London - EasyJet said Britain’s decision to quit the European Union will continue to weigh on earnings next year as the weaker pound inflates its dollar-denominated fuel bill and other purchases priced in euros.
Exchange-rate movements will cost EasyJet £90m more in the 12 months ending September 30, 2017, than in the previous year, with £70m of that hit coming in the first half, the Luton, England-based company said in a statement on Tuesday.
Pretax profit for the fiscal year just ended fell 28% to £495m, in line with guidance issued by the carrier on October 6. The company didn’t provide an earnings estimate for the current fiscal year.
June 23’s Brexit vote extended a slide in the pound that has inflated EasyJet’s euro and dollar costs and may discourage Britons from traveling abroad.
At the same time bombings and shootings from France to Turkey have weighed on travel and hurt fares amid a capacity glut encouraged by the lower oil price.
Chief executive officer Carolyn McCall said EasyJet will still boost capacity 9% in fiscal 2017, adding: "In a tougher operating environment strong airlines like EasyJet will get stronger and we will build on our already well-established network."
EasyJet shares have lost 41% of their value since the start of 2016, valuing the carrier at £4.01bn.
The stock gained 3% on November 3 after High Court judges said a vote must be held in Parliament before Britain starts the two-year countdown to exiting the EU.
The government has said it will appeal that decision.Read Fin24's top stories trending on Twitter: Fin24’s top stories