Investing.com -- Shares of EasyJet (LON:EZJ) rose on Wednesday after it reported a jump in its annual profits, driven by demand for its flights and holiday packages, alongside improvements in reducing its traditionally challenging winter losses.
At 3:45 am (0845 GMT), EasyJet was trading 2.4% higher at 553.40 pence.
For the fiscal year ending September 30, 2024, the company reported a headline profit before tax of £610 million, a 34% surge from the previous year's £455 million.
The airline also recorded a particularly strong performance in the second half of the year, with profits reaching a record £960 million during this period.
“We see some attractions in the easyJet investment case including Holidays, although on our forecasts, some peers generate higher margins/ returns and/ or trade on more attractive EV/EBIT and PE multiples,” said analysts at RBC Capital Markets in a note.
Passenger numbers rose by 8% year-on-year, reaching 89.7 million, supported by an expanded network and the addition of new routes.
EasyJet Holidays, the company’s package holiday division, also reported growth, contributing £190 million in profits before tax—a 56% increase year-over-year—thanks to a 36% rise in customer numbers.
The company made strides in minimizing its winter losses, which decreased by £40 million compared to the previous year.
This improvement was attributed to increased operational efficiencies, including better aircraft utilization and expanded holiday offerings.
Despite industry-wide inflationary pressures, EasyJet maintained a tight control on costs, with its cost per seat excluding fuel rising only marginally.
Going forward, the airline expects to increase its seat capacity by 3% in fiscal year 2025 and anticipates reducing winter losses further, forecasting a strong start in the first quarter of the new financial year.
This aligns with its strategy to enhance operational efficiency and capitalize on the growing demand for travel. EasyJet Holidays plans to grow its customer base by another 25% in 2025.
“Overall we expect upward pressure to consensus forecasts in FY25E driven by an expected ~10% reduction in fuel CASK in 1H and a slight reduction in headline CASK ex fuel in 1H,” RBC said.