Wizz Air lowers FY guidance, Q1 profits disappoint

(Sharecast News) - Low-cost carrier Wizz Air slashed full-year guidance on Thursday as it revealed Q1 profits had nearly halved.

Wizz Air said operating profits had fallen 44.2% in the three months ended 30 June, principally due to higher depreciation costs and wet lease costs incurred as it moved to protect routes during GTF engine-related groundings. Net profits crashed 98% to €1.2m.

As a result, Wizz lowered its annual net income guidance to €350.0m-400.0m from €500.0m-600.0m.

On the other hand, Wizz Air said underlying earnings were up 16% at €274.6m and a 1.8% uptick in revenues to €1.2bn.

Wizz also posted a nearly 20% increase in its fleet size to 218 aircraft during Q1 and, despite a 1.2% reduction in available seat kilometres capacity, load factor remained stable at 91.0%. Passenger numbers were 0.5% higher, with 15.35m passengers boarding Wizz's planes throughout the quarter.

Chief executive József Váradi said: "Despite the competitive landscape and ongoing supply chain challenges, our strategic focus on delivering the lowest fares, improving our route network, and maintaining high operational efficiency has yielded results.

"Capacity is stabilising and we are focusing on further optimising our operations, with an emphasis on improving our most profitable bases and enhancing efficiency.

As of 1045 BST, Wizz shares sunk 12.75% at 1,669.0p.

Reporting by Iain Gilbert at Sharecast.com