easyJet shares hit by £212m interim loss
Strong passenger and revenue growth failed to prevent easyJet’s pre-tax loss hitting £212 million for the six months to March 31 despite rigorous cost controls – or a knock-on hit to the Luton carrier’s UK share price. The stock fell almost four per cent (52p) to 1,258p just after the results were posted.
Chief executive Carolyn McCall said full-year results were likely to meet market expectations and remained bullish for the future.
easyJet reported record passenger numbers for the period at 33.8 million; this was up nine per cent year-on-year with a record first half load factor at 90.2 per cent. Capacity increased by 8.4 per cent.
Total revenue was 3.2 per cent higher at £1.827 billion; the headline loss before tax of £212m includes the estimated impact of the move of Easter into the second half of the year (circa £45m) and a negative net currency impact of £82m.
Excluding these two items the headline loss before tax would have been circa £85 million. Total loss before tax after non-headline items was £236 million.
easyJet says it is investing in the future. It has agreed to buy 30 A321 NEO aircraft under its existing agreement with Airbus, with the first arriving in summer 2018.
easyJet remains on track to confirm possession of a European Air Operator Certificate (AOC) by the summer and so secure its future operations within the European Union.
The company retains what it calls a “sector leading balance sheet strength,” with net cash of £353m. Forward bookings are ahead of last year; at 77 per cent for the third quarter and 55 per cent for the half year.
McCall said: “easyJet delivered a resilient performance during the winter months with strong cost control, improving operational performance and within guidance for revenue.
“The first half loss is in line with market expectations and reflects the movement of Easter into the second half as well as currency effects which together had an estimated impact of circa £127m on the bottom line.
“Our bookings for the summer are ahead of last year, showing that demand to fly remains strong and reflects growing evidence that consumers are prioritising expenditure on flights and holidays above other non-essential items.
“Looking ahead, we are seeing an improving revenue per seat trend as well as the continued reduction of competitor capacity growth. Cost performance for the full year will continue to be strong; our expectations for the full year are in line with current consensus market expectations.”