Easyjet share price drops as it widens losses to £236m in first half due to weaker pound

 
Caitlin Morrison
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Easyjet widened its losses in the first half of 2016 (Source: Getty)

Easyjet today revealed a £236m loss for the six months to 31 March, and said the balance sheet took a hit due to currency fluctuations during the period.

The figures

The budget airline reported a headline loss of £212m, compared to the £21m loss posted this time last year.

Total losses were £236m, widening from £18m in the first six months of 2016.

Revenue rose 3.2 per cent to £1.83bn from £1.77bn.

Load factor - a measure of how much of the airline's capacity was used - hit a record first half high of 90.2 per cent, up from 89.7 per cent last year.

Easyjet also reported a nine per cent increase in passenger numbers, which rose from 31m to 33.8m.

Shares in the airline dropped 4.5 per cent as the market opened.

Why it's interesting

Chief executive Carolyn McCall said the first half loss was in line with market expectations and blamed it on "the movement of Easter into the second half as well as currency effects which together had an estimated impact of circa £127m on the bottom line".

Easyjet warned in January that the weaker pound would eat into profits, and in its results today the company said the negative net currency impact was £82m.

The firm expects an improvement in the second half of the year - McCall said bookings for the summer are ahead of last year, "showing that demand to fly remains strong and reflects growing evidence that consumers are prioritising expenditure on flights and holidays above other non-essential items".

What Easyjet said

McCall said the airline had "delivered a resilient performance during the winter months with strong cost control, improving operational performance and within guidance for revenue".

Looking ahead, we are seeing an improving revenue per seat trend as well as the continued reduction of competitor capacity growth.

"Cost performance for the full year will continue to be strong," she added.

"Easyjet is delivering on its strategy of purposeful investment in securing and building strong positions at Europe's leading airports which is driving competitive advantage with sustainable returns. As a result our expectations for the full year are in line with current consensus market expectations."

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