EU TRANSPORTATION: easyJet: 3Q (to June) results
Jul-17 16:58
(Baa2 Stable/BBB Pos)
Capacity growth absorbed well while fuel helps cost side. Adding to that holidays continues solid growth. We struggle to see value on the curve though -> it is trading flat to asset light hotel franchisor IHG - which we find surprising.
- Capacity +8%, load factor +20bps at 90.2%. Yields seem to have been flat as RASK came in at +0.5% y/y. Note had a boost from Easter timing.
- Unit costs fell -0.5% courtesy of fuel -7.3%. Non-fuel costs relatively mute increase at +2.3%.
- Net it left airline EBIT +28%y/y.
- Holidays came in contributing 27% of group EBIT after +20% growth. Net group EBIT was +25% y/y.
- Net cash of £803m (vs. £460m LY). Reminder has capex programme over coming years (FY25-28: £1.2, £1.7, £2.3, £3.3b in gross capex) that will swing that around.
- Q4 guidance (to Sept) for airline side is firm with bookings 67% sold (+1ppt y/y) and unit revenues expected to continue this quarters trend. 2H costs also expected to continue similar trend with fuel -7% and ex. fuel costs up slightly.
- Holiday guidance firm, with 4Q 85% sold, PBT expected to be >£235m (>+24% y/y).
- It is hedged 64% @ $716 for the 6m ending March '26 and 37% @ $692 for 6m ending Sept '26. Spot {JET1NECC Index} is off lows and is now flat y/y.
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OPTIONS: Notable Bobl Put, Euribor Call Ladder Buying
Jun-17 16:52
Tuesday's Europe rates/bond options flow included:
- OEQ5 117p, bought for 18.5 in ~11.2k
- RXN5 130/129.50ps, sold at 9.5 in 2k
- ERU5 98.25/98.37cs, bought for 1 in 10k
- ERZ5 98.25/98.50/98.625c ladder, bought for 3.75 in 3.5k
- ERZ5 98.25/98.375/98.50c ladder, bought for half in 2k
- ERZ5 98.25/98.50cs vs 98.00p, bought the cs for 2.25 in 5k
- 2RU5 97.93/97.75ps 1x2, bought for 0.75 in 2.5k
- SFIZ5 96.50/96.70cs, bought for 4 in 5.3k
- SFIH6 95.70/95.40ps 1x2, sold the 1 at -0.25 in 4k
FED: US TSY 4Y-10M TIPS AUCTION: NON-COMP BIDS $53 MLN FROM $23.000 BLN TOTAL
Jun-17 16:45
- US TSY 4Y-10M TIPS AUCTION: NON-COMP BIDS $53 MLN FROM $23.000 BLN TOTAL
TARIFFS: Supreme Court Asked To Weigh In On US Global Tariffs
Jun-17 16:41
- Bloomberg reports that “two family-owned businesses are asking the US Supreme Court to consider striking down President Donald Trump’s most sweeping tariffs, putting a high-stakes fight with worldwide economic implications before the justices for the first time.
- The request, which stems from a lawsuit filed in Washington by two educational-toy makers, seeks to put the case on an expedited track with the possibility of a definitive Supreme Court ruling by the end of the year. A federal appeals court in a separate case has said the tariffs could stay in effect until that panel hears arguments July 31.”
- White House administration officials have previously expressed confidence in the success of the appeal against the original trade court's ruling (for example, here).
