easyJet Delivers Record Performance Over the Summer; To Reinstate Dividends -- Update

By Anthony O. Goriainoff

easyJet delivered a record financial performance over the summer, allowing for the resumption of dividends and said it expects to report a rise in headline pretax profit for the fourth quarter of fiscal 2023 as demand has remained strong.

The low-cost carrier also said Thursday that booking momentum continuing into fiscal 2024 allows it to set new medium-term targets, which include achieving a pretax profit per seat of around 7 pounds to 10 pounds ($8.62 to $12.31).

This will be driven by reducing winter losses, increasing its capacity and updating its fleet, as well as growing easyJet holidays, it said.

The airline added that on-year ticket yields are ahead with load factors--a measure of how full a plane is--broadly inline, and that the fourth-quarter load factor was flat at 92% for the period.

For the first quarter of fiscal 2024, easyJet said it expects capacity to be 15% ahead on year.

The company said it has agreed to purchase an additional 157 Airbus airplanes and has a further 100 purchase rights. This is expected to result in a commitment of around $19.9 billion, to be spread over a number of years, and the aggregate actual price for aircraft would be substantially lower due to price concessions granted by Airbus. It added the purchases are conditional on shareholder approval.

"In addition to the delivery of our strategy, these targets are integral to achieving easyJet's ambition to deliver more than GBP1 billion pretax profit," it said.

The airline said headline pretax profit--a key measure for the airline, which strips out exceptional and other one-off items--for the quarter ended Sept. 30 is expected to be between GBP650 million and GBP670 million.

Headline pretax profit for the fiscal year is expected to be in the GBP440 million to GBP460 million range. Consensus for headline pretax profit is GBP463.3 million, taken from FactSet and based on 10 analysts' forecasts. The company reported a headline pretax loss of GBP178 million for fiscal 2022.

Revenue for the fourth quarter is expected to be around GBP3.12 billion compared with GBP2.52 billion.

The board said it expects to pay a dividend which will be 10% of fiscal 2023's headline profit after tax, and that this is expected to rise to 20% in fiscal 2024.

Write to Anthony O. Goriainoff at [e-mail]

(END) Dow Jones Newswires

October 12, 2023 03:59 ET (07:59 GMT)

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