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(Alliance News) - Wizz Air Holdings PLC on Thursday said its revenue had more than doubled in a year of "significant growth" as it reported a narrowed annual loss.
Davy Research said the results were "solid" and implied an upside to consensus estimates of Wizz Air's prospects for the new financial year.
"While the market will be sensitive to the precise cost trajectory in the year, the direction of travel is clearly positive," the Dublin broker said.
For its financial year ended March 31, the Budapest-based budget airline's pretax loss narrowed by 12% to EUR564.6 million from EUR641.5 million the previous year.
Revenue more than doubled to EUR3.90 billion from EUR1.66 billion the prior year. Wizz Air said this was due to an 88% increase in the number of passengers it carried, rising to 51.1 million from 27.1 million the prior year.
Peel Hunt analyst Alexander Paterson said the results were "slightly worse" than expected.
Peel Hunt had expected revenue of EUR3.897 billion, versus the achieved EUR3.895 billion. However, it was fuel costs and the company's operating loss that really disappointed the London broker.
Fuel costs of EUR1.95 billion and ex-fuel costs of EUR2.41 billion were both around EUR24 million higher than Peel Hunt had anticipated, meaning that Wizz Air's operating loss of EUR466.8 million was around EUR50 million more than the broker had assumed.
More positively, Peel Hunt noted that expectations for financial 2024 were in line with its own expectations. Wizz Air said on Thursday that it expects net profit to be in the range of EUR350 million and EUR450 million in the new financial year. In financial 2023, Wizz Air reported a net loss of EUR535.1 million.
Neil Shah, director of research at Edison Group, said Wizz Air's "impressive" results were driven by robust travel growth to Western Europe and the Middle East, where an increasing demand for these regions is following a market trend.
"The strong passenger numbers demonstrate the resilience and growing confidence in travel as people resume their journeys. As the height of summer travelling is upon us, Wizz Air is poised to continue delivering strong financial results into the following year."
Russ Mould, investment director at AJ Bell, added that there was a "lingering feeling" that Wizz Air is "aiming for the stars", despite having already invested in more aircraft. For Mould, that meant acquisitions could be on the agenda.
"Even though it is still losing money, the company's performance during and post-pandemic is probably strong enough to convince shareholders that its growth plans are working, and so it might have enough support to raise a significant amount of money to turbocharge that growth through a corporate deal.
"easyJet [PLC] has previously been seen as the logical takeover target for Wizz and there is still merit in parking the two companies together, although Wizz would need to make a generous offer if it wants to stand a chance of sealing a deal. Owning easyJet would give Eastern Europe-focused Wizz Air a greater presence in the Western European market and a position in the package holidays industry."
Shares in Wizz Air were up 1.8% at 2,828.00 pence on Thursday morning in London. easyJet was up 0.9% at 492.67p.
By Heather Rydings, Alliance News senior economics reporter
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