶ As at 31 December 2023, Wizz Air's delivery backlog comprises a firm
order for 13 x A320neo, 277 x A321neo and 47 x A321XLR aircraft, a total of
340 aircraft.
▶ The table below provides expected number of aircraft for the current
and next fiscal years, including lease extensions. Figures reflect Airbus
contractual delivery timelines (excluding expected delays). The company
expects c.15 aircraft to be delayed in period ending March 2025 and March
2026, respectively.
March 2024 March 2025 March 2026
Planned Planned Planned
A320ceo (180/186 seats) (9x extension) 39 32 20
A320neo (186 seats) 6 6 9
A321ceo (230 seats) (4x extensions) 41 41 29
A321neo (239 seats) 121 162 219
A321neo XLR (239 seats) - 2 11
Fleet size (with finalised extensions) 207 243 288
FINANCIAL UPDATE
▶ As of 22 January 2024, using jet fuel zero-cost collars, Wizz Air has
a hedge coverage of 62 per cent for its jet fuel needs for the remainder of
F24 at a price of 797/914 $/mT. For F25, the coverage is 37 per cent at the
price of 747/854 $/mT. The jet fuel-related EUR/USD FX coverage stands at 64
per cent for F24 at 1.0686/1.1114, while the coverage for F25 stands at 36 per
cent at 1.0923/1.1359 rates.
▶ The initial €500 million bond that matured in January 2024 was
repaid from cash.
▶ The Company signed repurchase agreement for its inventory of EU
emissions trading scheme credits, receiving 253.8 million.
▶ The outstanding balance on the PDP facility at the end of December
2023 stands at €235.7 million.
▶ Net debt(1) at the end of 31 December 2023 was €4,243.8 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 29.0 to 5.2.
Over the same period, liquidity(1) reduced to c.32% per cent.
▶ The Company received OEM compensation from Pratt & Whitney related
to GTF engine issues. The compensation relates to costs incurred in the period
ended 31 December 2023. These credits are presented as net of other expenses
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 CO2 emissions amounted to 51.5 grams per passenger for the rolling
twelve months to 31 December 2023, continuing to improve its carbon intensity.
We continue to be focused on delivering value for all stakeholders and to
further our environmental and social agenda. The most material ESG related
developments during the three months ending December 2023 were:
Month Project Description
November 2023 CAPA Awards For the second consecutive year Wizz Air was named Global Environmental
Sustainability Airline Group of the Year by CAPA (Centre for Aviation).
November 2023 First fully electric turnaround at Budapest Airport Wizz Air and Menzies Aviation, the leading service partner to the world's
airports and airlines, performed fully electric turnarounds at Budapest
Airport. Currently, Menzies Aviation provides fully electric turns for two
Wizz Air aircraft simultaneously at Budapest Airport.
November 2023 Annual Sustainability Month Wizz Air initiated its second, annual Sustainability Month campaign, launching
a network-wide competition. The WIZZ Sustainability Ambassadors took an active
role inspiring employees to use green transportation, coordinating team
activities like tree planting events, and aiding those in need through
charitable donations.
November 2023 Employee Engagement Survey 53% of employees participated reaching a score of 7.1 compared to last year's
result of 6.4.
December 2023 S&P Global Corporate Sustainability Assesment rating Wizz Air scored 40 in the 2023 S&P Global Corporate Sustainability
Assessment, reflecting an improvement of 4 points over the last year.
December 2023 ISS ESG Corporate Rating Wizz Air's Corporate ESG Rating by the Institutional Stakeholder Services
improved from C- to C.
OTHER DEVELOPMENTS
▶ In November, Wizz Air Abu Dhabi operated its first flight from the new
Abu Dhabi International Airport Terminal A, one of the first national carriers
to fully move operations to the new world class facility.
▶ On 3rd January 2024, Wizz Air was awarded the World's Top 5 Safest
Low-Cost Airline Award by AirlineRatings.com.
▶ The UK's Civil Aviation Authority completed its review, confirming
Wizz Air is compliant with its customer commitments.
▶ With effect from 24 January 2024, Charlotte Pedersen will step down
from the Audit and Risk Committee and will be replaced by Phit Lian Chong.
ABOUT WIZZ AIR
Wizz Air, the fastest growing European ultra-low-cost airline, operates a
fleet of 197 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 60.3 million passengers in 2023. Wizz Air is listed on
the London Stock Exchange under the ticker WIZZ. The company was recently
named the World's Top 5 Safest Low-Cost Airlines 2024 by airlineratings.com
(https://eur02.safelinks.protection.outlook.com/?url=http%3A%2F%2Fairlineratings.com%2F&data=05%7C02%7CDorottya.Durucsko%40wizzair.com%7Ca810236eabdb400ec46108dc0dd4ab79%7Cc2639ec5cc6a45e99c332a332c564613%7C0%7C0%7C638400454267114610%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=Z5EspEQ96vziAudWqVPztmkg3XXqoZP6ymAGi6brE2g%3D&reserved=0)
, the world's only safety and product rating agency, and named Airline of the
Year by Air Transport Awards in 2019 and in 2023. Wizz Air has also been
recognised as the "Most Sustainable Low-Cost Airline" within the World Finance
Sustainability Awards in 2021-2023 and the "Global Environmental
Sustainability Airline Group of the Year" by the CAPA-Centre for Aviation
Awards for Excellence 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
- Ends -
Q3 Financial review
In the third quarter, Wizz Air carried 15.1 million passengers, a 22.1 per
cent increase compared to the same period in the previous year and generated
revenues of €1,064.8 million, 16.8 per cent higher year-on-year. These rates
compare to capacity increase measured in terms of ASKs of 26.9% and 16.9% in
terms of seats. The load factor increased by 0.3% to 87.6%. The reported net
loss for the third quarter was €105.4 million, compared to a profit of
€33.5 million in the same period of F23.
Summary statement of comprehensive income (unaudited)
For the three months ended 31 December
2023 2022
€ million € million Change
Passenger ticket revenue 553.9 464.7 19%
Ancillary revenue 510.9 447.0 14%
Total revenue 1,064.8 911.7 17%
Staff costs (126.9) (99.0) 28%
Fuel costs (506.6) (490.6) 3%
Distribution and marketing (29.4) (25.4) 16%
Maintenance, materials and repairs (69.4) (53.6) 29%
Airport, handling and en-route charges (301.8) (241.1) 25%
Depreciation and amortisation (199.0) (152.7) 30%
Net other expenses (12.0) (4.8) 150%
Total operating expenses (1,245.2) (1,067.2) 17%
Financial income 24.0 5.9 307%
Financial expenses (50.1) (38.1) 32%
Net foreign exchange gain 88.1 224.2 (61)%
Net financing income 61.9 192.0 (68)%
(Loss)/profit before income tax (118.4) 36.4 (425)%
Income tax credit/(expense) 13.0 (3.0) (534)%
(Loss)/profit for the period (105.4) 33.5 (415)%
(Loss)/profit for the period attributable to:
Non-controlling interest 7.7 (4.7) (264)%
Owners of Wizz Air Holdings Plc (113.1) 38.2 (396)%
Revenue
Passenger ticket revenue increased by 19.2% to €553.9 million and ancillary
income (or "non-ticket" revenue) increased by 14.3% to €510.9 million year
on year, driven by a 26.9% higher operated capacity in terms of ASKs and a
slightly improved load factor (increased by 0.3%). Against that total revenue
per ASK (RASK) decreased by 8.0% to 3.43 Euro cents from 3.73 Euro cents due
to lower ticket and ancillary prices.
Average revenue per passenger decreased to €70.38 during Q3 F24, which was
4.3% lower than last year, during the same period. Average ticket revenue per
passenger decreased from €37.5 in Q3 F23 to €36.6 in Q3 F24, and average
ancillary revenue per passenger decreased from €36.1 in Q3 F23 to €33.8 in
Q3 F24, representing a decrease of 6.4%.
Operating expenses
Operating expenses for Q3 F24 increased by 16.7% to €1,245.2 million from
€1,067.2 million in Q3 F23 mainly due to the year-on-year capacity growth.
The total cost per ASK (CASK) decreased by 8.9% to 4.10 Euro cents in Q3 F24
from 4.50 Euro cents in Q3 F23, driven mainly by lower fuel cost. Variable
costs increased broadly inline with higher operated capacity and growing
fleet, resulting in higher staff, airport, handling, en-route, depreciation
and maintenance charges. Net other expenses increased due to elevated flight
disruption charges stemming Israel crises and engine related disruptions.
Staff costs increased by 28.2% to €126.9 million in Q3 F24, up from €99.0
million in Q3 F23, reflecting the increase in capacity and the cost-of-living
adjustments to salaries year on year.
Fuel expenses increased by 3.3% to €506.6 million in Q3 F24, from €490.6
million in the same period of F23. The average fuel price (including hedge
impact) paid by Wizz Air during Q3 F24 decreased by 17.5% compared to the same
period of last year. On the top of that the consumption efficiency also
improved due to the increase of NEO fleet.
Distribution and marketing costs increased by 15.9% to €29.4 million in Q3
F24 from €25.4 million in Q3 F23 reflecting increased revenue in the period.
Maintenance, materials and repair costs increased by 29.4% to €69.4 million
in Q3 F24 compared to €53.6 million in Q3 F23 due to the larger fleet and
greater number of maintenance events.
Airport, handling and en-route charges increased 25.2% to €301.8 million in
Q3 F24 versus €241.1 million in the same quarter of the prior fiscal year in
line with the capacity growth.
Depreciation and amortisation charges increased by 30.3% in Q3 F24 to €199.0
million, from €152.7 million in Q3 F23. The increase is related to
depreciation on the growing fleet and higher aircraft utilisation, reaching an
average of 11:35 block hours per aircraft for the third quarter.
Other expense amounted to €12.0 million in Q3 F24, compared to €4.8
million in the same period of last fiscal year. Net other expenses increased
due to elevated flight disruption cost stemming from Israel crises and engine
related disruptions, offset in part by lower year-on-year gains from aircraft
and spare engine financing and contribution from Pratt & Whitney GTF
engine related compensation.
Financial income amounted to €24.0 million in Q3 F24, compared to €5.9
million in Q3 F23, driven by the increase in short-term cash deposits and
higher interest rate environment in Q3 F24.
Financial expenses amounted to €50.1 million in Q3 F24 compared to €38.1
million in Q3 F23, driven by the increase in fleet size, the higher interest
rate environment and the PDP financing.
Net foreign exchange gain was €88.1 million in Q3 F24, compared to a gain of
€224.2 million in Q3 F23. The change is driven by smaller movement in
foreign exchange rates as the Euro and US dollar remained more stable during
the period, compared to last year.
Income tax expense was a €13.0 million credit (Q3 F23: debit €3.0 million)
reflecting a negative profit before tax in the period. Since last year Wizz
Air has changed the corporate income tax residence of Wizz Air Hungary from
Swiss tax residence to Hungarian tax.
Net profit for the nine months ended on 31 December 2023 was €295.3 million
compared to a loss of €350.8 million in the same period of the last year.
Other information
1. Cash
Total cash and cash equivalents (including restricted cash and cash deposits
with more than 3 months maturity) at the end of the third quarter was
€1,691.7 million, of which over €1,589.2 million is free cash.
2. 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 are rolled forward monthly, 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.
In line with the hedging policy, Wizz Air is also hedging its US dollar
exposure related to fuel consumption.
Jet fuel hedge coverage
F24 F25 F26
Period covered 3 months 12 months 3 months
Exposure in metric tonnes ('000) 433 1,800 1,812
Coverage in metric tonnes ('000) 269 664 41
Hedge coverage for the period 62% 37% 2%
Coverage by hedge types:
Zero-cost collars in metric tonnes ('000) 269 664 41
Weighted average ceiling $ 914.0 $ 854 $ 838
Weighted average floor $ 797.0 $ 747 $ 728
EURUSD FX hedge coverage
F24 F25 F26
Period covered 3 months 12 months 3 months
Exposure, jet fuel related (million) 352 1,385 1,358
Hedge coverage (million) 227 503 34
Hedge coverage for the period 64% 36% 3%
Weighted average ceiling (EUR/USD) 1.11 1.14 1.14
Weighted average floor (EUR/USD) 1.07 1.09 1.09
Sensitivities
Pre-hedging, a $10 (per metric ton) movement in the price of jet fuel impacts
the Q4 F24 fuel costs by $3.6 million.
One cent movement in the EUR/USD exchange rate impacts the Q4 F24 operating
expenses by €3.7 million.
3. Fully diluted share capital
The figure of 127,712,796 should be used for the Company's theoretical fully
diluted number of shares as at 22 January 2024. This figure comprises
103,359,205 issued ordinary shares and 24,246,715 new ordinary shares which
would have been issued if the full principal of outstanding convertible notes
had been fully converted on 22 January 2024 (excluding any ordinary shares
that would be issued in respect of accrued but unpaid interest on that date)
and 106,876 new ordinary shares which may be issued upon exercise of vested
but unexercised employee share options.
4. 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.
Key statistics
For the three months ended 31 December
2023 2022 Change
Capacity
Number of aircraft at end of period* 195 173 12.7%
Number of operating aircraft at end of period* 180 173 4.0 %
Equivalent aircraft 190.9 170.8 11.8%
Equivalent operating aircraft 180.5 170.8 5.7 %
Utilisation (block hours per aircraft per day) 11:35 10:31 10.1%
Utilisation (block hours per operating aircraft per day) 12:15 10:31 16.4%
Total block hours 203,544 165,532 23.0%
Total flight hours 177,585 144,244 23.1%
Revenue departures 77,437 65,178 18.8%
Average departures per day per aircraft 4.41 4.15 6.3 %
Seat capacity 17,271,832 14,192,564 21.7%
Average aircraft stage length (km) 1,795 1,721 4.3 %
Total ASKs ('000 km) 31,002,145 24,421,506 26.9%
Operating data
RPKs ('000 km) 27,159,121 21,465,694 26.5%
Load factor % 87.6% 87.3% 0.3 %
Passengers carried 15,129,491 12,391,074 22.1%
Fuel price (average US$/mT, incl. hedging impact but excl. into-plane premium) 898.5 1,089.0 (17.5)%
Foreign exchange rate (average US$/€, including hedge impact) 1.078 1.02 5.7 %
* excludes UA aircraft
Cost per available seat kilometers (CASK)
For the three months ended 31 December
2023 euro cents 2022 euro cents Change
Euro cents
Fuel costs 1.63 2.01 (18.6)%
Staff costs 0.41 0.41 1.0%
Distribution and marketing 0.09 0.10 (8.7)%
Maintenance, materials and repairs 0.22 0.22 1.9%
Airport, handling and en-route charges 0.97 0.99 (1.4)%
Depreciation and amortisation 0.64 0.63 2.7%
Net other expenses/income 0.04 0.02 97.0%
Net financial income and expenses 0.08 0.13 (36.1)%
Total CASK 4.10 4.50 (8.9)%
Total ex-fuel CASK 2.47 2.49 (1.1)%
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, you 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.
This announcement includes inside information.
Glossary of terms and alternative performance measures (APMS)
Alternative performance measures are 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.
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, and short-term cash deposits.
Rationale - 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 - short-term cash deposits.
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 spare aircraft,
aircraft under maintenance and parked aircraft. Rationale - Key performance
indicator in aviation business for the measurement of average aircraft
available for flying and capacity.
Calculation (for 1 month): average from the daily fleet count in a 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.
Equivalent operating aircraft or average operating aircraft count: the average
number of operating aircraft available to Wizz Air within a period. The count
includes all aircraft except those parked. Rationale - Key performance
indicator in aviation business for the measurement of average fleet and
capacity.
Calculation (for 1 month): average from the daily operating 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
operating 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.
2023 2022
€ million € million
Operating loss (180.4) (155.5)
Depreciation and amortisation (199.0) (152.7)
EBITDA 18.7 (2.8)
Total revenue (€ million) 1,064.8 911.7
EBITDA Margin (%) 1.8% (0.3)%
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: Please see in the table under the definition of Net debt.
Operating aircraft utilisation: the number of hours that one operating
aircraft is in operation on one day. Rationale - Key performance indicator in
aviation business, measurement for one day aircraft productivity.
Calculation (for 1 month): average daily operating aircraft utilization in a
month equals total monthly block hours divided by number of days in the month
divided by the equivalent operating aircraft number divided by 24 hours.
Calculation (for a longer period than 1 month): the given period operating
aircraft utilization equals the weighted average of monthly operating aircraft
utilisation based on the month-end operating aircraft counts.
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.
Calculation: Please in the table below.
31 Dec 2023 31 Dec 2022
€ million € million
Cash and cash equivalents 1,506.9 756.6
Short-term cash deposits 82.3 481.3
Additional data to calculate liquidity
Total revenue for the 9 months ended 31 December 4,117.1 3,105.5
Total revenue for the 3 months ended 31 March 790.2 374.7
Total revenue for the rolling 12 months 4,907.4 3,480.2
Liquidity 32.4% 35.6%
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: 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.
31 Dec 2023 31 Dec 2022
€ million € million
Non-current liabilities
Borrowings 4,971.8 4,945.0
Convertible debt 25.7 27.0
Current liabilities
Borrowings 835.0 -
Convertible debt 0.5 -
Current assets
Short-term cash deposits 82.3 481.3
Cash and cash equivalents 1,506.9 756.6
Net debt 4,243.8 3,734.1
Additional data to calculate leverage ratio
EBITDA for the 9 months ended 31 December 896.8 215.0
EBITDA for the 3 months ended 31 March (74.5) (95.9)
Total EBITDA for the rolling 12 months 822.3 119.1
Leverage ratio 5.2 31.4
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.
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 spare, aircraft under maintenance
and parked aircraft. Rationale - Key performance indicator in aviation
business for the measurement of fleet.
Calculation: Sum of aircraft at the end of the given period.
Period-end operating aircraft: the number of operating aircraft that Wizz Air
has in its fleet and that is leased and/or owned at the end of the given
period. The count includes all aircraft except those parked. Rationale - Key
performance indicator in aviation business for the measurement of operating
aircraft at a period end.
Calculation: Sum of operating 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.
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: 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.
Calculation: Please in the table below.
31 Dec 2023 31 Dec 2022
€ million € million
Non-current assets
Restricted cash 34.3 43.1
Current assets
Restricted cash 68.3 86.1
Short-term cash deposits 82.3 481.3
Cash and cash equivalents 1,506.9 756.6
Total cash 1,691.7 1,367.1
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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END QRTUSUURSSUAUURRecent news on Wizz Air Holdings
See all newsREG - Wizz Air Holdings - F24 Post-close Trading Statement
AnnouncementREG - Wizz Air Holdings - Wizz Air Omnibus Plan award grants
AnnouncementREG - Wizz Air Holdings - March 2024 Traffic and CO2 Emission Statistics
AnnouncementREG - Wizz Air Holdings - Wizz Air Share Capital
AnnouncementREG - Wizz Air Holdings - Director/PDMR Shareholding
Announcement