Half-year profits are expected to be 30-70% lower than H1 17.
Companies: Flybe Group
Disappointing news from Flybe (LON: FLYB) today as the airline announces higher than expected maintenance costs are set to severely impact first-half profits.
The low-cost regional carrier is the latest to highlight the many issues being faced by European airlines after the news Monarch airlines had ceased trading earlier this month and Easyjet warned of its woes a few days later.
Today's profit warning is the second this year after the Group announced in March that a number of factors were set to impact profits, including weak demand and pricing competition. This began the start of a downward trend which ended with the share price reaching an all-time low of 31p in June this year, after the release of its full-year results.
As a result of the increased costs to improve the reliability of its fleet, the announcement said:
"Adjusted profit before tax is currently expected to be in the range of £5m to £10m for the first half of this financial year (H1 2016/17 adjusted PBT of £15.9m)."
The bad news sent Flybe shares down 15% to 37p in early morning trading on Wednesday.
Group CEO Christine Ourmieres-Widener said the news was "disappointing" and that "net debt, as expected, remains broadly in line with year ended 31st March 2017."
Flybe will announce its Interim Results in November.
The stock has had a bad run this year after reporting losses of £26m in FY17 which sent the share price to an all-time low. Currently, it trades at a PE ratio of 8x versus the industry median of 10x.
Image: Euronews.com