Hike of 4% in airline’s shares after €341m profit

SHARES in Ryanair jumped nearly 4.5% yesterday, after the airline reported a pre-tax profit of €341 million and announced a special dividend payment of €500m to shareholders.

The return to profitability formed part of a strong set of annual results for the 12 months to the end of March – which also included a 2% jump in revenue to €2.99 billion and a 204% surge in adjusted basic earnings per share to 21.59c.

While the company’s adjusted after-tax profits trebled from €105m to €319m, in the preceding year Ryanair actually made a pre-tax loss of €180.5m after the massive writedown in the value of its 29% stake in Aer Lingus was taken into consideration.

The airline said, yesterday, that despite a weaker year-on-year showing in the first quarter, the firm should grow profits by between 10% and 15% to between €350m and €375m in its current financial year.

The €500m special dividend payment to shareholders – which requires approval by shareholders at the annual general meeting in September – is the result of Ryanair cancelling fleet expansion plans over its recently unresolved cost negotiations with aircraft manufacturer Boeing. The payment brings to €846m the amount of money the company has returned to shareholders – via share buy-backs and dividend payments – over the past three years.

The airline’s share price rose by 4.38%, yesterday, or 15c to €3.53.

Ryanair is looking at boosting its number of European bases to more than 50 in the next 12 months.

The airline, which recently named Barcelona’s El Prat airport as its 42nd hub, is in talks with 10 European airports over opening new hubs and 50 airports regarding new route opportunities.

Chief operating officer and deputy chief executive, Michael Cawley said that management hopes to add four or five new bases by the end of 2010.

Mr Cawley said that further expansion into Eastern Europe, Morocco and Turkey – where it has no presence – are long-term goals.

Ryanair is aiming to grow customer numbers from 66.5 million people (itself a 14% annual rise), as of the end of its most recent financial year at the end of March to more than 85 million by the same date in 2013. For its current financial year, the target is 73.5 million, although this is likely to be reduced to 72 million on account of last month’s volcanic ash cloud disruption, which is also set to rack up a one-off €50m exceptional cost for the airline.

Mr Cawley also warned that although the last year saw average fares drop by 13%, a €300m rise in fuel costs could contribute to a fare rise of between 5% and 10% in the current year, with costs per passenger rising by about 4%.