Ryanair's profits plummet in fallout from volcano turmoil
Published 21/07/2010 | 05:00
THE fallout from the eruption of Iceland's Eyjafjallajokull volcano during April and May, combined with higher fuel costs, pulled Ryanair's profit down almost 24pc to €93.7m in the quarter to the end of June.
But it remains on target to boost net profit by between 10pc and 15pc during the current financial year, chief executive Michael O'Leary said yesterday.
Ryanair shouldered a €50m exceptional cost during the period, related to a provision for claims by thousands of passengers who were due to fly on 9,400 flights. These flights had to be cancelled by the carrier, after large swathes of European airspace were closed during April and May over fears that ash plumes could endanger aircraft and passengers.
Excluding the impact of the €50m charge, Ryanair's net profit rose 1pc year-on-year to €138.5m, while revenue was 16pc higher at €896.8m, as passenger numbers rose 8pc to 18 million in the quarter and average fares rose 5pc.
The carrier's ancillary revenues -- which include anything from a cup of coffee sold on board to shares of car rental agreements -- jumped over 23pc to €204m. The airline said the figure had improved due to a higher on-board spend. Total revenue per passenger was 7pc higher than in the comparable quarter last year.
The flat pre-exceptional result was also impacted by fuel prices, with Ryanair paying €286.6m in the quarter for fuel and oil.
That was 34pc more than in the comparable quarter last year. That was due to a combination of higher prices and an 18pc increase in the number of hours flown. The low-cost carrier has hedged 90pc of its current financial year's fuel requirements, while 90pc of the first half of its 2012 financial year's requirements have also been hedged.
Overall operating expenses rose 17pc to €727.4m.
Mr O'Leary said that the airline remains on target to deliver pre-exceptional net profits of between €350m and €375m for the current year.
Ryanair's cash balance also rose by €259m during the quarter to €3.1bn. It's planning to return €500m to shareholders this year, pending approval at September's annual general meeting.
Yesterday's pre-exceptional results were slightly ahead of analyst expectations. Davy Stockbrokers analyst Stephen Furlong described the performance as "stellar".
Speaking to the Irish Independent, deputy chief executive Michael Cawley said that Ryanair plans to announce another two or three new bases next month.
The airline terminated talks with aircraft manufacturer Boeing before Christmas regarding a substantial order, but still has some outstanding aircraft orders with the firm.
The next batch of those remaining aircraft are due to delivered this autumn, said Mr Cawley. Ryanair currently operates 250 aircraft.
Ryanair's load factor during the last quarter remained unchanged at 83pc.
Shares in the airline closed up 1.3pc, or 5 cent, at €3.83 yesterday.