TIDMEZJ
RNS Number : 3685V
easyJet PLC
14 April 2021
14 April 2021
easyJet plc
('easyJet')
easyJet Trading Update for the Six Months ended 31 March
2021
easyJet's H1 2021 results are slightly better than expectations
and it maintains significant liquidity while also delivering Q2
cash burn better than guidance.
easyJet is encouraged by the strong vaccination rollout in the
UK and expects the European rollout to pick up pace in the coming
weeks, so is looking forward to taking customers on a long-awaited
holiday this summer.
Summary
easyJet has operated a disciplined flying programme over the
winter months whilst continuing to deliver a major restructuring
and cost reduction programme. As a result, easyJet expects a first
half headline loss before tax in the range of GBP690 to GBP730
million, which is slightly better than expectations . The effects
of the cost-out programme will support improved margins and reduce
seasonality for the future. Our capacity forecasting has been
accurate and disciplined throughout the pandemic, which has allowed
for strong cost control. Our focus on cash generative flying over
the winter season has minimised cash burn, with cash burn in the
second quarter better than guidance.
As at 31 March 2021 easyJet has unrestricted access to c.GBP2.9
billion of liquidity having raised over GBP5.5 billion since the
beginning of the pandemic(1) , and is well positioned to capitalise
on the recovery of travel once restrictions are eased across the
network.
easyJet has maintained a high level of operational flexibility
to respond to rapidly-changing travel restrictions. We will
continue to operate a reduced schedule throughout much of Q3 but
are ready to ramp up our operations to match the level of demand we
see in the market.
Johan Lundgren, CEO of easyJet, said:
" easyJet has maintained a disciplined approach to flying during
the first half of our financial year, resulting in a first half
loss and cash burn better than expectations. We continue to have
access to significant levels of liquidity alongside easyJet's major
cost-out programme which continues to deliver ongoing cost and
efficiency benefits. All of this positions us well to lead the
recovery.
"We welcome the confirmation by the UK Government that
international travel is on track to reopen as planned in mid-May.
easyJet was founded to make travel accessible for all and so we
continue to engage with Government to ensure that the cost of the
required testing is driven down so that it doesn't risk turning
back the clock and make travel too costly for some.
"We continue to closely monitor the situation across Europe and
with vaccination programmes accelerating, most countries are
planning to resume flying at scale in May. We have the operational
flexibility to rapidly increase flying and add destinations to
match demand. easyJet is ready to resume flying, prepared for the
ramp up and looking forward to being able to reunite people with
their families or take them on leisure and business flights once
again. As a result, we remain well-positioned for the recovery this
summer and beyond."
Revenue
Passenger numbers(2) for the six months ending 31 March 2021
decreased by 89% to 4.1 million, in line with a decrease in
capacity(3) to 6.4 million seats, representing 14% of H1 2019
capacity levels. This led to total group revenue for the six months
ending 31 March 2021 decreasing by c.90% to c.GBP235 million, with
passenger revenue decreasing by c.91% to c.GBP165 million and
ancillary revenue decreasing by c.87% to c.GBP70 million.
Cost & Cash Burn
Group headline costs excluding fuel for the first half decreased
by c.59% to c.GBP845 million, driven by a decrease in capacity
flown and the material savings achieved across many areas of the
business from easyJet's major cost-out programme. easyJet
maintained a disciplined approach to capacity and cash management
and as a result, total cash burn during the second quarter was
c.GBP470 million, which is better than previous guidance.
The structural cost-out programme we announced last year,
easyJet's largest ever, is on track to achieve our targeted cost
savings and will position easyJet well to lead the recovery in
aviation.
Capacity
During the first half easyJet flew 14% of H1 2019 capacity, in
line with our expectations. Our capacity forecasting has been
accurate and disciplined throughout the pandemic, which has helped
deliver strong cost control.
January February March 2021 Q2
2021
2021 2021
Passengers (thousand)
(2) 456 367 405 1,228
-------- --------- ----------- ------
Seats flown (thousand) 787 612 663 2,062
-------- --------- ----------- ------
% of 2019 capacity flown 12% 9% 8% 9%
-------- --------- ----------- ------
Load factor (4) 58% 60% 61% 60%
-------- --------- ----------- ------
Network
easyJet remains disciplined in focussing on profitable flying.
Our operations, financial and commercial teams are running dynamic
schedule updates, on a regular basis, in order to capitalise on all
available demand. We retain significant operational flexibility to
enable us to capture pent-up demand and are able to ramp up flying
quickly when demand returns.
Flexibility
easyJet's market-leading flexible customer policies are driving
trust and confidence to book. We are offering more flexibility than
ever before. Our Protection Promise for both flights and holidays
means that customers can book now with the confidence that if their
plans change, so can their booking.
Ancillaries
Ancillary revenues represent a significant opportunity for
easyJet to increase revenue per seat and margins in the coming
years.
In January easyJet launched a new fare class called Standard
Plus, which is performing well. Our new cabin bag policy came into
effect in February and early indications show that this is also on
track relative to our revenue expectations, as well as having a
positive effect on our On Time Performance metrics. The ability to
bring a large overhead cabin bag on board is now bundled with Up
front and Extra legroom seating. The seating and bag packages are
actively yield managed and dynamically priced from GBP7.99.
Balance Sheet & Liquidity
easyJet has taken swift and decisive action successfully raising
over GBP5.5 billion in liquidity since the beginning of the
pandemic(1) , from a diversified range of funding sources.
In March easyJet's subsidiary easyJet FinCo B.V. issued a EUR1.2
billion bond under our Euro Medium Term Note (EMTN) programme. The
bond matures in March 2028 and has a coupon of 1.875%. There was
good market appetite for the bond, which was heavily
oversubscribed. easyJet continues to maintain access to a diverse
range of funding sources and continues to review its debt maturity
profile.
As at 31 March 2021 easyJet has unrestricted access to c.GBP2.9
billion of liquidity, comprising cash and cash equivalents, money
market funds, money market deposits plus the undrawn portion of the
UKEF facility. The first GBP300 million tranche of easyJet's
borrowings from the CCFF was repaid in March 2021 and the remaining
GBP300 million is due in November 2021. easyJet has no other debt
maturities outstanding until FY 2023.
We retain ownership of 56% of the total fleet, with 41%
unencumbered. Sale and leaseback transactions on 23 aircraft were
concluded during H2 2020, raising GBP608 million gross proceeds and
adding c.GBP50 million to pro forma per annum headline costs.
During H1 2021 transactions were concluded on 35 aircraft, raising
GBP842 million gross proceeds and adding a further c.GBP90 million
to pro forma per annum headline costs.
As previously indicated, easyJet will continue to review its
liquidity position on a regular basis and will continue to assess
further funding opportunities.
Fuel & FX hedging
Due to the sustained lower capacity expected for several months
ahead, easyJet has continued to see hedge ratios moving over 100%
from both a jet fuel and FX perspective. To mitigate the effects of
this, easyJet has taken action to close out over-hedge positions,
to mitigate its exposure to volatility in the fair value of
discontinued hedges. easyJet continues to hedge contractual
exposures (such as leases and capex) and has decreased the amount
of operational hedging that is taken out for future periods until
there is greater clarity around exposures.
Non-Headline Items
Non-headline items for the six months ending 31 March 2021 are
expected to reflect a net c.GBP55 million credit. This is comprised
principally of gains related to sale and leaseback transactions,
with a net charge related to fuel hedge discontinuation being
largely offset by a release of restructuring provisions. The
release of restructuring provisions is based on current
expectations of our latest discussions with unions, on which we
will provide a further update at the half year results. This will
be subject to review by our auditors.
Outlook
Based on current travel restrictions in the markets in which we
operate, easyJet expects to fly up to 20% of 2019 capacity levels
in Q3 with an expectation that capacity levels will start to
increase from late May onwards. We maintain significant flexibility
to ramp capacity up or down quickly depending upon the unwinding of
travel restrictions and expected demand across our European
network.
The group headline loss before tax for the six months ending 31
March 2021 is expected to be in the range of GBP690 to GBP730
million.
The group reported loss before tax is expected to reflect the
positive impact of the non-headline items discussed above.
easyJet will release half year results for the six months ending
31 March 2021 on 20 May 2021.
At this stage, given the continued level of short-term
uncertainty, it would not be appropriate to provide any further
financial guidance for the 2021 financial year. Customers are
booking closer to departure and visibility remains limited.
KEY H1 FINANCIALS
Six months ended 31 March 31 March Change
2021 2020 Fav./(adv.)
Number of flights 35,100 244,235 (85%)
---------- --------- -------------
Peak operating aircraft 161 318 (49%)
---------- --------- -------------
Passengers (thousand) (2) 4,086 38,566 (89%)
---------- --------- -------------
Seats flown (thousand) 6,412 42,702 (85%)
---------- --------- -------------
Load factor (4) 63.7% 90.3% (26.6ppts)
---------- --------- -------------
Total group revenue (GBP million) c.235 2,382 (90%)
---------- --------- -------------
Passenger revenue (GBP million) c.165 1,833 (91%)
---------- --------- -------------
Ancillary revenue (GBP million) c.70 549 (87%)
---------- --------- -------------
Total group headline cost (GBP
million) (c.940) (2,575) 64%
---------- --------- -------------
Group headline profit/(loss)
before tax (GBP million) (690-730) (193) (497-537)
---------- --------- -------------
For further details please contact easyJet plc :
Institutional investors and analysts:
Michael Barker Investor Relations +44 (0) 7985 890 939
Holly Grainger Investor Relations +44 (0) 7583 101 913
Media:
Anna Knowles Corporate Communications +44 (0) 7985 873 313
Edward Simpkins Finsbury +44 (0) 7947 740 551 / (0) 207 251 3801
Dorothy Burwell Finsbury +44 (0) 7733 294 930 / (0) 207 251 3801
A copy of this Trading Statement is available at
http://corporate.easyjet.com/investors
Notes:
1. Liquidity raised during the pandemic of over GBP5.5 billion
comprises c.GBP0.4 billion from drawing down an existing Revolving
Credit Facility, c.GBP0.4 billion from two term loans, c.GBP0.6
billion from the UK Government's Covid Corporate Financing
Facility, c.GBP1.4 billion in sale and leaseback transactions,
c.GBP1.4 billion from UK Export Finance facility, c.GBP1.0 billion
from corporate bond issuance and c.GBP0.4 billion in equity
issuance .
2. Represents the number of earned seats flown. Earned seats
include seats that are flown whether or not the passenger turns up
as easyJet is a no-refund airline, and once a flight has departed a
no-show customer is generally not entitled to change flights or
seek a refund. Earned seats also include seats provided for
promotional purposes and to staff for business travel.
3. Capacity based on actual number of seats flown.
4. Represents the number of passengers as a proportion of the
number of seats available for passengers. No weighting of the load
factor is carried out to recognise the effect of varying flight (or
"sector") lengths.
5. All comparisons of financial performance in this statement
are year-on-year, comparing Financial Year 2021 with Financial Year
2020. Comparisons of capacity however are made relative to
Financial Year 2019 levels.
6. All numbers in this statement are provisional and are subject
to review by our auditors.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTIJMMTMTMBTPB
(END) Dow Jones Newswires
April 14, 2021 02:00 ET (06:00 GMT)
Easyjet (LSE:EZJ)
Historical Stock Chart
From Jul 2024 to Aug 2024
Easyjet (LSE:EZJ)
Historical Stock Chart
From Aug 2023 to Aug 2024