O’Leary downplays Ryanair profits

Ryanair remains on course for record full-year profits, after delivering strong third- quarter growth, including net profits of nearly €15 million.

Chief executive Michael O’Leary downplayed the figures — saying they compared to a bad corresponding weather-hampered quarter in the preceding year, which had resulted in a third quarter net loss of €10.3m — but still said that the company should come close to recording record profits for the year to the end of March. Indeed, on the back of the latest figures, Ryanair has — for the second consecutive quarter — increased its full-year net profit guidance by 10%; saying the final figure should amount to €480m and not the previously anticipated €440m.

During the three months to the end of December, Ryanair’s passenger numbers dipped by 2% to 16.7 million. However, after-tax profits amounted to €14.9m and basic earnings per share came to 1.02c.

Those last two figures were up from a net loss of €10.3m and a loss per share of 0.69c for the same quarter last year. Quarterly revenues, meanwhile, were up by 13% year-on-year at €844m.

Ancillary revenues were up by 6%, year-on-year, to €177m. The airline is also likely to become debt free — if not by the end of March, then soon after. The company is attributing its current growth to further consolidation in the airline sector, and high fuel costs putting more pressure on the traditionally larger airlines. Despite Mr O’Leary’s muted celebrations over the results, analysts were upbeat — Davy Stockbrokers hailing them as “stellar” and “particularly strong” in the face of rising operational costs.

Ryanair’s share price was up by nearly 1% yesterday, to €4.19.

Most of Ryanair’s growth is emanating from mainland Europe and Mr O’Leary said that the future prospects for the airline in its home market of Ireland remain “bleak” until conditions change, in terms of Government policy.

To this end, however, he said he believed that pressure from the troika will probably bring about the end of the DAA airport monopoly in the next two to three years, and lead to a break-up of Cork, Shannon (and part of) Dublin Airport.

“Ireland needs competition between Dublin, Cork and Shannon airports, in order to reduce the DAA’s high airport charges and return our tourism industry to growth, which will create thousands of badly needed entry-level jobs in the Irish economy,” he said.

Mr O’Leary also said that he believes troika pressure will see a sale of Aer Lingus — in which Ryanair holds a 29% stake — “sooner rather than later“, with the airline either being sold to Ryanair or, more likely, broken up and sold abroad.