Wizz Air - Small Beat At EBIT Level, Demand Remained Resilient
Small beat at EBIT level, demand remained resilient
- Wizz Air reported better than expected operating results for fiscal Q2/23 today, BMO. Revenues came in at EUR 1,385mn in the Sept-Q, which was a touch lower compared to the cons. est. of EUR 1,390mn. However, Wizz reached an EBITDA of EUR 372mn during the peak summer period, which resulted in a 4% beat vs. consensus estimate, but -2% vs. Concorde. At the bottom line, Wizz reported a net profit of EUR 77.5mn (+19% vs. consensus and -22% vs. Concorde) due to the massive unrealized FX loss related to the revaluation of USD-denominated items on the balance sheet. Wizz ended the quarter with a cash level of EUR 1.63bn, of which EUR 1.49bn is non-restricted cash. This may come as a surprise to the upside.
- Key positives: (1) resilient demand for air travel, (2) high cash level, (3) RASK guidance is better than our flat expectation for H2, (4) solid ancillary performance.
- Key negatives: (1) elevated leverage (ND stood at EUR 3.5bn, translates into an 4.5x ND to 2019 EBITDA), (2) rising ex-fuel CASK, (3) inefficient hedges.
Wizz Air Holding is a European airline. As of Mar 31 2017, Co. provided more than 500 routes from 28 bases, connecting 141 destinations across 42 countries. Co. has two reportable segments: the airline and the tour operator business units, marketed under the Wizz Air and Wizz Tours brand names, respectively. Wizz Air sells flight tickets and related services to external customers and, to an extent, to Wizz Tours. Wizz Tours sells travel packages to external customers covering the network of Wizz Air.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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