Why Norwegian Air crashes in the stock exchange
Turbulence for the second largest company in the Scandinavian area after the bankruptcy of Scandinavian Airlines last year. In the quarterly Norwegian Air Shuttle presents a net profit in decrease of 57% and the reactions of the investors are not long in coming
Wanting to play with terms borrowed from the airline sector, we could say that Norwegian Air Shuttle is going through an air gap that is shaking its coupons a lot: the stock of the low cost airline just before 10 in fact suffered a sharp loss of 7 % to 9.5 Norwegian kroner.
Our numbers for the second quarter of 2023 are out, and here are some of the highlights
Operating result (EBIT) NOK 651 million
— Norwegian (@Fly_Norwegian) August 24, 2023
A TURBULENT QUARTERLY
Today's turbulence is linked to the loss of share recorded in the second quarter (difficulties that obviously do not appear in the highlights published by the company on social media), with a net profit down by 57% to 538 million Norwegian crowns, lower than expected. EBIT decreased to 650 million, 52% less than the 1.35 billion in 2022, which however – recalls the company – had benefited from the 2.1 billion crowns relating to the completion of the purchase of aircraft from Boeing.
At the same time, the Scandinavian company highlighted that it had "recorded strong demand on all markets during the summer season, with robust load factors and improving yields". Passengers increased to 5.6 million from 5 million in the second quarter of 2022. while operating revenues totaled 6.9 billion, up 41%.
NORWEGIAN AIR RUNS FOR COVERS
According to Norwegian Air, the below-expected quarterly results '"were influenced by macro-economic uncertainty, which predominantly concerns the weakening of the Norwegian krone against the dollar and the euro".
To reassure investors, the Norwegian carrier has promised that "the board of directors has started the procedure to ensure that the capital structure reflects the success of the transformation of the company, after its reorganization" and "the process also aims to put the company able to distribute a potential dividend”.
But, given this morning's stampede, many shareholders preferred to get off Norwegian Air, which is not new to such tossing and turning. In the midst of the Covid pandemic storm, like many other low-cost companies, Norwegian Air Shuttle had also applied for creditor protection based on the Irish equivalent of Chapter 11, as part of a large downsizing that had led it to abandon its long-term activities radius at the end of 2020.
THE BANKRUPTCY OF SAS
Exactly one year ago, the CEO of the main Scandinavian company, SAS, declared bankruptcy by resorting to Chapter 11 in the USA, assisted bankruptcy, to restructure itself, continuing to fly.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/perche-norwegian-air-si-schianta-in-borsa/ on Thu, 24 Aug 2023 13:40:51 +0000.