3rd Quarter Results
Ryanair Holdings PLC
04 February 2003
RYANAIR DELIVERS RECORD Q.3. PROFITS
Traffic grows by 46%, profits rise by 50%
Ryanair, Europe's No.1 low fares airline today (4 Feb'03) announced record
traffic and profit growth for Q.3 (end 31 Dec'02). Passenger traffic for the
quarter grew by 46% to 3.9m and average load factor jumped from 79% to 86%,
primarily due to a further 8% reduction in fares - as predicted - during the
quarter. This reduction in yields reflects the 1 million free seats promotion
last October, the launch of four new routes from Frankfurt Hahn in December, and
Ryanair's continuing policy of offering the lowest fares in all markets. Total
revenues in the quarter rose by 37%, however operating costs - rose at a slower
rate by 28%. As a result Ryanair's after tax margins, during the worst quarter
in the year increased from 21% to 23%, and Net Profit increased by 50% to
€43.2m.
Summary Table of Results (Irish GAAP) - in Euro
Quarter ended Dec 31, 2001 Dec 31, 2002 % Increase
Passengers 2.69m 3.93m + 46%
Revenue 135.5m 185.90m + 37%
Profit after tax 28.8m 43.20m + 50%
Basic EPS (Euro Cents) 3.98c 5.72c + 44%
Ryanair's Chief Executive, Michael O'Leary said;
'These are another good set of numbers which result from the disciplined
way we are rolling out our low fares all over Europe. They again
highlight the difference between Ryanair and other so called 'low fare'
carriers in Europe. We continue to earn increasing profits even during
the Winter period when others have confirmed that they will suffer
losses. Ryanair's reducing cost base enables us to continue to drive
down air fares. Lower fares mean higher load factors on our new larger
aircraft, whose lower operating costs in turn result in increased
profits. This is a virtuous cycle of lower costs, lower fares, faster
growth and increasing profits. No other airline in Europe can match
Ryanair's low fares and the gap between Ryanair's prices and the rest
continues to widen.
'We continue to be surrounded by opportunities. The average load factor
on our four new routes from Frankfurt Hahn in December was over 80%.
Advance bookings at our new Milan Bergamo base (which starts on 6
February) suggest that load factors for the first month will be in the
very high 70's if not 80% as well, and the initial customer response to
our ninth European base at Stockholm Skavsta (which we announced last
Tuesday) has been very encouraging. Based on our estimates for the final
quarter we are now raising our guidance for the full year to €235m net
profit after tax.
'We continue to limit any risks associated with our capacity growth by
spreading it across our network, launching new bases, new routes from
existing bases, and increasing frequency on existing routes. Last week
we announced our ninth European base at Stockholm Skavsta, but also five
new routes from London Stansted (to France, Holland, Norway and Germany)
and significantly increased frequency this Summer to Frankfurt (6 daily
flights), Rome (5 a day), Stockholm (5 a day), Barcelona (3 a day) among
others.
'All of this growth justifies our 100 new aircraft order which was
announced last Friday. With world-wide aircraft orders now significantly
down, there has never been a better time to buy new aircraft. We are
proud to extend our partnership with Boeing, the maker of the world's
most popular and best commercial aircraft, the Boeing 737. By ordering a
total of 125 firm and 125 option aircraft we can begin the replacement
of the 737-200 series, and maintain further organic growth across Europe
as we transform Ryanair into the airline with the youngest fleet in
Europe, in addition to being the most punctual (which we already are)
and the lowest cost (which we already are).
'The purchase of Buzz for the insignificant net cash sum of under €5m,
which was also announced last week was an opportunity too good to miss.
We will be eliminating a number of Buzz's loss making routes in order to
allocate some of the aircraft to increase frequency on existing Buzz
routes from London Stansted. The combination of Ryanair's low fares and
more efficient airports, as well as the conversion of Buzz into an all
737 operator over the next 12 months will result in the Buzz operation
becoming profitable for the first time as we double its traffic from
under 2m to over 4m pax p.a. We are aware that some commentators fear
that we are biting off more than we can chew. We are conscious of this
but one cannot always control the timing of opportunities that present
themselves. However the purchase price, made this deal in our view, a
very attractive proposition. Fortune favours the brave, and as Warren
Buffet has proven many times, the time to buy is when everyone else is
selling and prices are low. I believe that this is one of those times.
'With the addition of the Buzz traffic, and Ryanair's own organic
growth, we expect to carry up to 24 million passengers in the coming
fiscal year (end 31 March'04), a figure that would see Ryanair challenge
Air France for the position of Europe's third largest international
scheduled airline. We have the low fares formula, the people and the
unrelenting determination to achieve these targets, by delivering
disciplined, profitable, low fares growth to millions and millions of
European consumers.
'Finally a word on the recently announced EU investigation of Ryanair's
cost base at Brussels Charleroi Airport. This investigation will be the
test case for the cause of competition, choice and low fare air travel
in the European Union for the next 25 years. Many of our competitors
including high cost airports and high cost airlines will seek to use
this case to block Ryanair's rapid growth at secondary and regional
airports. They do this in the hope of imposing higher costs and higher
air fares upon consumers and to block competition and choice. They want
to return to the bad old days of high fares for the rich few. This is
wrong. The sole purpose of these incumbent complainers is to prevent the
spread of choice and lower fares and to limit the growth of low fare air
travel in Europe.
'The success of low fare airlines in the United States over the past 30
years and of Ryanair in Europe over the past 10 years depends upon
encouraging and incentivizing underused secondary and regional airports
to compete with dominant hub airports by providing lower costs and
efficient facilities to those airlines who are willing to offer lower
air fares to attract consumers to these airports. This is the very
essence of free market competition, and it is already generating
enormous savings for European consumers.
'I have every confidence that the Commissioner for Transport, Loyola de
Palacio will rule in favour of Brussels Charleroi and the Belgian
Government, as the evidence is overwhelming that (1) there is no element
of State aid in our cost base and (2) secondary and regional airports
offering lower costs and more efficient facilities allied to low fare
services provided by Ryanair and others is in the best interests of
competition and EU consumers.
'European integration and harmonisation depends upon the ease of
movement of people around the European community. For years in Europe
air travel was confined to the rich few. Ryanair has changed all of that
over the past ten years, and we are confident of the continuing support
of Commissioner de Palacio and the EU Commission as we extend and expand
the range of choice, routes, services and lower prices that we offer
European consumers.
ENDS 4TH FEBRUARY 2003
For results and further information Howard Millar Pauline McAlester
please contact: Ryanair Holdings Plc Murray Consultants
Tel: 353-1-8121212 Tel: 353-1-4980300
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 82 low fare routes across 15
countries. Ryanair has a fleet of 52 Boeing 737's, and firm orders for up to a
further 94 new 737-800's which will be delivered over the next 5 years. Ryanair
currently employs a team of 1,800 people and expect to carry approximately 15
million scheduled passengers in the current year.
www.RYANAIR.COM was launched in January 2000 and is already Europe's largest
travel website. This is the only internet site to guarantee the lowest fares on
the web.
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
with UK and Irish GAAP(unaudited)
Quarter Quarter Nine months Nine months
ended ended ended ended
Dec 31, Dec 31, Dec 31, Dec 31,
2002 2001 2002 2001
€'000 €'000 €'000 €'000
Operating Revenues
Scheduled revenues 157,407 117,142 568,514 423,634
Ancillary revenues 28,497 18,407 81,979 56,142
Total operating revenues
-continuing operations 185,904 135,549 650,493 479,776
Operating expenses
Staff costs 21,822 18,974 68,554 57,347
Depreciation and amortisation 19,014 14,541 56,877 44,691
Other operating expenses
Fuel & Oil 29,355 25,222 97,777 79,466
Maintenance, materials and repairs 6,197 5,439 23,340 19,548
Marketing and distribution costs 2,865 1,115 10,972 10,525
Aircraft rentals - 101 - 3,980
Route charges 15,944 11,092 49,694 35,548
Airport and Handling charges 26,224 20,343 82,430 65,190
Other 15,772 10,581 44,643 34,322
Total operating expenses 137,193 107,408 434,287 350,617
Operating profit - continuing operations 48,711 28,141 216,206 129,159
Other income/(expenses)
Interest receivable and similar income 8,187 8,205 24,192 20,828
Interest payable and similar charges (8,083) (4,625) (22,137) (13,776)
Foreign exchange (losses)/gains (1,012) 1,228 (1,733) (1,353)
(Loss)/gain on disposal of fixed assets (8) 1 (29) 527
Total other income/(expenses) (916) 4,809 293 6,226
Profit on ordinary activities
before taxation 47,795 32,950 216,499 135,385
Tax on profit on ordinary activities (4,643) (4,114) (22,401) (18,511)
Profit for the period 43,152 28,836 194,098 116,874
Earnings per ordinary share
-Basic(Euro cent) 5.72 3.98 25.71 16.13
-Diluted(Euro cent) 5.63 3.92 25.34 15.91
Number of ordinary shares(in 000's)*
-Basic 755,031 724,613 755,031 724,356
-Diluted 766,705 734,989 765,853 734,510
*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
December 31, March 31,
2002 2002
€'000 €'000
Unaudited
Fixed assets
Tangible assets 1,165,767 951,806
Current Assets
Cash and liquid resources 1,040,854 899,275
Accounts receivable 13,910 10,331
Other assets 16,928 11,035
Inventories 18,706 17,125
Total current assets 1,090,398 937,766
Total assets 2,256,165 1,889,572
Current liabilities
Accounts payable 75,148 46,779
Accrued expenses and other liabilities 205,606 217,108
Current maturities of long term debt 52,820 38,800
Short term borrowings 1,795 5,505
Total current liabilities 335,369 308,192
Other liabilities
Provisions for liabilities and charges 59,907 49,317
Accounts payable due after one year 5,161 18,086
Long term debt 659,356 511,703
724,424 579,106
Shareholders' funds - equity
Called - up share capital 9,587 9,587
Share premium account 553,457 553,457
Profit and loss account 633,328 439,230
Shareholders' funds - equity 1,196,372 1,002,274
Total liabilities and shareholders' funds 2,256,165 1,889,572
Page 2
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statements in accordance
with UK and Irish GAAP (unaudited)
Ryanair Ryanair
Holdings plc Holdings plc
Nine months Nine months
ended ended
Dec 31, Dec 31,
2002 2001
€'000 €'000
Net cash inflow from operating activities 260,950 191,782
Returns on investments and servicing of finance (4,257) 6,022
Taxation (2,212) (4,533)
Capital expenditure(including aircraft deposits) (270,867) (165,978)
Acquisitions and disposals - 0
Aircraft deposits 0 0
Net cash (outflow)/inflow before financing
and use of liquid resources (16,386) 27,293
Financing 161,675 76,695
(Increase) in liquid resources (156,153) (117,574)
(Decrease) in cash (10,864) (13,586)
Analysis of movement in liquid resources
Liquid resources at beginning of year 816,023 564,782
Increase in period 156,153 117,574
Liquid resources at end of period 972,176 682,356
Analysis of movement in cash
At beginning of year 77,747 56,860
Net cash outflow (10,864) (13,586)
Net cash at end of period 66,883 43,274
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 period - - 194,098 194,098
Balance at December 31, 2002 9,587 553,457 633,328 1,196,372
Page 4
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
with US GAAP (unaudited)
Quarter Quarter Nine months Nine months
ended ended ended ended
Dec 31, Dec 31, Dec 31, Dec 31,
2002 2001 2002 2001
€'000 €'000 €'000 €'000
Operating Revenues
Scheduled revenues 157,407 117,142 568,514 423,634
Ancillary revenues 28,497 18,407 81,979 56,142
Total operating revenues
-continuing operations 185,904 135,549 650,493 479,776
Operating expenses
Staff costs 21,558 18,773 67,780 56,744
Depreciation and amortisation 19,014 14,541 56,877 44,691
Other operating expenses
Fuel & Oil 29,355 25,222 97,777 79,466
Maintenance, materials and repairs 6,197 5,439 23,340 19,548
Marketing and distribution costs 2,865 1,115 10,972 10,525
Aircraft rentals - 101 - 3,980
Route charges 15,944 11,092 49,694 35,548
Airport and Handling charges 26,224 20,343 82,430 65,190
Other 15,750 10,559 44,577 34,256
Total operating expenses 136,907 107,185 433,447 349,948
Operating profit - continuing operations 48,997 28,364 217,046 129,828
Other income/(expenses)
Interest receivable and similar income 8,187 8,205 24,192 20,828
Interest payable and similar charges (6,492) (4,625) (18,406) (13,776)
Foreign exchange losses (1,012) 1,228 (5,922) (1,353)
(Loss)/gain on disposal of fixed assets (8) 1 (29) 527
Total other income/(expenses) 675 4,809 (165) 6,226
Profit on ordinary activities
before taxation 49,672 33,173 216,881 136,054
Tax on profit on ordinary activities (4,869) (4,131) (22,091) (18,562)
Net Income 44,803 29,042 194,790 117,492
Net Income per ADS *
-Basic(Euro cent) 29.67 20.04 128.99 81.10
-Diluted(Euro cent) 29.22 19.76 127.17 79.98
Weighted Average number of shares*
-Basic 755,031 724,613 755,031 724,356
-Diluted 766,705 734,989 765,853 734,510
*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----> <----Nine months ended--->
Dec 31, Dec 31, Dec 31, Dec 31,
2002 2001 2002 2001
€000 €000 €'000 €'000
Profit as reported in the consolidated profit and
loss accounts in accordance with UK and Irish GAAP 43,152 28,836 194,098 116,874
Adjustments
Pension 148 85 425 255
Derivative financial instruments(net of tax) - - (4,189) -
Employment grants 116 116 349 348
Capitalised interest re aircraft acquisition programme 1,591 - 3,731 -
Darley Investments Limited 22 22 66 66
Tax effect of adjustments (226) (17) 310 (51)
Net income under US GAAP 44,803 29,042 194,790 117,492
(B) Consolidated Cashflow Statements in accordance
with US GAAP
<----Nine months ended--->
Dec 31, Dec 31,
2002 2001
€'000 €'000
Cash inflow from operating activities 254,481 193,271
Cash (outflow) from investing activities (233,687) (112,455)
Cash inflow from financial activities 157,965 71,870
Increase in cash and cash equivalents 178,759 152,686
Cash and cash equivalents at beginning of year 482,492 389,059
Cash and cash equivalents at end of year 661,251 541,745
Cash and cash equivalents under US GAAP 661,251 541,745
Deposits with a maturity of between three and six months 379,603 184,138
Cash and liquid resources under UK and Irish GAAP 1,040,854 725,883
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
Dec 31, Dec 31,
2002 2001
€'000 €'000
Shareholders' equity as reported in the consolidated balance
sheets (UK and Irish GAAP) 1,196,372 787,131
Adjustments:
Pension 2,839 1,918
Employment grants (120) (585)
Capitalised interest re aircraft acquisition programme 8,758 -
Darley Investments Limited (261) (349)
Derivative financial instruments(net of tax) (68,528) 6,021
Tax effect of adjustments (1,450) (655)
Shareholders' equity as adjusted to accord with US GAAP 1,137,610 793,481
Opening shareholders' equity under US GAAP 1,019,607 674,386
Comprehensive Income adjustments
Investments - (588)
Unrealised (losses)/gains on derivative financial instruments(net of tax) (76,787) 1,832
(76,787) 1,244
Net income in accordance with US GAAP 194,790 117,492
Stock issued for cash - 359
Closing shareholders' equity under US GAAP 1,137,610 793,481
Page 7
Ryanair Holdings plc
Management Discussion and Analysis of Results
Summary Quarter Ended December 31, 2002
Consolidated Profit and Loss
Profit after tax has increased by 50% to €43.2m, compared to €28.8m in the
previous quarter ended December 31, 2001 driven principally by the strong growth
in passenger volumes and continued tight cost control. Total Operating Revenues
increased by 37% to €185.9m, whilst scheduled revenues grew by 34% to €157.4m
due to a combination of a 46% growth passenger volumes, offset by an 8% decline
in average fares. The combination of lower fares and the successful launch of
new routes resulted in the Passenger Load Factor increasing from 79% to 86%
(albeit at the expense of yields) during the period. Ancillary Revenues
increased by 55% to €28.5m and have continued to grow at a faster rate than the
increase in passenger volumes during the period.
Total Operating Expenses increased by 28% to €137.2m, due to the increased level
of activity, and the increased costs, primarily depreciation, route charges and
airport & handling costs associated with the growth of the airline. All major
costs increased at a lower rate than the growth in passenger volumes due to a
combination of increased staff productivity, improved operational efficiencies
and our policy of hedging fuel and foreign currency requirements. Marketing and
Distribution increased by €1.8m to €2.9m reflecting a higher level of
advertising spend due to the launch of a new base and routes during the period.
Operating Margin has increased by 5 points to 26% compared to last quarter
whilst Operating Profit has increased by 73% to €48.7m. Profit after Tax has
increased by 50% 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 21% to 23% in the quarter.
Earnings per share has risen by 44% to 5.7 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
€1,040.9m at December 31, 2002, reflecting the increased cash flows from the
profitable trading performance during the period. An additional eight aircraft
were delivered, five in the last quarter, which in addition to aircraft deposits
accounted for the bulk of the €270.9m incurred in capital expenditure. This was
part funded by the draw down of long term debt which increased, net of
repayments, by €161.7m during the period. Shareholders' Funds at December 31,
2002 have increased to €1,196.4m, compared to €1,002.3m at March 31, 2002.
Summary - Nine months ended December 31,2002
Profit after tax has increased by 66% to €194.1m, compared to €116.9m in the
previous nine months ended December 31, 2001 driven by continued strong growth
in passenger volumes and tight cost control. Operating margins have increased by
6 points to 33% which has resulted in Operating Profit increasing by €87.0m to
€216.2m compared to nine months ended December 31, 2001.
Total Operating Revenues grew by 36% to €650.5m whilst passengers numbers have
increased by 40% to 11.8m.
Scheduled Passenger revenues increased by 34% to €568.5m due to strong passenger
volume growth, offset by a 4% decline in average fares during the period.
Passenger growth was particularly strong at our two European bases,
Brussels-Charleroi and Frankfurt Hahn. Ancillary Revenue grew by 46% to €82.0m,
faster than the growth in passenger volumes and primarily reflects the growth in
Car Hire, On-board sales, non-flight scheduled revenue, and income generated
from Ryanair.com. Charter income declined due to a reduction in the level of
seat capacity allocated to the Charter programme compared to last year.
Total Operating Expenses increased by 24% to €434.3m due to the increased level
of activity, and the increased costs, primarily fuel, depreciation, route
charges and airport & handing costs associated with the growth of the airline.
Operating costs rose at a slower rate than the growth in revenues reflecting the
positive impact on costs due to the introduction of the 737-800 aircraft to the
fleet.
Net margins have as a result of above increased from 24% to 30% whilst Net
Profit increased by 66% to €194.1m.
Earnings per share has risen by 59% to 25.71 euro cent, which is lower than the
growth in net profit due to an increased number of shares in issue post the
share offering in February 2002.
Detailed Discussion and Analysis - Quarter Ended December 31, 2002
Profit after tax has increased by 50% to €43.2m driven by strong growth in
passenger volumes and continued tight cost control. Operating margins have
increased to 26% from 21% in the comparative period whilst Operating Profit
increased by 73% to €48.7m compared to the quarter ended December 31,
2001.Profit before tax increased by 45% to €47.8m.
Total Operating Revenues increased by 37% to €185.9m whilst passenger volumes
increased by 46% to 3.9m.
Scheduled Passenger Revenues increased by 34% to €157.4m, reflecting the
increase in passenger volumes arising from the successful launch of new routes
and the new base at Frankfurt-Hahn offset by a decline in average fares of 8%
during the quarter.
Ancillary Revenues increased by 55% to €28.5m, which is higher than the growth
in passenger volumes, and reflects strong growth in all areas of ancillary
revenues particularly hotel, travel insurance and internet related activities.
Total Operating Expenses increased by 28% to €137.2m due to the increased level
of activity, and the increased costs primarily depreciation, fuel, route charges
and airport & handling costs associated with the growth of the airline.
Staff costs have increased by 15% to €21.8m. This increase reflects a 13%
increase in average employee numbers to 1,761. Pilots, who earn higher than the
average salary, accounted for 52% of the increase in employment.
Depreciation and Amortisation increased by 31% to €19.0m due to an increase in
the number of aircraft owned from 39 to 49 and the amortisation of capitalised
maintenance costs, offset by savings arising from the increase in the number of
fully depreciated aircraft.
Fuel costs rose by 16% to €29.4m due to a 35% increase in the number of hours
flown, offset by a lower US$ cost per gallon of fuel and an improvement in the
fleet fuel burn rate due to a higher proportion of 737-800 aircraft operated.
Maintenance costs increased by 14% to €6.2m reflecting an increase in the size
of the fleet operated, an increase in the number of flight hours, offset by
maintenance savings arising from the increase in the number of 737-800 aircraft
operated.
Marketing and Distribution Costs increased by €1.8m to €2.9m due to increased
marketing and advertising costs associated with the launch of new routes and
bases, and the costs incurred from promoting various seat sales during the
period.
Aircraft Rental Costs did not arise during the period reflecting the reduced
requirement to rent additional seat capacity arising from the delivery of the
new 737-800 aircraft.
Route Charges increased by 44% to €15.9m due to a 35% increase in the number of
flight hours flown, an increase in the weight of aircraft operated which incur a
higher charge, and an increase in the basic unit rate in some countries.
Airport and Handling Charges increased by 29% to €26.2m which is less than the
growth in passenger volumes and reflects the lower charges on our new European
routes and at our new bases.
Other Expenses increased by 49% to €15.8m, which is slightly less than the
growth in ancillary revenues reflecting improved margins on some new and
existing products.
Operating Profits have increased by 73% to €48.7m due to the reasons outlined
above.
Interest Receivable has remained at €8.2m despite an increase in the level of
cash and liquid resources and reflects the lower interest rate environment that
existed during the period. Interest Payable increased by €3.4m to €8.1m due to
the increased level of debt arising from the acquisition of new aircraft.
Foreign exchange losses of €1.0m arose on the conversion of sterling bank
balances at period end rates.
Taxation increased 13% to €4.6m, less than the growth in profits primarily due
to the continued decline in the headline rate of Corporation Tax in Ireland.
Detailed Discussion and Analysis - Nine months ended December 31, 2002
Profit after tax has increased by 66% to €194.1m driven by strong growth in
passenger volumes and continued tight cost control and as a result Net margins
have increased by 6 points to 30% from 24% in the comparative period.
Total Operating Revenues increased by 36% to €650.5m whilst passenger volumes
increased by 40% to 11.8m.
Scheduled Passenger Revenues increased by 34% to €568.5m primarily due to
increased passenger numbers on new and existing routes, partly offset by a 4%
decline in average fares.
Ancillary Revenues increased by 46% to €82.0m, which is higher than the growth
in passenger volumes, and reflects increases in car hire revenues, other
ancillary product revenues, and internet-related revenues, offset by a reduction
in Charter revenues due to the continued focus on the scheduled operation.
Total Operating Expenses increased by 24% to €434.3m due to the increased level
of activity, and the increased costs primarily staff, depreciation, fuel, route
charges and airport & handling costs associated with the growth of the airline.
Staff costs have increased by 20% to €68.6m. This increase reflects a 9%
increase in average employee numbers to 1,696. Pilots, who earn higher than the
average salary, accounted for 51% 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.
Depreciation and Amortisation increased by 27% to €56.9m due to an increase in
the number of aircraft owned from 41 to 49 and the amortisation of capitalised
maintenance costs offset by savings due to the increase in the number of
aircraft fully depreciated.
Fuel costs rose by 23% to €97.8m due to a 30% 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 19% to €23.3m reflecting an increase in the size
of the fleet operated, and an increase in the number of flight hours offset by
savings due to improved reliability arising from the higher proportion of
737-800 aircraft as a percentage of the total fleet.
Marketing and Distribution Costs increased by 4% to €11.0m due to a higher spend
on the promotion of new routes and the launch of new bases at Brussels-Charleroi
and Frankfurt-Hahn partly offset by savings arising from an increase in the
level of direct bookings via the internet.
Aircraft Rental Costs did not arise during the period reflecting the reduced
requirement to rent additional seat capacity arising from the delivery of the
new 737-800 aircraft.
Route Charges increased by 40% to €49.7m due to an increase in the number of
sectors flown, an increase in the weight of aircraft operated which incur a
higher charge, an increase in the average sector length and an increase in the
basic unit cost in some countries.
Airport and Handling Charges increased by 26% to €82.4m due to an increase in
the number of passengers flown, and 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 30% to €44.6m, which is less than the growth in
ancillary revenues due to improved margins on some new and existing products,
and cost reductions achieved on other indirect costs.
Operating margins have increased to 33% due to the reasons outlined above and
this has resulted in Operating Profits increasing by 67% to €216.2m during the
period.
Interest Receivable increased by €3.4m to €24.2m reflecting the strong growth in
cash resources arising from the profitable trading performance during the period
and the receipt of proceeds from the secondary offering in February 2002.
Interest Payable increased by €8.4m to €22.1m due to the increased level of debt
arising from the acquisition of new aircraft.
Foreign exchange losses arose primarily due to the conversion of sterling bank
balances to euro at the period end. The losses have increased during the last
quarter due to the strengthening of the Euro against Sterling.
Taxation has increased by 21% during the period, less than the growth in pre-tax
profits and primarily reflects the continued decline in the headline rate of
Corporation Tax in Ireland.
The Company's Balance Sheet continues to benefit from the strong growth in
profits. Tangible fixed assets increased to €1,165.8m from €951.8m principally
as a result of the delivery of eight additional aircraft since March 31, 2002
and the payment of deposits for new deliveries. The Company generated cash from
operating activities of €261.0m, which funded advance payments on future
deliveries whilst the balance is reflected in the higher cash and liquid
resources figure of €1,040.9m. Total Debt has increased by a further €161.7m,
net of repayments, since March 31, 2002 to €712.2m. Shareholder's Funds at
December 31, 2002 have increased to €1,196.4m 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 nine months ended December 31,
2002 are consistent with those set out in the Annual Report for the year
ended March 31, 2002.
2. Approval of the Financial Statements
The Audit Committee approved the consolidated financial statements for
the Quarter and nine months ended December 31, 2002 on February 3rd,
2003.
3. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the Quarter and
nine months ended December 31, 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
Monday, 20th May 2024
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