Norwegian Q2 2025 presentation: Profitability soars, inaugural dividend declared

Introduction & Market Context

Norwegian Air Shuttle ASA (OB:OL:NAS) presented its second quarter 2025 results on July 11, showing a remarkable turnaround from its first quarter performance. The airline reported a profit before tax of NOK 1,055 million, a significant improvement from the NOK -611 million EBIT reported in Q1. The stock has responded positively since the Q1 earnings release, with shares trading at NOK 15.68, up 2.28% and approaching its 52-week high of NOK 15.70.

In a milestone development, Norwegian announced its first dividend since restructuring, with NOK 0.90 per share to be paid in August. This marks a significant turning point for the airline that underwent substantial financial restructuring during the pandemic.

Quarterly Performance Highlights

Norwegian reported strong traffic figures for Q2 2025, carrying 7.6 million passengers, a 4% increase year-over-year. The airline achieved an impressive load factor of 85.2% for Norwegian operations, up 3 percentage points from the previous year, while Widerøe reached a 73.9% load factor, up 4 percentage points.

The company highlighted its successful summer season ramp-up with zero cancellations, contributing to record high Q2 unit revenue. On-time performance remained strong at 86% for Norwegian and 89.3% for Widerøe operations.

As shown in the following traffic statistics chart:

Corporate travel continues to show growth in 2025, with Norwegian citing its on-time performance, frequency, and regularity as key factors attracting business travelers. The company also announced a new contract with the Swedish state/Kammarkollegiet, further strengthening its position in the corporate market.

The following chart illustrates the growth in corporate passengers:

Detailed Financial Analysis

Norwegian reported group revenue of NOK 10.3 billion for Q2 2025, a 10% increase compared to the same period last year. The Widerøe segment, acquired in January 2024, contributed NOK 2.0 billion to total revenue, representing 19% of group operating revenue.

The airline achieved a group operating profit (EBIT) of NOK 1,250 million, with Norwegian operations contributing NOK 1,021 million and Widerøe adding NOK 229 million, an increase of NOK 27 million year-over-year.

The following slide details the key financial figures for Q2 2025:

Revenue growth was particularly impressive, with unit revenue up 10% year-over-year despite modest capacity growth of just 1%. Ancillary revenue reached NOK 205 per passenger, up 5% compared to Q2 2024.

The revenue breakdown is illustrated in the following chart:

The company’s operating profit showed significant improvement, driven by enhanced unit revenue and favorable Easter timing, which helped counter rising cost inflation. This improvement is visualized in the waterfall chart:

Norwegian’s income statement confirms the strong financial performance, with net profit totaling NOK 932 million:

The balance sheet remains robust with a liquidity position of NOK 13.8 billion, providing financial flexibility for strategic initiatives:

Strategic Initiatives

Norwegian highlighted its fleet strategy execution, noting that Boeing (NYSE:BA) deliveries are improving. The company is utilizing its strong balance sheet for strategic fleet decisions, including a transaction to acquire 11 spare engines with deliveries scheduled for 2027/28. These initiatives aim to lower ownership costs and enhance operational efficiency.

The airline continues to benefit from its acquisition of Widerøe, completed in January 2024 as a 100% cash acquisition at a P/E ratio of approximately 2. Widerøe set passenger records in the quarter with 1,078,000 passengers, up 8% year-over-year, and is showing increasing interline traffic with Norwegian operations.

Norwegian is also implementing a program to deliver sustainable profitability, targeting recurring profit improvement in excess of NOK 1 billion annually and a sustained increase in EBIT margin.

Forward-Looking Statements

Looking ahead, Norwegian provided guidance for the remainder of 2025. For the full year, the company expects capacity growth of 3% with unit cost increases. For Q3 2025, capacity growth is projected at 2%, while Q4 2025 is expected to see a capacity reduction of 3%.

The company reported continuous strong booking momentum post-Easter, with Norwegian yield on sold tickets up year-over-year for July to October. Capacity growth has been reduced to low single-digit percentage growth year-over-year during the summer season.

This outlook comes as a significant improvement from Q1 2025, when the company faced challenges that led to a stock decline of 9.92%. The current results and forward guidance suggest Norwegian has successfully navigated through its seasonal weak period and is positioned for continued profitability.

The dividend announcement of NOK 0.90 per share, to be paid in August, signals management’s confidence in the company’s financial stability and future prospects, marking a new chapter for Norwegian Air Shuttle following its comprehensive restructuring during the pandemic era.

Full presentation:

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