Ryanair raises its full-year profit forecast to €400m
But shares slide as results shy of analysts' estimates
Published 02/11/2010 | 05:00
Ryanair has bumped up its full-year profit forecast to as much as €400m on the back of current quarter yields -- or average fare per passenger -- that are proving better than expected.
The airline increased its profit guidance to between €380m and €400m for the financial year, from the €350m to €375m it had previously predicted.
The carrier made the projection as it reported a 32pc rise in net income to €330m for the second quarter ended in September.
However, the figure was shy of some analysts' estimates, while the new full-year outlook was also in line with what the investment community had already pencilled in. That resulted in Ryanair shares trading lower yesterday, closing the session down 3.8pc at €3.97.
The surge in profitability during the second quarter -- the most important for the airline -- came as passenger numbers rose 10pc year-on-year to 40.1 million for the second half.
It carried 22 million passengers in the second quarter. Extra fees such as baggage charges and priority boarding costs helped Ryanair to report a €44 average fare for the first six months of its financial year, up 12pc year-on-year.
Its sector length -- or the average length of its routes -- rose 12pc as it added more flights to destinations such as Malaga and Alicante in Spain, Faro in Portugal and Malta.
Total revenues climbed 23pc in the first half to €2.18bn. That comprised a 23pc rise in revenue from scheduled services to €1.76bn and a 22pc rise in revenue from ancillary services such as car rental and hotel bookings to €424m.
For the second quarter, total revenue was 29pc higher at just over €1.28bn. Total unit costs were 13pc higher for the first half, while fuel costs rose 44pc to €660m due to both an increase in average route lengths and higher prices.
The airline reversed €18m in provisions it had previously set aside to deal with compensation claims arising from flights cancelled as a result of the volcanic eruption in Iceland earlier this year. Ryanair had previously set aside a total of €50m for compensating up to 1.5 million customers that had been affected by the flight disruption.
Ryanair deputy chief executive Michael Cawley yesterday said the airline would lose about €50m in the second half. That compares with a loss of €70m in the second half of last year.
Analyst Joe Gill of Bloxham Stockbrokers said the numbers from Ryanair underlined the "strategic advantage and firepower" available to further build the business.
Ryanair boss Michael O'Leary and Mr Cawley reiterated they believed the UK's Office of Fair Trading had missed a four-month window to investigate the airline's near 30pc stake in Aer Lingus.