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Wizz Air lifts FY profit guidance after strong Q3

By Michele Maatouk

Date: Wednesday 29 Jan 2020

Wizz Air lifts FY profit guidance after strong Q3

(Sharecast News) - Low-cost airline Wizz Air lifted its full-year net profit guidance on Wednesday as it reported record profit for the third quarter.
The company said it now expects net profit of between €350m and €355m in 2020, up from previous guidance of between €335m and €350m.

In an update for the three months to the end of December, Wizz said revenue rose 24.6% to €637.3m as it swung to a net profit of €21.4m from a loss of €21m in the same period the year before.

Passenger numbers grew 23.2% to 10 million, with ticket revenues up 15.5% to €336.3m and ancillary revenues 36.7% higher at €301.1m.

Chief executive József Váradi said it had been "another quarter of significant achievement".

"As previously announced at our H1 results, Wizz Air has reinvested some of its outperformance of the first half in the third quarter, and will grow even faster in the fourth quarter, delivering an industry leading growth rate of 24%.

"The company will benefit from this additional growth in the next financial year as new routes will be in place ahead of the all-important summer period. Wizz Air also confirms that the current trading conditions continue to be favourable with a relatively benign competitive environment, stable fuel prices and a positive yield environment. Despite our additional investment in growth in the fourth quarter, the Company is today raising its net profits guidance."

At 0940 GMT, the shares were up 1% at 4,149p.

Russ Mould, investment director at AJ Bell, said: "Budget airline Wizz Air's boost to annual profit guidance may have been expected by the market after both Ryanair and easyJet released buoyant updates in recent weeks.

"The central and Eastern Europe focused carrier is looking to build on a strong third quarter performance, with recent investment in expanding its services expected to provide a boost in the fourth quarter and into the next financial year.

"The growth story is built on increased passenger numbers but also on rising ancillary income - representing the charges levied for extras such as excess baggage or seat booking.

"This accounts for a much bigger proportion of the company's overall revenue than its rivals. Ancillary income is stable unlike fluctuating passenger fares, so this is positive for the business, however it could ultimately backfire if it alienates potential fliers."

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