Historic drop: Wizz Air’s share price collapses after weak interim report
The market reacted to Wizz Air’s latest interim report with a dramatic drop in prices: due to investor disappointment, the airline’s shares fell by up to 26 percent during the day. The reason for the steep drop is that the company’s profit fell by 41.5 percent, while its operating profit fell by more than 60 percent compared to the same period last year, Portfolio wrote.
No forecast, no confidence
Investors were particularly concerned that the company did not provide a forecast for either the next quarter or the full financial year, which suggests significant uncertainty. Although the company’s CEO tried to emphasize Wizz Air’s resilience and adaptability, this was not enough to maintain market confidence.
The share price fell by 23 percent shortly after the report was published, and during the day the decline reached 26 percent – a drop of this magnitude that has not been seen for Wizz Air shares in years.
Revenues increased, but costs rose even faster
Although the airline carried 63.4 million passengers last year – a slight increase compared to the previous year – and revenues also rose to 5.3 billion euros, the positive trend was offset by the increase in expenses. In particular, non-fuel costs rose significantly, by almost 20 percent, which significantly affected the company’s operating efficiency.
Performance also deteriorated at the EBITDA level: a 4.9 percent decline from 1.1 billion euros, which further worsened investor sentiment.
Uncertain outlook, wave of sales
The company’s management talked about structural development, the arrival of new aircraft and a strategic strengthening of its position, but these messages could not offset the weak results and the lack of information about the outlook. The loss of confidence triggered a rapid wave of sales, so that Wizz Air’s share price sank to a historic low.
The situation is also particularly sensitive for market players preparing for the summer travel season, as there is already increased uncertainty in the aviation sector, just think of the threat of strikes at Ferihegy or European airports struggling with capacity problems.
Related news
Fitch Ratings downgrades Wizz Air’s holding company
Fitch Ratings has downgraded the holding company of Wizz Air.…
Read more >Wizz Air resumes flights to Israel
Wizz Air will resume its flights between Tel Aviv and…
Read more >Wizz Air rejects allegations of hidden costs
As the summer travel season gets underway, the spotlight is…
Read more >Related news
Five major trends shaping the future of global business service centers
Leading global business services providers are responding to the challenges…
Read more >Pepco’s German subsidiary placed under bankruptcy protection
Pepco’s German division has filed for insolvency, despite the retail…
Read more >Blue Planet: food waste should be utilized as biogas or feed raw material even in the short term
Food waste should be utilized as biogas or feed raw…
Read more >