Pretax profits rose by 67 per cent at Ryanair over its first quarter to the end of June, as performance was boosted by higher ticket prices, the timing of Easter and strong ancillary sales. Una McCaffrey reports.
The airline was, however, cautious on its outlook for the rest of the financial year, warning that the first-quarter trend would not be maintained.
"We do not expect this yield buoyancy to be maintained at similar levels during the second quarter or indeed the second half of the fiscal year," said Ryanair chief executive, Michael O'Leary.
Analysts welcomed the latest numbers, which came in well ahead of most expectations.
John Sheehan at NCB noted that if full-year forecasts of a 5-10 per cent profit uplift were to be met, earnings per share would need to decline by about 8 per cent year-on-year over the remaining nine months .
Howard Miller, Ryanair chief financial officer and deputy chief executive, stuck by the company's guidance yesterday, saying the fourth quarter "looks pretty much that it could be a break-even or a loss".
Mr Miller highlighted strong oil prices and the company's continued expansion plans as reasons for its caution.
He said that while the airline had not yet received any "meaningful bookings" for the third and fourth quarters, average fares taken in for the second quarter were up by just 1 or 2 per cent.
Mr Miller acknowledged that Ryanair had passed through "an exceptionally good" first quarter, with traffic growing by 25 per cent to 10.7 million passengers and revenues climbing by 40 per cent to €566.6 million.
Pretax profits rose to €128.6 million from €76.9 million a year earlier.
The airline reported particularly strong fares over the Easter period. Easter did not fall in the first quarter last year. Growth in the number of sun destinations serviced enhanced this Easter result, according to Mr Miller.
Ancillary revenues, drawn from sales of products such as car hire and hotels, were 31 per cent higher at €76.6 million. Operating expenses grew by 32 per cent to €429.9 million, mostly because of higher fuel prices.
When fuel was excluded from the numbers, unit costs declined by 2 per cent. Net margins increased by four points to 20 per cent, while cashflow amounted to €269 million.
Over the first quarter, the cost of fuel at the airline rose by 52 per cent to €167.5 million. Ryanair is 90 per cent hedged to the end of October at $70 (€55) per barrel and 90 per cent hedged for November and December at $74 per barrel. Oil was trading at $75 per barrel yesterday.
The company said it continued to monitor forward rates and "will try to avail of any suitable opportunity" to hedge out until the end of March next.
Shares in Ryanair fell 3.2 per cent, or 25 cent, to €7.54.
