1st Quarter Results
Ryanair Holdings PLC
06 August 2002
RYANAIR ANNOUNCES RECORD Q1 PROFIT INCREASE
TRAFFIC GROWS 38%, PROFITS RISE BY 68%
Ryanair, Europe's largest low fares airline today (Tuesday, 6 Aug 2002)
announced its biggest increase in Q1 profits (end 30 Jun 02). Passenger traffic
during the quarter rose by 38% to 3.54m (the first quarter in Ryanair's history
when over 1m pax were carried each month) due in large measure to a further 7%
reduction in average air fares. Total revenues grew by 29% to €194.3m,
however operating expenses rose by only 22% to €148.9m with the result
that profits rose significantly ahead of expectations by 68% to €39.0m.
Summary Table of Results (Irish GAAP) - in Euro
Quarter End 30 Jun 2001 30 Jun 2002 % Increase
Passengers 2.56m 3.54m 38%
Load Factor 77% 83% 7%
Revenue €150.8m €194.3m 29%
Profit After Tax €23.2m €39.0m 68%
Basic EPS (Euro Cent) 3.21c 5.16c 61%
Announcing these results Ryanair's CEO Michael O'Leary said:
'This record increase in Ryanair's quarterly profits is a direct result
of the key elements of our unique low fares model. Firstly very strong
traffic growth in all our new and existing markets, secondly extremely
disciplined cost-management, and thirdly using these lower costs to drive
down airfares for our customers.
'Our traffic growth during Q1 was outstanding, with high load factors
on all 10 routes to/from our new German base at Frankfurt Hahn, and our 8
new routes to/from London Stansted. Existing markets have also grown
strongly where we were able to allocate bigger aircraft or increase
frequencies. Average load factors for the quarter rose from 77% to 83%.
'Despite this strong growth Ryanair continues to deliver impressive
cost discipline. Operating expenses increased at a considerably lower rate
(+22%) than revenues (+29%). The fact that marketing and distribution costs
declined by 11% during a quarter when we were promoting our new German base
and over 20 new routes, highlights the strength of Ryanair's unique low
fares formula in Continental Europe. Despite the protestations of Lufthansa,
(who continue to predict that low fares won't work in Germany), Ryanair
enjoys load factors of over 80% on our 10 routes to/from Frankfurt Hahn. We
will continue to expand in this market where Ryanair is now Germany's
largest low fares airline.
'There is no doubt that the tumultuous events in the airline industry over
the past 12 months have created huge new growth opportunities. Ryanair leads
the low fares market in Europe by some considerable distance, as our average
fares are over 50% lower than those of Easyjet/Go. Our strong organic growth
continues and we enjoy a surplus of new route and new base opportunities. We
expect to open at least one new base in Europe each year for the next 3 or 4
years, as we grow at a disciplined and controlled rate to the benefit of our
customers, our shareholders and our staff.
'In view of these increased opportunities, Ryanair has agreed with
Boeing to convert 3 of our rolling 50 option aircraft into firm deliveries
during spring 2003 (making a total of 13 new aircraft to be delivered in
advance of summer 2003). These additional firm orders will enable Ryanair to
grow at the slightly faster rate of 30% for the next two years to just under
20m passengers in 03/04. With these new deliveries, Ryanair will start to
retire our older Boeing 737-200 aircraft one year earlier than planned in
2003, and the balance will be retired over a four year period to 2006, at
which date Ryanair will have the youngest fleet of aircraft in Europe.
'We welcome the initiative of the new Minister for Transport in Ireland
to proceed with the construction of a temporary low cost terminal facility
at Dublin whilst at the same time inviting proposals for a second (and
hopefully more) competing terminals at Dublin Airport. This initiative, will
finally introduce competition in the Irish Airport sector, and this will
result in lower prices and better facilities for Irish consumers and
visitors. If the Minister proceeds to introduce such competition, then
Ryanair envisages launching a wide range of new, very low fare routes
between Ireland and Continental Europe, an initiative that has the capacity
to create thousands of new jobs as well as bring millions of new visitors to
Ireland on a year-round basis.
'Ryanair's continuing success would not be possible without the
outstanding performance and contribution of our 1,700 people. We are the
most productive airline group in Europe, and we continue to deliver
outstanding customer service in a friendly and efficient way, which is why
we continue to enjoy such high levels of repeat business. I want to say a
sincere thank you to each and every one of you for another outstanding
performance over the past quarter.
'Finally, a note of caution. Whilst we have enjoyed a very strong first
quarter, much of this exceptional profit growth is due to the impact of the
launch costs of many new routes in the corresponding Q1 last year, whereas
this year most of this launch activity was expended in the preceding quarter
(Q4 Jan/Mar02). We will not repeat a 68% growth in net profits in Q2, and
going forward we expect to see profit growth running in line with previous
guidance for the remainder of the year. It is my policy, as always, to
advise investors and analysts to remain sensible in their outlook for
Ryanair as we ourselves will continue to be.'
Ends. Tuesday, 6 August 2002
For further details contact:
Ryanair
Howard Millar
Tel: + 353 1 8121212
Murray Consultants
Pauline McAlester
Tel: +353 1 6633332
www.Ryanair.com
Certain of the information included in this release is forward looking and is
subject to important risks and uncertainties that could cause actual results to
differ materially. It is not reasonably possible to itemise all of the many
factors and specific events that could affect the outlook and results of an
airline operating in the European economy. Among the factors that are subject to
change and could significantly impact Ryanair's expected results are the airline
pricing environment, fuel costs, competition from new and existing carriers,
market prices for replacement aircraft, costs associated with environmental,
safety and security measures, actions of the Irish, U.K., European Union ('EU')
and other governments and their respective regulatory agencies, fluctuations in
currency exchange rates and interest rates, airport access and charges, labour
relations, the economic environment of the airline industry, the general
economic environment in Ireland, the UK and Continental Europe, the general
willingness of passengers to travel and other economics, social and political
factors.
Ryanair is Europe's largest low fares airline with 76 low fare routes
across 13 countries. Ryanair has a fleet of 44 Boeing 737's, and firm
orders for up to a further 105 new 737-800's which will be delivered
over the next 8 years. Ryanair currently employs a team of 1,700 people
and will carry almost 15 million scheduled passengers in the current
year. www.RYANAIR.COM was launched in January 2000 and is already
Europe's largest travel website.
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
With UK and Irish GAAP(unaudited)
Quarter Quarter
ended ended
June 30, June 30,
2002 2001
€'000 €'000
Operating Revenues
Scheduled revenues 172,761 134,545
Ancillary revenues 21,501 16,299
Total operating revenues
-continuing operations 194,262 150,844
Operating expenses
Staff costs 23,425 18,831
Depreciation and amortisation 18,373 15,672
Other operating expenses
Fuel & Oil 33,645 26,355
Maintenance, materials and repairs 9,449 7,300
Marketing and distribution costs 5,485 6,145
Aircraft rentals - 2,874
Route charges 16,491 11,510
Airport and Handling charges 28,163 21,677
Other 13,876 11,720
Total operating expenses 148,907 122,084
Operating profit - continuing operations 45,355 28,760
Other income/(expenses)
Interest receivable and similar income 7,002 5,211
Interest payable and similar charges (6,394) (4,564)
Foreign exchange losses (2,581) (1,939)
(Loss)/gain on disposal of fixed assets (22) 7
Total other income/(expenses) (1,995) (1,285)
Profit on ordinary activities
before taxation 43,360 27,475
Tax on profit on ordinary activities (4,396) (4,259)
Profit for the period 38,964 23,216
Earnings per ordinary share
-Basic(Euro cent) 5.16 3.21
-Diluted(Euro cent) 5.09 3.16
Number of ordinary shares(in 000's)*
-Basic 755,031 724,107
-Diluted 765,996 735,140
*The Company implemented a 2:1 share split on December 7th, 2001. Share capital
and earnings per share figures have been restated to give effect to the share
split.
Page 1
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheets in accordance with UK and Irish
GAAP
June 30, March 31,
2002 2002
€'000 €'000
Unaudited
Fixed assets
Tangible assets 1,007,560 951,806
Current Assets
Cash and liquid resources 986,635 899,275
Accounts receivable 15,067 10,331
Other assets 10,725 11,035
Inventories 17,553 17,125
Total current assets 1,029,980 937,766
Total assets 2,037,540 1,889,572
Current liabilities
Accounts payable 46,434 46,779
Accrued expenses and other liabilities 278,834 217,108
Current maturities of long term debt 42,791 38,800
Short term borrowings 7,373 5,505
Total current liabilities 375,432 308,192
Other liabilities
Provisions for liabilities and charges 51,892 49,317
Creditors > 1year 14,824 18,086
Long term debt 554,154 511,703
620,870 579,106
Shareholders' funds - equity
Called - up share capital 9,587 9,587
Share premium account 553,457 553,457
Profit and loss account 478,194 439,230
Shareholders' funds - equity 1,041,238 1,002,274
Total liabilities and shareholders' funds 2,037,540 1,889,572
Page 2
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statements in accordance
with UK and Irish GAAP (unaudited)
Quarter Quarter
ended ended
June 30, June 30,
2002 2001
€'000 €'000
Net cash inflow from operating activities 113,570 76,814
Returns on investments and servicing of finance 220 1,716
Taxation (591) (112)
Capital expenditure(including aircraft deposits) (74,149) (32,550)
Net cash inflow before financing
and use of liquid resources 39,050 45,868
Financing 46,442 (8,577)
(Increase) in liquid resources (126,749) (40,479)
(Decrease) in cash (41,257) (3,188)
Analysis of movement in liquid resources
Liquid resources at beginning of year 816,023 564,782
Increase in period 126,749 40,479
Liquid resources at end of period 942,772 605,261
Analysis of movement in cash
At beginning of year 77,747 56,860
Net cash outflow (41,257) (3,188)
Net cash at end of period 36,490 53,672
Page 3
Ryanair Holdings plc and Subsidiaries
Consolidated Statement of Changes in Shareholders' Funds - Equity
in accordance with UK and Irish GAAP (unaudited)
Share Profit
Ordinary premium and loss
shares account account Total
€'000 €'000 €'000 €'000
Balance at April 1, 2002 9,587 553,457 439,230 1,002,274
Profit for the quarter - - 38,964 38,964
Balance at June 30, 2002 9,587 553,457 478,194 1,041,238
Page 4
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
with US GAAP (unaudited)
Quarter Quarter
ended ended
June 30, June 30,
2002 2001
€'000 €'000
Operating Revenues
Scheduled revenues 172,761 134,545
Ancillary revenues 21,501 16,299
Total operating revenues
-continuing operations 194,262 150,844
Operating expenses
Staff costs 23,186 18,630
Depreciation and amortisation 18,373 15,672
Other operating expenses
Fuel & Oil 33,645 26,355
Maintenance, materials and repairs 9,449 7,300
Marketing and distribution costs 5,485 6,145
Aircraft rentals - 2,874
Route charges 16,491 11,510
Airport and Handling charges 28,163 21,677
Other 13,854 11,698
Total operating expenses 148,646 121,861
Operating profit - continuing operations 45,616 28,983
Other income/(expenses)
Interest receivable and similar income 7,002 5,211
Interest payable and similar charges (5,387) (4,564)
Foreign exchange losses (2,581) (1,939)
(Loss)/gain on disposal of fixed assets (22) 7
Total other income/(expenses) (988) (1,285)
Profit on ordinary activities
before taxation 44,628 27,698
Tax on profit on ordinary activities (4,537) (4,276)
Net Income 40,091 23,422
Net Income per ADS *
-Basic(Euro cent) 26.55 16.17
-Diluted(Euro cent) 26.17 15.93
Weighted Average number of shares*
-Basic 755,031 724,107
-Diluted 765,996 735,140
*The Company implemented a 2:1 share split on December 7th, 2001. Share capital
and earnings per share figures have been restated to give effect to the share
split.( Each ADS represents five ordinary shares)
Page 5
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between UK, Irish and US generally
accepted accounting principles(unaudited)
(A) Net income under US GAAP
<----------Quarter ended-------------->
June 30, June 30,
2002 2001
€'000 €'000
Profit as reported in the consolidated profit and loss accounts in
accordance with UK and Irish GAAP
38,964 23,216
Adjustments
Pension 122 85
Employment grants 117 116
Capitalised interest re aircraft acquisition programme 1,007 -
Darley Investments Limited 22 22
Tax effect of adjustments (141) (17)
Net income under US GAAP 40,091 23,422
(B) Consolidated Cashflow Statements in accordance
with US GAAP
<------------Quarter ended------------>
June 30, June 30,
2002 2001
€'000 €'000
Cash inflow from operating activities 113,199 78,418
Cash (outflow) from investing activities (241,106) (276,289)
Cash inflow/(outflow) from financial activities 48,310 (4,203)
Decrease in cash and cash equivalents (79,597) (202,074)
Cash and cash equivalents at beginning of year 482,492 389,059
Cash and cash equivalents at end of year 402,895 186,985
Cash and cash equivalents under US GAAP 402,895 186,985
Deposits with a maturity of between three and six months 583,740 481,400
Cash and liquid resources under UK and Irish GAAP 986,635 668,385
Page 6
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between UK, Irish and US
generally accepted accounting principles(unaudited)
(C) Shareholders' funds - equity
June 30, June 30,
2002 2001
€'000 €'000
Shareholders' equity as reported in the consolidated balance
sheets (UK and Irish GAAP) 1,041,238 693,114
Adjustments:
Pension 2,536 1,748
Unrealised gains on forward exchange contracts 4,189 4,189
Employment grants (352) (817)
Capitalised interest re aircraft acquisition programme 6,034 -
Darley Investments Limited (305) (393)
Investments - 668
Unrealised (losses)/gains on derivative financial instruments(net (15,389) 4,760
of tax)
Tax effect of adjustments (1,901) (621)
Shareholders' equity as adjusted to accord with US GAAP 1,036,050 702,648
Opening shareholders' equity under US GAAP 1,019,607 674,386
Comprehensive Income adjustments
Investments - 80
Unrealised (losses)/gains on derivative financial instruments(net (23,648) 4,760
of tax)
(23,648) 4,840
Net income in accordance with US GAAP 40,091 23,422
Closing shareholders' equity under US GAAP 1,036,050 702,648
Page 7
Ryanair Holdings plc
Management Discussion and Analysis of Results
Summary Quarter Ended June 30, 2002
Consolidated Profit and Loss
Profit after tax has increased by 68% to €39.0m, compared to
€23.2m in the previous quarter ended June 30, 2001. These results were achieved
by strong growth in passenger volumes and continued tight cost control. Total
Operating Revenues increased by 29% to €194.3m, which is slower than the
growth in passenger volumes of 38%, and highlights the company's continued
objective of driving down average fares. The combination of lower fares and the
successful launch of new routes resulted in the Passenger Load Factor increasing
from 77% to 83% during the period.
Total Operating Expenses increased by 22% to €148.9m, due to the
increased level of activity, and the increased costs, primarily fuel, staff,
route charges and airport & handling costs associated with the growth of the
airline. Marketing and Distribution costs have continued to decline due to the
increased level of direct bookings on Ryanair.com that are currently on average
in excess of 90% of total bookings. Operating Margin has as a result increased
by 4% to 23% compared to last quarter whilst Operating Profit has increased by
58% to €45.4m. Profit after Tax has increased by 68% reflecting the
strong trading performance and also the impact of the decline in the headline
corporation tax rate in Ireland. For the reasons outlined Net Margin has
increased from 15% to 20% in the quarter.
Earnings per share has risen by 61% to 5.16 euro cent, lower than the growth in
profit due to an increased number of shares in issue post the share offering in
February 2002.
Balance Sheet
Cash and Liquid Resources have increased from €899.3m at March 31, 2002
to €986.6m at June 30, 2002 reflecting the increased cash flows from the
strong trading performance during the period. An additional two aircraft were
delivered in the quarter which in addition to aircraft deposits accounted for
the bulk of the €74.1m incurred in capital expenditure. This was part
funded by the draw down of long term debt which increased, net of repayments, by
€46.5m during the period. Shareholders' Funds at June 30, 2002 have
increased to €1,041.2m, compared to €1,002.3m at March 31, 2002.
Detailed Discussion and Analysis Quarter Ended June 30, 2002
Profit after tax, increased by 68% to €39.0m driven by strong growth in
passenger volumes and continued tight cost control. Operating margins have
increased by 4% to 23% which has resulted in Operating Profit increasing by
€16.6m to €45.3m compared to quarter ended June 30, 2001.
Total Operating Revenues increased by 29% to €194.3m whilst passenger
increased by 38% to 3.5m.
Scheduled Passenger Revenues increased by 28% to €172.8m due to a
combination of increased passenger numbers on existing routes, the successful
launch of a new base at Frankfurt-Hahn, and the commencement of nineteen new
routes since Spring, primarily offset by a reduction, as expected, in average
fares.
Ancillary Revenues increased by 32% to €21.5m, reflecting strong growth
in internet related income, car rentals and other ancillary products whilst
Charter income remained static due to an increased focus on the scheduled
programme which in turn led to a reduction in seat capacity available for
charter activity.
Total Operating Expenses increased by 22% to €148.9m due to the
increased level of activity, and the increased costs primarily staff, fuel,
route charges and airport and handling costs associated with the growth of the
airline. These increases were partly offset by reductions in Marketing &
Distribution costs and Aircraft Rental costs.
Staff costs have increased by 24% to €23.4m. This increase reflects a 7%
increase in average employee numbers to 1,651. Pilots, who earn significantly
higher than the average salary, accounted for 39% of the increase in employment.
The increase in the level of activity has also resulted in an increase in the
level of productivity-based pay for both Pilots and Inflight crew. Staff costs
also rose due to the impact of pay increases, which were between 3% and 5%.
Depreciation and Amortization increased by 17% to €18.4m due to an
increase in the number of aircraft owned from 36 to 42, and the amortisation of
capitalised maintenance costs, partly offset by savings due to the increased
number of fully depreciated aircraft.
Fuel costs rose by 28% to €33.6m due to a 25% increase in the number of
hours flown, and the adverse impact of the strengthening of the US dollar to the
Euro offset by a decrease in the average US$ cost per gallon of fuel.
Maintenance costs increased by 29% to €9.4m reflecting an increase in
the size of the fleet operated and the number of hours flown.
Marketing and Distribution Costs decreased by 11% to €5.5m due to an
increase in the level of direct bookings via the internet, partly offset by a
higher spend on the advertising of 20 new routes and the launch of a new base at
Frankfurt-Hahn.
Aircraft Rental Costs declined by €2.9m reflecting the decline in the
need to rent additional seat capacity due to the delivery of new aircraft.
Route Charges increased by 43% to €16.5m due to an increase in the
number sectors flown, an increase in the weight of the fleet due to the
increased proportion of 737-800 aircraft operated, and a rise in the basic unit
cost in some countries.
Airport and Handling Charges increased by 30% to €28.2m due to an
increase in the number of passengers flown, the impact of increased airport and
handling charges on some existing routes, offset by lower charges on our new
European routes and at our new bases.
Other Expenses increased by 18% to €13.9m, which is less than the growth
in ancillary revenues reflecting improved margins on some new and existing
products, and cost reductions achieved on other indirect costs.
Operating Margins have increased by 4% due to the reasons outlined above which
has resulted in Operating Profits increasing by 58% to €45.3m during the
quarter.
Interest Receivable increased by €1.8m to €7.0m reflecting the
strong growth in cash resources arising from the profitable trading performance
during the quarter and the receipt of proceeds from a secondary offering in
February 2002. Interest Payable also increased by €1.8m due to the
higher level of debt arising from the acquisition of new aircraft.
Taxation decreased in the quarter by €0.9m to €3.5m due to a
decline in the tax rate from 15% to 10% primarily reflecting the reduction in
the headline rate of Corporation Tax in Ireland.
The Company's Balance Sheet continues to strengthen due to the strong growth in
profits during the period. The Company generated cash from operating activities
of €113.6m, which part funded the acquisition of two 737-800 aircraft
during the quarter, and advance payments for future aircraft deliveries. Total
Capital expenditure amounted to €74.1m. Long term Debt, net of
repayments, increased by €46.4m to €596.9m during the same
period. Cash and liquid resources at June 30, 2002 were €986.6m compared
to €899.3 at March 31, 2002.
Shareholders' Funds at June 30, 2002 have increased to €1,041.2m
compared to €1,002.3m at March 31, 2002.
Notes to the Financial Statements
1. Accounting Policies
The accounting policies followed in the preparation of these
consolidated financial statements for the quarter ended June 30, 2002
are consistent with those set out in the Annual Report for the year
ended March 31, 2001. The Company adopted FRS 19 'Deferred Tax' in the
period. This has no impact on the Company's results as it was already
providing for deferred tax in full.
2. Approval of the Financial Statements
The Audit Committee approved the consolidated financial statements for
the Quarter ended June 30, 2002 on August 2nd, 2002.
3. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the Quarter ended
June 30, 2002 are based on the results reported under Irish and UK GAAP.
This information is provided by RNS
The company news service from the London Stock Exchange
Tuesday, 4th June 2024
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