easyJet Profits
Good news at easyJet given the circumstances:
Full Year Results for the year to 30 September 2009
RESILIENT PERFORMANCE; INCREASED YIELDS, PROFITS IMPACTED BY HIGHER FUEL COSTS
Results at a glance
2009 2008 Change
Total revenue (£ million) 2,667 2,363 12.9%
Profit before tax – underlying (£ million) 1 43.7 123.1 (64.5)%
Profit before tax – reported (£ million) 54.7 110.2 (50.4)%
Pre tax margin – underlying (%) 1 1.6% 5.2% (3.6)ppt
Return on equity (%) 5.5% 6.8% (1.3)ppt
Basic EPS - reported (pence) 16.9 19.8 (14.6)%
Total revenue per seat up 10.9% (4.1% at constant currency), driven by the strength of the easyJet network, competitor capacity reduction of around 6%, strong ancillary revenue performance and a 2.6% sector length increase
Passenger numbers up 3.4% to 45.2 million and load factor improved by 1.4ppt to 85.5%
Underlying profit before tax1 of £43.7 million delivered in line with expectation. The £79.4 million reduction in underlying pre-tax profit compared to the prior year is driven by a unit fuel cost increase equivalent to £86.1 million and interest income lower by £30.5 million
Operating costs2 per seat (excluding fuel and currency movement) increased by 3.9% for the full year. Total underlying cost per seat1 (excluding fuel and currency movement) up 6.2% partly driven by increased sector length, planned lower aircraft utilisation during the winter and a £30.5 million reduction in interest income
Significant progress on cost reduction initiatives: 19 expensive aircraft exited from the fleet; systems implemented; renegotiation of our maintenance arrangements with SRT to deliver savings of around £175 million over the 11 year life of the contract
easyJet’s position in European short-haul aviation has strengthened with market share gains in a number of valuable markets such as Paris, London Gatwick, Milan and Madrid and over a 10% increase in slots at capacity constrained airports
Sufficient resources in place through a combination of undrawn committed facilities and surplus cash to fund future aircraft deliveries for at least the next 18 months
Forward bookings broadly in line with prior year
Note 1: Underlying financial performance excludes an £11.0 million profit on the disposal of three aircraft in 2009 and £12.9 million of costs associated with the integration of GB Airways in 2008.
Note 2: Excludes interest income.
Commenting on the results, Andy Harrison, easyJet Chief Executive said:
“This is an extremely resilient performance making easyJet the best performing European airline based on our robust yields. We are one of the very few European airlines to make a profit during the last 12 recessionary months. This is a tribute to the strength of our business model and the quality of our people and our network. We offer the best prices to the most convenient airports.
We see a tough winter ahead. We are focussing our efforts on further cost savings and efficiency improvements together with optimising route profitability and aircraft allocation. We shall also benefit as our fuel hedges adjust to market prices. Putting all this together, at current fuel prices and exchange rates, we expect easyJet to make substantial profit improvement in 2010.”
Note 3: US$1.67/£, €1.12/£ and US$657 per metric tonne at 13 November 2009