Ryanair increases its full-year profit forecasts after 10% rise
The airline yesterday reported after-tax profits of €596m for the six months to the end of September — 10% higher than the €544m generated in the same period last year.
Similarly, half-year revenues were up by 15% year-on-year to €3.1bn, with basic earnings per share growing by 13% to 41.34c.
Pre-tax profits for the first half rose year-on-year from €619.6m to €679.3m.
Ryanair now accounts for 12% of Europe’s combined short-haul traffic. Its first-half passenger numbers rose by 7% to 48m people and it is targeting full-year passenger growth of 4%-5% to more than 79m people.
However, in its first half, the airline saw ancillary revenues — generated from things like reserved seating costs, priority boarding and commercial tie-ins with companies like car rental specialist Hertz — outgrow passenger increases; rising by 12%.
For the 12 months to the end of March, Ryanair said it now expects profits to amount to between €490m and €520m.
The company had originally envisaged an annual profit range of €400m-€440m.
Despite this, management expects market conditions to remain “tough”, but said despite ongoing recession, austerity measures, high fuel costs and “excessive government taxes”, there are “substantial opportunities” for growth.
The airline is targeting 120m passengers per annum in the next decade.
It is also aiming to expand into a number of new geographical markets such as Israel, Georgia, Montenegro, Macedonia and Serbia.
While fares rose by 6% in the first half, Michael Cawley — Ryanair’s deputy chief executive/chief operating officer — said that fares will decline if passenger numbers continue to grow; although prices are set to remain “stable” in the short term. The airline’s unit costs rose by 8% year-on-year, due mainly to a 24% increase in fuel costs.
Ryanair’s share price jumped by over 6%, yesterday, closing at €4.83.
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