Ryanair, Europe’s biggest low cost carrier, announced Monday record annual profits of €569m, up 13% on last year despite higher oil costs. Revenues rose to €4.88bn as traffic grew 5% to 79.3m passengers. Unit costs rose 8% mainly due to an 18% (€292m) increase in fuel. Excluding fuel unit costs rose by 3%, while average fares improved by 6%.
Ryanair said its aircraft have been purchased at substantially discounted prices, that represents a significant long term benefit for shareholders. It has gross cash over €3.5bn and year-end net cash of €61m, despite having returned almost €500m to shareholders in November (€1.5bn over the past 5 years) via a second special dividend.
"We have also taken advantage of current low interest rates to secure almost 70% of our fleet financing all in at under 3% and we have completed our Capex hedging programme to the end of 2014 at Euro/Dollar exchange rate of 1.32," it said.
Dónal O'Neill of Goodbody commented: "Ryanair has reported FY13 results which have come bang in line with our forecasts as slightly higher revenue was offset by slightly higher non-fuel unit costs. Management is guiding for FY14 to come in at between €570-600m which is exactly where we had estimated, but is cautioning on higher fuel costs and downward pressure on yields.
Revenue of €4,884m is 0.6% ahead of our forecast. Scheduled revenue was in line at €3,820m on a Q4 yield increase of 4%. Ancillary revenue came in 3% above our forecast and increased 20% per passenger, likely due to a better than expected performance from allocated seating. Total costs of €4,166m are also 0.6% ahead of our estimates, primarily related to non-fuel costs (route charges and maintenance) coming in a touch above forecast, while fuel was also a fraction worse than expected.
The outlook was always going to be the key and Ryanair has guided exactly where we expected it would. It is expecting the Q1 profit outturn to be lower yoy due to the timing of Easter and higher fuel charges, which in our view makes sense. It is also suggesting that there is downward pressure on yield, but this is offset by forward bookings being ahead of summer 2012.
On the back of these results and the guidance we will not be reducing our FY14 PAT forecast of €640m although we are likely to rebalance our Q1 and Q2 estimates to reflect the prevailing yield and fuel dynamics. Indeed given the fuel guidance, we could see an increase in our FY15 estimates."
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