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Wizz Air reports record profit and no signs of Brexit hit
May 25, 2017 / 9:04 AM / 4 months ago

Wizz Air reports record profit and no signs of Brexit hit

A Wizz Air Airbus 320 aircraft lands at the Chopin International Airport in Warsaw, Poland May 17, 2016. REUTERS/Kacper Pempel

(Reuters) - Wizz Air Holdings (WIZZ.L) reported a 28 percent rise in full-year profit on Thursday and said it had seen no signs of demand for flights weakening since Britain voted to leave the EU, helping to send its shares to a record high.

Shares in the London-listed airline that focuses on flights to central and eastern Europe jumped as much as 11 percent to a high of 2,166 pence, with analysts also saying its profit forecast for the current financial year was above consensus.

The company has faced increased pressure on pricing since larger low-cost airlines easyJet (EZJ.L) and Ryanair (RYA.I) added more capacity to rival routes, taking advantage of weak oil prices to try to capture market share.

Wizz Air said its profit for the 12 months to the end of March rose to a record 246 million euros (213.3 million pounds) from 193 million euros a year earlier while revenue climbed 10 percent to 1.57 billion euros.

For the financial year ending in March 2018, Wizz Air forecast net profit in a range of 250 million euros to 270 million, though it warned that the estimate would depend heavily on revenue earned in the busy summer period and its second half.

“The trading environment experienced in the 2017 financial year of very low fares and increasing fuel prices unquestionably favoured our ultra-low-cost business model and we were able to increase our growth rate,” Chief Executive József Váradi said.

Analysts at RBC said while the full-year results were in line with expectations, the profit forecast was 8 percent to 10 percent above the current market consensus.

“This guidance is heavily caveated by the revenue performance for the all-important summer period as well as the second half of the 2018 financial year, a period for which we currently have limited visibility,” Váradi said.

Wizz Air said the number of passengers it carried increased 19 percent to 23.8 million during the year and it planned to boost capacity to carry nearly 30 million in the current financial year.

The load factor, a measure of how full its planes were, rose to 90.1 percent from 88.2 percent.

Wizz Air also said the decline in sterling since the Brexit vote in June 2016 translated into a 17 million euro hit on revenue earned in pounds, but that was absorbed by the rest of its route network.

Reporting by Tenzin Pema and Arathy S Nair in Bengaluru; editing by David Clarke

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