3rd Quarter & 9 Months Results - Profits Up 33%
Ryanair Holdings PLC
8 February 2000
RYANAIR ANNOUNCES RECORD
3RD QUARTER RESULTS
Profits up 33% as 'low fares' and new routes continue to thrive
Ryanair Holdings Plc today (8 February, 2000) announced record financial
results for the quarter ended December 31, 1999. Total revenues grew by
35% to £70.6m, reflecting a 17% increase in passenger volumes to 1.4m, an
increase in average yields due to a longer sector length, and the strength
of Sterling. Operating expenses increased by 36% which, as expected, was
fractionally ahead of revenue growth reflecting the increased costs
(primarily staff and airport costs) associated with the growth of the
airline, and the launch of our eighth new route. As a result profits
increased by 33% to a new record of £12.6m for the quarter.
Summary of Results (Irish GAAP)
Quarter End Dec 31, 1999 Dec 31, 1998 %
Increase
Passengers 1.4m 1.2m 17%
Revenue IR£70.6m IR£52.5m 35%
Profit after tax IR£12.6m IR£9.4m 33%
Basic EPS 7.50p 5.64p 33%
Commenting on these results in London today, Ryanair's CEO, Michael
O'Leary said;
'These are another set of excellent results which confirm the
strength of Ryanair's 'low fares' formula even on new European
routes during the off-peak Winter months. During a quarter
when both British Airways and its low fares subsidiary cut back
capacity and introduced further restrictions on low fares,
Ryanair continued to expand by launching low fare routes from
London to Aarhus (Denmark) and we increased our schedules to
Frankfurt, Stockholm and Glasgow, whilst at the same time
growing traffic and profitability.
Our rigorous cost control policy continues to pay dividends.
Unlike most of our high fare competitors Ryanair has fully
hedged our fuel requirements throughout the year 2000, and we
intend to use this and other savings to offer our passengers
even more lower air fares, this year. We are increasing our
frequency and lowering our prices on the Stansted-Dublin and
Stansted-Glasgow routes, in particular, to ensure that
consumers won't suffer as a result of the withdrawal of Aer
Lingus and KLM UK respectively. Whilst British Airways and
other competitors try to reduce capacity and raise fares
Ryanair will do the opposite, by continuing to offer the lowest
air fares on more and more seats to and from the UK.
We were disappointed that the Irish government permitted the
Dublin Airport monopoly to increase costs for all airlines from
1 January, and this has already resulted in the average cost of
air travel to and from Ireland rising for the first time since
1986. Dublin Airport will, once again, lose out as all of our
new routes this year will operate between the UK and Europe.
Our 5 new aircraft which deliver in May and June will be based
in the UK. In late February we will announce at least 7 new
routes from the UK to Europe, and we expect to grow our traffic
from just under 6 million to over 7 million passengers in the
coming year.
Market conditions for further growth to and from the UK are
favourable. British Airways strategy of carrying fewer non-
premium passengers, reducing capacity on loss making short-haul
routes, and allowing travel agents to introduce service fees
can only help our growth. The recent decision of 'GO' to
impose a Saturday night stay restriction on all promotional
fares, thereby increasing average fares and yields, effectively
removes the British Airways group from the low fares sector.
While this is probably the correct strategy for BA with its
high cost base, it will encourage Ryanair to grow aggressively.
The most notable feature of our current trading remains the
strength of Sterling which is somewhat artificially enhancing
our yields. Whilst this looks like remaining a feature over
the near term we still believe that over time, Sterling will
weaken against the Euro, and will have a negative effect on
yields. In the meantime we remain happy with current trading
and comfortable with the present range of analysts forecasts
for the full year outcome.
Apart from the addition of five more new and efficient
aircraft, this Summer we expect to generate significant cost
efficiencies from the launch of 'RYANAIR.COM' our new internet
booking site and ticketless travel facility. This was
successfully introduced three weeks ago and its potential
impact on sales and distribution costs is enormous. During the
course of our latest seat sale last weekend (5th and 6th Feb)
almost 50% of bookings were made on the RYANAIR.COM site
generating substantial savings in travel agent commissions and
reservation system fees. We will aggressively promote
RYANAIR.COM in the UK and Europe, we intend to establish it as
the low fares website for Europe, using headline sponsorships
with Sky News and regular, internet only, seat sales and low
fare promotions.
The next few months will be exciting ones in Ryanair. Whilst
market conditions will remain tough, we will add new aircraft,
launch new routes, promote RYANAIR.COM, create 250 new highly
paid jobs in the UK, and offer even lower fares to consumers on
our existing and new European routes. Ryanair is now the 9th
largest international airline in Europe, and with our
outstanding people, our unmatched low fares and our new Boeing
aircraft we remain on course to grow our business and further
solidify our leadership of the low fares airline sector in
Europe.'
Ryanair also announced that a stock split, which was approved by the
shareholders at the Annual General Meeting in September 1999 and will
become effective on Monday 28th February 2000. The purpose of the stock
split is to improve the marketability and liquidity of the stock. The
last date of dealings in the existing Ordinary shares will be Friday 25
February 2000, and the existing ratio of five ordinary shares to one ADR
will be retained. For further details please see the attached
announcement.
For results and further information Howard Millar Pauline McAlester
please contact: Ryanair Holdings PlcMurray Consultants
www.Ryanair.com Tel: 353-1-8121212 Tel: 353-1-6614666
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 Holdings plc
Announcement
Sub-Division of Each Ordinary Share of IR4p each into
2 Ordinary Shares of IR2p Each
The Directors of Ryanair Holdings plc ('Ryanair' or the 'Company') have
resolved to implement the sub-division of the Company's Ordinary Shares
of IR4p into Ordinary Shares of IR2p (the 'Stock Split') which was
approved by Ryanair shareholders at the Annual General Meeting of the
Company held on 14 September, 1999. The Stock Split is intended to
increase the liquidity and marketability of the stock by reducing the
absolute price per share. The Stock Split is expected to become effective
on Monday 28 February, 2000. Following the Stock Split, shareholders will
own two Ordinary Shares in the Company for each one Ordinary Share they
owned as at the record date (close of business on 25 February 2000).
Subject to market movements, it is expected that the price of each sub-
divided Ordinary Share on the Irish and London Stock Exchanges (the
'Stock Exchanges'), on the day the Stock Split becomes effective, will be
one half of the price of an Ordinary Share on the Stock Exchanges prior
to the Stock Split.
The Company's authorised ordinary share capital prior to the Stock Split
will be IR£8,400,000 divided into 210,000,000 Ordinary Shares of IR4p
each and the Company's issued ordinary share capital will be IR£6,696,993
divided into 167,424,814 Ordinary Shares of IR4p each. Following the
Stock Split, the total value of the authorised ordinary share capital of
the Company will remain at IR£8,400,000, but will be divided into
420,000,000 Ordinary Shares of IR2p each and the total value of the
issued ordinary share capital of the Company will similarly remain at
IR£6,696,993 but will be divided into 334,849,628 Ordinary Shares of IR2p
each. The Stock Split will not result in new Ordinary Shares being issued
by the Company or becoming available in whole or in part to the public.
The Ordinary Shares created pursuant to the Stock Split will carry the
same rights in all respects as the Ordinary Shares in existence prior to
the Stock Split, including full voting rights and rights to participate
in any dividend of the Company and in any surplus on a winding up, and
will be transferable in the same manner as Ordinary Shares in existence
prior to the Stock Split. The Ordinary Shares created pursuant to Stock
Split will be in registered form and may be held in certificated or
uncertificated form.
Application will be made to the Stock Exchanges for admission of the sub-
divided Ordinary Shares to the Official List of both Exchanges. If
admission is granted, the last day of dealings in the Ordinary Shares of
IR4p each will be Friday 25 February, 2000 and the effective date for
dealings to commence in the sub-divided Ordinary Shares of IR2p each will
be Monday 28 February, 2000. New share certificates, reflecting the sub-
divided Ordinary Shares, will be issued to Ryanair shareholders on
request in exchange for their existing share certificates and as the
Company's Registrars receive old share certificates for the purpose of
processing share disposals or transfers in the normal course of business.
Existing share certificates for Ordinary Shares of IR4p each remain
valid, but will represent twice the number of Ordinary Shares stated on
the certificate. The Company's Registrars are Bank of Ireland
Registration Department, 4th Floor, Hume House, Ballsbridge, Dublin 4
(phone: 00 353 1 660 5666).
Assuming admission to the Official Lists is granted, the CREST accounts
of holders of uncertificated Ordinary Shares will be credited with the
sub-divided Ordinary Shares at the start of business on 28 February,
2000.
With regard to the Company's American Depository Shares ('ADSs'), the
existing ADS ratio, where one ADS represents five Ordinary Shares will
remain. Following the Stock Split the number of ADS's held by an ADR
holder as of the record date will be doubled. Trading in the ADS's on
the Nasdaq National Market will reflect the Stock Split as of the open of
trading on Monday, 28 February, 2000. ADS holders need take no action.
ADS accounts held in book entry form will be credited with a 100%
distribution while registered holders will receive a 100% distribution in
the mail. The record date for the Stock Split will be the close of
business in Dublin on Friday 25 February, 2000 with regard to the
Ordinary Shares and close of business in New York on Friday 25 February,
2000 with regard to the ADS's.
Ryanair Holdings plc and Subsidiaries
Consolidated Profits and Loss Accounts in accordance
with UK and Irish GAAP (unaudited)
Nine Nine
Quarter Quarter Months Months
Ended Ended Ended Ended
Dec 31, Dec 31, Dec 31 Dec 31
1999 1998 1999 1998
IR'000 IR'000 IR'000 IR'000
Operating Revenues
Scheduled revenues 63,147 45,988 199,326 160,567
Ancillary revenues 7,428 6,466 24,430 22,343
Total operating revenues
continuing operations 70,575 52,454 223,756 182,910
Operating expenses
Staff costs 9,792 7,517 28,358 23,004
Depreciation 8,884 6,886 25,536 21,321
Other operating expenses
Fuel & Oil 8,445 6,718 25,038 22,350
Maintenance, materials and 3,903 2,598 10,140 7,762
repairs
Marketing and distribution 5,722 3,956 18,761 15,314
costs
Aircraft rentals 267 241 1,394 1,994
Route charges 5,174 4,016 15,610 12,756
Airport and Handling charges 8,396 5,079 25,393 17,921
Other 6,358 4,957 18,358 15,855
Total operating expenses 56,941 41,968 168,588 138,277
Operating profit-continuing
operations 13,634 10,486 55,168 44,633
Other income/(expenses)
Interest receivable and
similar income 1,502 1,551 4,045 3,927
Interest payable and similar (1,047) (34) (2,137) (141)
charges
Foreign exchange 833 144 726 226
gains/(losses)
Gains on disposal of fixed 732 0 732 21
assets
Total other income/(expenses) 2,020 1,661 3,366 4,033
Profit on ordinary activities
before taxation 15,654 12,147 58,534 48,666
Tax on profit on ordinary (3,102) (2,700) (12,586) (12,006)
activities
Profit for the financial 12,552 9,447 45,948 36,660
period
Basic earnings per ordinary
share 7.50 5.64 27.44 22.37
(IR Pence)
Fully diluted earnings per
ordinary share (IR pence) 7.43 5.64 27.21 22.37
Number of ordinary shares (in 167,425 167,425 167,425 163,888
000's)
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheets in accordance with
UK and Irish GAAP
December 31, March 31,
1999 1999
IR'000 IR'000
(unaudited)
Fixed Assets
Tangible assets 240,499 160,264
Financial assets 28 42
Total Fixed Assets 240,527 160,306
Current Assets
Cash and liquid 166,313 124,904
resources
Accounts receivable 12,184 14,550
Other assets 5,839 4,966
Inventories 9,590 10,173
Total current assets 193,926 154,593
Total assets 434,453 314,899
Current liabilities
Accounts payable 15,945 24,229
Accrued expenses and
other 66,423 61,408
Liabilities
Current maturities of
long term debt 6,459 1,390
Short term borrowings 1,029 3,066
Total current 89,856 90,093
liabilities
Other liabilities
Provisions for
liabilities and charges 9,647 8,881
Long Term debt 91,352 18,275
100,999 27,156
Shareholder's funds -
equity
Called -up share capital 6,697 6,697
Share Premium Account 102,861 102,861
Profit and loss account 134,040 88,092
Shareholder's funds - 243,598 197,650
equity
Total liabilities and
shareholders' funds 434,453 314,899
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statements in Accordance
with UK and Irish GAAP (unaudited)
Nine Nine
Months Months
Ended Ended
Dec 31, Dec 31,
1999 1998
IR'000 IR'000
Net cash inflow from operating 80,778 69,805
activities
Returns on investments and
servicing of finance 1,783 2,571
Taxation (12,237) (8,973)
Capital expenditure (including
aircraft deposits) (105,024) (47,962)
Net cash inflow before financing
and use of liquid resources (34,700) 15,441
Financing 78,146 45,460
(Increase) in liquid resources (37,961) (62,241)
Increase/(decrease)in cash 5,485 (1,340)
Analysis of movement in liquid
resources
Liquid resources at beginning of 108,715 46,197
period 37,961 62,241
Increase in period
Liquid resources at end of period 146,676 108,438
Analysis of movement in cash
At beginning of period 13,123 3,168
Net cash inflow/(outflow) 5,485 (1,340)
Net cash at end of period 18,608 1,828
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
shares account loss Total
account
IR£'000 IR'000 IR'000 IR'000
Balance at April 1, 6,697 102,861 88,092 197,650
1999
Profit for the - - 45,948 45,948
period ------ ------ ------ ------
Balance at Dec 31, 6,697 102,861 134,040 243,598
1999
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Account in Accordance with US GAAP
(unaudited)
Quarter Quarter Nine Nine
Ended Ended Months Months
Dec Dec Ended Ended
31, 31, Dec Dec
1999 1998 31, 31,
1999 1998
IR'000 IR'000 IR'000 IR'000
Operating Revenues
Scheduled revenues 63,147 45,988 199,326 160,567
Ancillary revenues 7,428 6,466 24,430 22,343
Total operating revenues
- continuing operations 70,575 52,454 223,756 182,910
Operating expenses
Staff costs 9,752 7,507 28,238 22,546
Depreciation 8,503 5,445 24,385 16,516
Other operating expenses
Fuel & Oil 8,445 6,718 25,038 22,350
Maintenance, materials and 3,903 6,674 10,140 21,478
repairs
Marketing and distribution costs 5,722 3,956 18,761 15,314
Aircraft rentals 267 241 1,394 1,994
Route charges 5,174 4,016 15,610 12,756
Airport and Handling charges 8,396 5,079 25,393 17,921
Other 6,341 4,940 18,307 15,804
Total operating expenses 56,503 44,576 167,266 146,679
Operating profit - continuing
operations 14,072 7,878 56,490 36,231
Other income/(expenses)
Interest receivable and similar 1,502 1,551 4,045 3,927
income
Interest payable and similar
charges (1,047) (34) 2,137) (141)
Foreign exchange gains/(losses) 765 (411) 305 1,979
Gains on disposal of fixed 732 0 732 21
assets
Total other income/(expenses) 1,952 1,106 2,945 5,786
Profit on ordinary activities
before taxation 16,024 8,984 59,435 42,017
Tax on profit on ordinary
activities (3,089) (1,560) (12,487) (9,393)
Profit for the financial period 12,935 7,424 46,948 32,624
Basic earnings per ordinary
share (IR Pence) 7.73 4.43 28.04 19.91
Diluted earnings per ordinary
share (IR pence) 7.66 4.43 27.80 19.91
Basic earnings per ADS (IR 38.63 22.17 140.21 99.53
pence)*
Diluted earnings per ADS (IR 38.30 22.17 139.00 99.53
pence)* 167,425 167,425 167,425 163,888
Number of ordinary shares (in
000's)
*Each ADS represents five
ordinary shares
Note 1 - Restatement of Comparative Results
In accordance with US accounting rules, changes in accounting policies
result in a one time charge, known as a cumulative catch up adjustment,
in the quarter in which the change is made. This contracts with Irish/UK
accounting principles under which the impact of a change in accounting
policy is recorded in the quarter and years impacted and historical
financial statements are re-stated.
As a result, the consolidated US GAAP profit and loss accounts of
Ryanair Holdings plc & subsidiaries set out above are not comparable as
the basis of accounting for maintenance impacting on maintenance
expense, depreciation and taxation is significantly different in 1999
than 1998.
If the US GAAP results had been re-stated for the change in accounting
policy Net Income for the quarter to December 31,1998 and for the nine
months to December 31, 1998 would have increased to IR£9.5million and
IR£39.6million respectively and basic earnings per ADS (Irish pence)
would have increased to IR28.45pence and IR120.95pence respectively.
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 Quarter Nine Nine
Ended Ended Months Months
Ended Ended
Dec 31, Dec 31, Dec 31 Dec 31,
1999 1998 1999 1998
IR'000 IR'000 IR'000 IR'000
Profit as reported in the
consolidated profit and loss
accounts and in accordance
with UK and Irish GAAP 12,552 9,447 45,948 36,660
Adjustments
Pension 35 23 105 68
Unrealised (losses)/gains
forward exchange contracts (68) (555) (421) 1,753
Employment grants 17 (1) 51 425
Depreciation on tangible
fixed assets:
- basis of accounting for
August 1996 transaction 294 345 890 1,035
- basis of accounting for
aircraft acquired from
Northill Limited 87 87 261 261
Darley Investments Limited 17 17 51 51
Share option compensation (12) (12) (36) (36)
expense
Taxation effect of above 13 174 99 (571)
Effect of changes in
accounting policies:
Maintenance and
depreciation 0 (3,067) 0 (10,206)
Tax 0 966 0 3,184
Net income in accordance 12,935 7,424 46,948 32,624
with US GAAP
(B) Consolidated Cashflow
Statements in accordance
with US GAAP
Nine Nine
Months Months
Ended Ended
Dec 31, Dec 31,
1999 1998
IR£000 IR£000
Cash Inflow from operating
activities 70,325 63,403
Cashflow from investing
activities (137,391) (68,430)
Cashflow from financing
activities 76,109 46,549
Increase in cash and cash 9,043 41,522
equivalents
Cash and cash equivalents at
beginning of period 76,948 43,605
Cash and cash equivalents at
end of period 85,991 85,127
Cash and cash equivalents
under US GAAP 85,991 85,127
Deposits with a maturity of
between three and six months 80,322 27,833
Cash and liquid resources
under UK and Irish GAAP 166,313 112,960
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between UK, Irish and US generally
accepted
accounting principles (continued) (unaudited)
(C) Shareholders' Funds Dec Dec
equity 31,1999 31,1998
IR'000 IR'000
Shareholders' equity as
reported in the
consolidated balance
sheets (UK and Irish 243,598 190,860
GAAP)
Adjustments:
Pension 546 418
Unrealised gains on
forward exchange 478 275
contracts
Employment grants (477) (429)
Basis of accounting for
August 1996 transactions (1,888) (4,530)
Basis of accounting for
aircraft acquired from
Northill Limited (228) (576)
Darley Investments (413) (481)
Limited
Share option compensation
expense 8 56
Investments 1,772 0
Tax effect of adjustments 333 413
Cumulative effect of
change in accounting 0 (18,210)
policies
Effect of change in
accounting policies:
Maintenance and
depreciation 0 (10,206)
Tax 0 3,184
Shareholders' equity as 243,729 160,774
adjusted to accord with
US GAAP
Opening shareholders'
equity under US GAAP 196,822 80,880
Investments (41) 0
Net income in accordance
with US GAAP 46,948 32,624
Stock issued for cash 0 47,270
Closing shareholder's _______ _______
equity under US GAAP 243,729 160,774
Ryanair Holdings plc
Management Discussions and Analysis of Results
Summary
Quarter Ended December 31, 1999
Profit after tax has increased by 33% to IR£12.6m, compared to IR£9.4m
in the previous quarter December 31, 1998. Total Operating Revenues,
grew by 35% to IR£70.6m, whilst passenger volumes increased by 17% to
1.4m.
Total Operating Expenses increased by 36% to IR£56.9m, due to the
increased level of activity, and the increased costs, primarily staff
and airport costs, associated with the growth of the airline. Profit
Before Tax has increased by 29% to IR£15.7m. The Corporation Tax rate
for the period was 20% compared to 22% for the previous quarter, and
primarily reflects the impact of the decline in the headline rate of
corporation tax in Ireland.
Nine Months Ended December 31, 1999
Profit after tax has increased by 25% to IR£45.9m, compared to IR£36.7m
in the previous nine months ended December 31, 1998. Total Operating
Revenues, grew by 22% to IR£223.8m, whilst passenger volumes increased
by 13% to 4.2m.
Total Operating Expenses increased by 22% to IR£168.6m, due to the
increased level of activity, and the increased costs, primarily staff
and airport costs, associated with the growth of the airline. Profit
Before Tax has increased by 20% to IR£58.5m. The Corporation Tax rate
for the period was 22% compared to 25% for the previous nine months,
and reflects the impact of the decline in the headline rate of
corporation tax in Ireland.
Balance Sheet at December 31, 1999
Cash and Liquid Resources have increased from IR£125.0m at March 31,
1999 to IR£166.3m at December 31, 1999, reflecting the increased cash
flows from the profitable trading performance. During the nine months
the company incurred capital expenditure of IR£105.0m primarily
financed by an increase in the level of debt. Shareholder's Funds at
December 31, 1999 have increased to IR£243.6m, compared to IR£197.7m at
March 31, 1999.
Discussion and Analysis
Quarter Ended December 31, 1999
Profit after tax has increased by 33% to IR£12.6m, compared to IR£9.4m
in the previous quarter ended December 31, 1998.
Total Operating Revenues, grew by 35% to IR£70.6m, whilst passenger
volumes increased by 17% to 1.4m.
Scheduled Passenger Revenues increased by 37% to IR£63.1m due to a 17%
increase in passenger volumes, an increase in the average yield per
passenger reflecting the strength of sterling, and the longer average
sector length flown.
Ancillary Revenues increased by 15% to IR£7.4m reflecting the reduction
in average spend per passenger due to the cessation of duty free sales,
being offset by, increased revenues from other ancillary activities.
Total Operating Expenses increased by 36% to IR£56.9m, due to the
increased level of activity, and the increased costs, primarily staff
and airport costs, associated with the growth of the airline.
Staff Costs have increased by 30% to IR£9.8m. The increase in staff
costs reflects a 16% increase in average employment to 1,261. Pilots,
who earn higher than average salaries, accounted for 18% of the
increase in employment. Staff costs also rose due to the impact of a 3%
increase in pay during the quarter.
Depreciation increased by 29% to IR£8.9m, reflecting the increased
depreciation costs arising from the acquisition of five new Boeing 737-
800 next generation aircraft, and the amortisation of capitalised
maintenance costs.
Fuel Costs rose by 26% to IR£8.4m reflecting the impact of a 19%
increase in the number of sectors flown, an increase in the average
sector length, and an increase in the cost per gallon of fuel in local
currency due to the strengthening of the dollar.
Maintenance Costs increased by 50% to IR£3.9m, reflecting an increase
in the number of sectors flown, increased line maintenance costs
associated with the expansion of the Stansted base, and a non-recurring
engine overhaul cost incurred during the quarter.
Marketing and Distribution Costs have increased by 45% to IR£5.7m, due
to a combination of, an increase in passenger volumes, increased
distribution costs, and the increased marketing costs associated with
the launch of eight new routes.
Aircraft Rental Costs were £0.3m reflecting the cost incurred to rent
additional seat capacity during the quarter.
Route Charges increased by 29% to IR£5.2m primarily due to a 19%
increase in the number of sectors flown, and an increase in the average
sector length.
Airport and Handling Charges increased by 65% to IR£8.4m, 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 the new routes from the UK to Europe.
Other Expenses increased by 28% to IR£6.4m, which was higher than the
growth in passenger volumes and reflects the increased ancillary
product costs arising from the change in product mix post the cessation
of duty free.
Operating Profits have increased by 30% to IR£13.6m for the reasons
outlined above.
Interest Receivable amounted to IR£1.5m during the quarter, and
Interest Payable increased to IR£1.0m due to the increased level of
debt arising from the acquisition of the five new aircraft. Gains on
Disposals of Assets increased by £0.7m reflecting the gain on the
disposal of shares in an airline network provider.
Corporation Tax rate for the quarter was 20% compared to 22% in the
previous quarter and primarily reflects the impact of the decline in
the headline rate of corporation tax in Ireland.
The Company's Balance Sheet continues to highlight the impact of the
profitable trading performance during the period. Cash and liquid
resources increased from IR£125.0m at March 31, 1999 to IR£166.3m
reflecting the strong cashflows generated during the period. The
company incurred capital expenditure of IR£105.0m primarily financed by
an increase in the level of debt.
Shareholder's Funds at December 31, 1999 have increased to IR£243.6m
compared to IR£197.7m at March 31 1999.
Nine Months Ended December 31, 1999
Profit after tax has increased by 25% to IR£45.9m compared to IR£36.7m
in the nine months ended December 31, 1998.
Total Operating Revenues, grew by 22% to IR£223.8m, whilst passenger
volumes increased by 13% to 4.2m.
Scheduled Passenger Revenues increased by 24% to IR£199.3m due to a 13%
increase in passenger volumes, an increase in the average yield per
passenger reflecting the strength of sterling, and the longer sector
length flown.
Ancillary Revenues increased by 9% to IR£24.4m, which was lower than
the growth in passenger volumes, and reflects the reduction in average
spend per passenger post the cessation of duty free, being offset by,
increased revenues from other ancillary activities.
Total Operating Expenses increased by 22% to IR£168.6m, due to the
increased level of activity, and the increased costs, primarily staff
and airport costs, associated with the growth of the airline.
Staff Costs have increased by 23% to IR£28.4m. The increase in staff
costs reflects a 16% increase in average employment to 1,248. Pilots,
who earn higher than average salaries, accounted for 22% of the
increase in employment. Staff costs also rose due to the impact of a 3%
increase in pay.
Depreciation increased by 20% to IR£25.5m, reflecting the impact of the
acquisition of five new Boeing 737-800 next generation aircraft, and
the amortisation of capitalised maintenance costs.
Fuel Costs rose by 12% to IR25.0m and reflects the impact of, a 13%
increase in the number of sectors flown during the nine months, an
increase in the average sector length, offset by, a reduction in the
average cost per gallon of fuel reflecting the impact of the forward
hedging contracts entered into in 1998.
Maintenance Costs increased by 31% to IR£10.1m, primarily reflecting
the increase in the number of hours flown, and the increased line
maintenance costs associated with the expansion of our Stansted base.
Marketing and Distribution Costs have increased by 23% to IR£18.8m, due
to a combination of an increase in passenger volumes, and the increased
costs associated with the launch of eight new routes.
Aircraft Rental Costs decreased by IR£0.6m to IR£1.4m reflecting the
continued decline in the need to rent additional seat capacity.
Route Charges increased by 22% to IR£15.6m due to a 13% increase in the
number of sectors flown, and an increase in the average sector length.
Airport and Handling Charges increased by 42% to IR£25.4m, 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 the new routes from the UK to Europe.
Other Expenses increased by 16% to IR£18.4m, and reflects the increase
in the level of activity during the period.
Operating Profits have increased by 24% to IR55.2m for the reasons
outlined above.
Interest Receivable amounted to £4m during the period, and Interest
Payable increased to IR£2.1m due to the increased level of debt arising
from the acquisition of the five new aircraft. Gains on Disposals of
Assets increased by £0.7m reflecting the gain on the disposal of shares
in an airline network provider.
Corporation Tax for the half year was 22% compared to 25% in the
previous nine months and reflects the impact of the decline in the
headline rate of corporation tax in Ireland.
The Company's Balance Sheet continues to highlight the impact of the
profitable trading performance during the nine months. Cash and liquid
resources increased from IR£125.0m at March 31,1999 to IR£166.3m
reflecting the strong cashflows during the nine months. The company
incurred capital expenditure of IR£105.0m during the nine months which
was primarily financed by an increase in the level of debt.
Shareholder's Funds at December 31, 1999 have increased to IR£243.6m
compared to IR£197.7m at March 31, 1999.
Notes to the Financial Statements
1. Accounting Policies
The accounting policies followed in the preparation of these
interim consolidated financial statements have not changed from
those set out in the Annual Report for the year ended March 31,
1999.
2. Approval of the Financial Statements
The consolidated financial statements for the Nine Months and
Quarter ended 31 December 1999 were approved by the Audit
Committee on February 4th, 2000.
3. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the Nine
Months and Quarter ended December 31, 1999 are based on the results
reported under Irish and UK GAAP.
4. Year 2000 Compliance
The company has successfully completed its Year 2000 programme and
the company's information systems continue to operate normally.
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