Wizz Air shares soar despite revenue warning

(Sharecast News) - Shares in Wizz Air soared on Thursday despite a warning that full-year revenues would fall, as a forecast-busting increase in interim profits and cost cutting measures taken so far were well received by investors. The Hungary-based airline forecast a revenue decline in the low-single-digits, citing short-term challenges in winter capacity. Operating profit jumped 25.8% to €439.2m, smashing estimates of €367m. Wizz shares rose more than 8%.

"We will see the most significant changes to our delivery profile in around 12 months time (given near-term orders and financing commitments)," said chief executive Jozsef Varadi.

"As such, we are actively managing this winter season's capacity to deliver circa mid-teens H2 seat capacity growth year on year. In terms of pricing, looking at the current ninety-day booking curve, we are seeing unit revenue approximately down low single digits percentage-wise year on year while the load factor, conversely, is up by a similar level in terms of a percentage points gain."

The company last week delayed delivery of 88 Airbus jets to 2033 from 2030 as it looked to cut costs. Wizz has been hit by an issue with Pratt and Whitney engines with repairs taking longer than expected, and political turmoil the Middle East and Eastern Europe.

Reporting by Frank Prenesti for Sharecast.com