Ryanair today reported a 78% fall in full-year adjusted net profit to €105m in the year to March 31, 2009, and said it expected to "at least double" that to €200-300m in the fiscal year 2009-10.
Ryanair wrote down €222.5m for the fall in the value of its stake in Aer Lingus and €51.6m for accelerated depreciation on aircraft disposals. Ryanair made a loss of €169m.
Fuel costs rose by €466m (+59%) to €1.257 . Revenues rose by 8% to €2,942m as air fares fell 8% and traffic grew 15% to 58.5m.
Ryanair says it has now grown to be the Europe’s largest airline having overtaken Air France, BA and Lufthansa’s passenger numbers and market capitalisation.
In fiscal 2009/10 Ryanair expects to grow traffic by 15% to 67m. Significantly lower oil prices has encouraged the airline to restart hedging and Ryanair is now 90% hedged for the first 3 quarters of the coming year at much lower prices than competitors. It says if oil prices remain at current levels then the full year fuel bill will be €450m lower and expects operating costs per passenger (excluding fuel) will also fall by approx. 5%. Ryanair says it intends to use these reductions in both fuel and other unit costs to drive fares materially lower. It says lower fares will help Ryanair to grow traffic, maintain high load factors and, despite a deep recession - gain traffic from high fare competitors. The airline says while it has limited visibility on bookings, it expects that a combination of a deep recession, weaker sterling and capacity growth will cause average fares to fall by between 15% to 20% this year to as little as €32 per passenger.
On the basis of these fuel and yield expectations, which it says carry a heavy health warning, Ryanair currently expects that after tax profits for the coming year will at least double to a range of between €200m to €300m.
A recent article on the Irish economy in Fortune Magazine began: "Lounging amid the bruised plastic furniture and polyester carpeting at his dilapidated offices at Dublin Airport, Michael O'Leary, CEO of Ryanair, is ebullient about his low-cost carrier's prospects: "We'll mop the floor with every airline in Europe!"
He's also, on this chilly spring evening, a blarney-filled promoter of his airline's flashy image, pointing to the bikini-clad beauties in his Girls of Ryanair calendar and boasting that they "really do work here!"
But O'Leary, like many other Irish business leaders, is optimistic about his own business yet worried about the future of the Celtic miracle that created the likes of Ryanair and sprinkled Eire's ancestral pastures with biotech plants and software labs.
That's because the global economic tempest has washed over Ireland, and its economy is suffering the deepest plunge of virtually any country outside of Iceland. (See "Iceland: The Country That Became a Hedge Fund") It has been hit by a sudden, shocking reversal of fortune that even a Gaelic weaver of tales would find difficult to invent. The economy of the European Union's fastest-growing major member country since the euro made its debut 10 years ago has ground to a halt. The Irish government predicts that GDP will tumble 7.7% this year, after sliding 2.2% in 2008. Unemployment is forecast to hit 15% next year, quadrupling the figure in 2007."
Summary Table of Results (IFRS) - in euro
|
Full Year Results |
Mar 31, 2008 |
Mar 31, 2009 |
% Change |
|
Passengers |
50.9m |
58.5m |
+15% |
|
Revenue |
€2,714m |
€2,942m |
+8% |
|
Adjusted Profit/(Loss) after Tax (Note 1) |
€480.9m |
€105.0m |
-78% |
|
Adjusted Basic EPS(euro cent)(Note 1) |
31.81 |
7.10 |
-78% |
Announcing the results Ryanair’s CEO, Michael O’Leary, said: “Despite the global recession and record high oil prices Ryanair’s lowest fare/lowest cost airline services again delivered traffic growth and profitability which demonstrates the fundamental strength of the Ryanair model. The principal highlights of the past year included:-
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After tax profit of €105m.
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Traffic growth of 15% to 59m.
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18 net new aircraft (year end fleet 181 Boeing 737-800 aircraft).
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6 new bases at Alghero, Birmingham, Bologna, Bournemouth, Cagliari, and Edinburgh.
-
-
BAA "airport monopoly broken up" – Gatwick, Stansted and Edinburgh to be sold.
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EU’s Charleroi state aid decision dismissed by the European courts.
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Passenger service further improved (No 1 on time major airline).
To deliver a net profit of €105m (although a disappointing €376m decline over last year’s figure) was a robust performance during a year of record high oil prices when our fuel bill jumped by €466m (up 59%). In a year when most airline competitors announced large losses, Ryanair’s profit exceeded our previous guidance. Average fares (due to the global recession and weaker Sterling) fell by 8% to €40, but this was largely funded by a 3% reduction in non fuel operating costs. The recession and declining consumer confidence is proving to be good for Ryanair’s growth, as millions of passengers switch to our lower fares. All of our major competitors have reported material reductions in short-haul capacity and traffic. Ryanair will continue to lower fares to stimulate traffic growth, maintain high load factors and win more shorthaul traffic from our high fare competitors."
