Wizz Air Holdings PLC (AIM:WIZZ) shares slipped lower after it lowered its annual profit guidance after a drop in operating profit.
The company's EBITDA showed a robust growth of 16.0%, reaching €274.6 million, driven by improved operational efficiency and strategic cost management.
However, operating profit declined by 44.2% to €44.6 million, impacted by higher depreciation costs and wet lease expenses related to engine groundings.
This led to the budget airline lowering its annual net income forecasts to €350 million to €450 million, down from its previous forecast of €500 million to €600 million.
Wizz Air reported a nearly 20% increase in its fleet size during the first quarter, with the airline now owning 218 aircraft.
Despite a 1.2% reduction in available seat kilometres (ASK) capacity, the load factor remained stable at 91.0%.
Passenger numbers were slightly up, with 15.35 million passengers carried during the quarter, marking a 0.5% increase from the previous year.
Total revenue rose by 1.8% to €1.2 billion, reflecting the sustained demand for Wizz Air's services.
Net profit experienced a significant drop of 98.0%, falling to €1.2 million, primarily due to unrealized foreign exchange losses.
Despite these challenges, Wizz Air's total cash reserves increased by 15.7% to €1,838.4 million.
József Váradi, Wizz Air's Chief Executive Officer, said: "Our performance this quarter demonstrates the resilience of Wizz Air's ultra-low-cost business model.
“Despite the competitive landscape and ongoing supply chain challenges, our strategic focus on delivering the lowest fares, improving our route network, and maintaining high operational efficiency has yielded results.
"Capacity is stabilizing and we are focusing on further optimizing our operations, with an emphasis on improving our most profitable bases and enhancing efficiency.
“We remain optimistic about the demand outlook, with both ticket and ancillary RASK expected to be up year-on-year while load factor is maintained above 90%."