EasyJet FY profit slumps on Brexit, currency headwinds

Budget airline EasyJet reported a drop in profit and revenue for the year to the end of September and cut its dividend as it took a hit from terrorist attacks and as the UK’s decision to leave the European Union made the euro more expensive for British travellers over the summer.

Pre-tax profit slid 27.9% to £495m, on revenue of £4.67bn, down from £4.69bn the year before. Revenue per seat fell 6.4% to £58.46, reflecting the impact of external events such as the terrorist attacks in Egypt, Paris, Brussels, Turkey and Nice.

Still, the pre-tax profit announced was within the £490m to £495m range the company had guided to in October.

Basic earnings per share declined to 108.7p from 139.1p.

EasyJet said the total impact of external events during the year on pre-tax profit was an estimated £150m. Meanwhile, the company took an £88m hit from the weaker pound.

The group said it carried a record number of passengers, up 6.6% year-on-year to 73.1m with a record load factor of 91.6% versus 91.5% in 2015.

EasyJet declared a dividend of 53.8p per share, down from 55.2p but in line with its increased payout policy of 50% of profit after tax.

The company said it expects to incur £5m in costs this year and £10m next year for an EU air operator certificate, which would allow it to fly freely throughout Europe after the UK leaves the EU.

Chief executive Carolyn McCall said: “EasyJet achieved a resilient performance in 2016, in the face of significant challenges including a series of external events and foreign exchange headwinds.

"Looking ahead, the EasyJet model remains strong as does the demand environment and we continue to see opportunities in the medium term to grow revenue, profit and shareholder returns. In a tougher operating environment strong airlines like EasyJet will get stronger and we will build on our already well-established network.”

At 0927 GMT, the shares were up 1.8% to 1,051p.