Ryanair blames fall in sterling for cut in its full-year net profit guidance

Ryanair has reduced its full-year net profit guidance by 5% from a previous range of €1.375bn - €1.425bn to a new range of €1.30bn - €1.35bn.

The budget airline said the main reason of the slightly lower growth is the 18% fall of sterling after Brexit, which they say will reduce average fares in the second half of the year by between 13% to 15% as opposed to the previously forecast 10% to 12%.

Ryanair confirmed that its H1 fares were 10% lower compared to previously forecast fall of 9%.

However, they said that the lower fares will be partly offset by a better than expected cost performance.

Ryanair now expects full year ex-fuel unit costs to decline by 3% compared to previously guided 1%.

The airline also expects full year load factor to be 1% better than guided at 94%, and now expects that full year traffic will increase to 119m, which is 12% growth on last year’s 106m customers.

The low-cost airline's CEO Michael O’Leary said: "The recent sharp decline in Sterling post Brexit (which accounts for approx. 26% of Ryanair’s FY17 revenues) will weaken H2 yields by slightly more than we had originally expected.

"While higher load factors, stronger traffic growth and better cost control will help to ameliorate these weaker revenues, it is prudent now to adjust full year guidance which will rise by approximately 7% (over FY 2016) rather than our original guidance of 12%.

"This decline is primarily due to the impact of weaker Sterling on our H2 fares.

"We would caution that this revised guidance remains heavily dependent upon no further weakness in H2 fares (-13% to -15%) or Sterling from its current levels (€1 = £0.9050)."