Jet2 shares surge 9% after $536m fuel hedge gain
Jet2 shares rose 9% after reporting a $536m gain from fuel derivatives for the year to March 31, easing investor concerns over travel disruption tied to the Middle East conflict.
Jet2 Plc shares rose 9% after the airline reported a $536 million gain from fuel derivatives for the fiscal year ended March 31. The full-year results were published on July 8.
The company said the gain came from favourable fair-value movements in its fuel hedges after jet fuel prices spiked when the Middle East conflict escalated. Jet2 described the derivative gains as a material balance-sheet benefit during the period of higher energy costs.
Group revenue rose 4% to $10.05 billion, while pre-tax profit fell 7% to $738.6 million. Jet2 attributed the profit decline mainly to lower income earned on its cash deposits.
Operationally, the carrier increased capacity, putting 24 million seats on sale, up 8% year-on-year, and carried 20.8 million passengers, a 5% rise. The board approved a $335 million share buyback programme.
The AIM-listed stock opened at £19.92 on Wednesday. After the market reaction the shares were about 5% higher for the year to date.
Jet2 reported annual cash inflows fell by 67% to roughly $103 million for the year to March 31, which it linked to customers delaying bookings and booking closer to departure because of uncertainty from the Middle East conflict.
Chief executive Steve Heapy told shareholders that higher taxes would push up fares, noting the group had absorbed about $67 million in additional regulatory and tax costs over the past year. Heapy added: “Don’t treat the aviation or holiday industry as a cash cow, because taxes increase the price of flying. I think, you know, enough is enough.”
In March the airline opened a six-aircraft base at London Gatwick and said it now operates within a 90-minute drive of more than 90% of the UK population.
Higher jet fuel costs have strained other carriers, and a US low-cost airline collapsed in May after facing similar cost and liquidity pressures.
Investors reacted to the hedging gain, the buyback plan and the Gatwick expansion, while the company warned of weaker near-term cash generation linked to changed booking patterns.
The material on GNcrypto is intended solely for informational use and must not be regarded as financial advice. We make every effort to keep the content accurate and current, but we cannot warrant its precision, completeness, or reliability. GNcrypto does not take responsibility for any mistakes, omissions, or financial losses resulting from reliance on this information. Any actions you take based on this content are done at your own risk. Always conduct independent research and seek guidance from a qualified specialist. For further details, please review our Terms, Privacy Policy and Disclaimers.
Articles by this author
