Disappointing Q4, gorgeous outlook, but challenges remained - we lift our TP to GBP 23.9

Wizz Air reported worse than expected results for FY23, today BMO. Net loss came in at
EUR 535mn on revenues of 3.9bn for fiscal 2023, below both consensus (EUR -508mn) and
our estimates (EUR -468mn) on weak Q4 revenue performance. However, the Company
expects net profit for FY24 to be in the range between EUR 350-450mn, significantly ahead
of our recent estimate of 231mn and consensus estimate of EUR 343mn. Trading
performance in fiscal Q1 (Apr-Jun) is said to be strong with attractive pricing and load
factors (note: we disagree with the latter statement as LFs were only at 90.9% and 90.2%
in April and May, resp.). Wizz expects to grow by 30% both in H1 and H2 in ASK terms,
broadly in line with our estimates.
 Total revenue increased by 134% to EUR 3.9bn, compared to EUR 1.7 million in FY22.
EBITDA was positive at EUR 134mn, an increase by EUR 158mn over a loss in FY22. EBIT
loss was broadly flat at EUR 467mn in FY23 compared to EUR 465mn in FY22. Net
financial expenses decreased to EUR 98mn, compared to EUR 176mn recorded in FY22,
while net FX gain for FY23 was EUR 17mn, compared to a loss reported in FY22 of
EUR90mn. Total cash at the end of March 2023 was EUR 1.5bn (of which EUR 120mn was
restricted cash).
 Key positives: (1) very upbeat guidance as net profit forecast was well above our and
consensus estimate. (2) Wizz has ample liquidity, so financial issues are not relevant in the
next 3-6 months given the significant WK inflow in the next 1-2 months (peak summer prebooking).
 Key negatives: (1) industry challenges (including Ukraine war, inflation, supply-chain
backlogs, infrastructure limits, labor market constraints or weather) remained and the
guidance looks too optimistic given the limited visibility for H2. (2) Though Wizz don’t have short-term financial problems, they will repay roughly 1.3bn within 12 months so Wizz will
need to tap capital markets and financing costs should jump significantly, as we predicted
in our recent notes. (3) Effective tax rate will also be significantly higher (from 5% to 10%).