Ryanair Lifts FY13 Profit View As Q3 Profit Climbs - Update - InvestingChannel

Ryanair Lifts FY13 Profit View As Q3 Profit Climbs – Update

Ireland-based ultra-low cost carrier Ryanair Holdings Plc (RYAAY: Quote,RYA.L) Monday reported a 24.5 percent increase in third-quarter pre-tax profit backed by strong traffic and pre-Christmas bookings at higher yields that offset higher fuel costs. Looking ahead, the company expects lower fourth-quarter traffic on weaker demand, but lifted full-year profit view.

For the third quarter, pre-tax profit increased to 19.3 million euros from 15.5 million euros last year. Profit attributable to equity holders of parent grew 21 percent to 18.1 million euros, and earnings per share climbed 23 percent to 1.25 cents.

According to the company, lower than expected operating costs delivered slightly better profits than forecast.

Third-quarter revenues grew 15 percent to 968.8 million euros primarily due to an 8 percent increase in average fares, and a 3 percent rise in traffic to 17.3 million passengers.

Scheduled revenues rose 12.2 percent due to a 3 percent rise in passenger numbers and an 8 percent increase in average fares. Load factor remained flat at 81 percent. Ancillary revenues grew 24.4 percent, faster than the 3 percent increase in passenger volume, the company noted.

Operating margin increased 1 point to 4 percent, and operating profits increased 18 percent.

Fuel increased 24 percent due to a higher price per gallon paid and increased activity in the period. Unit costs excluding fuel rose 4 percent, while including fuel unit costs rose 11 percent due to excessive increases in Italian ATC costs, Spanish airport charges, and the strength of Sterling to the Euro.

Looking ahead, the company expects fourth-quarter traffic to drop by approximately 400 thousand passengers from last year, as it grounded up to 80 aircraft, limiting the impact of high oil prices, high airport fees at Stansted and Dublin, and seasonally weaker fourth-quarter demand.

However, for the full year, the company now forecast profits close to 540 million euros, higher than previous guidance range of 490 million euros to 520 million euros. This represents a 7 percent increase in profits over last year, despite a 19 percent increase in oil costs.

According to the company, the revision reflects its improved third-quarter result, capacity cuts and limited visibility over Easter bookings and yields, although it has seen some yield softness in January.

Separately, Ryanair issued an update in relation to its takeover offer to Aer Lingus Group Plc (AERL.L), noting that it has submitted a radical and unprecedented remedies package to the EU in support of its offer.

Ryanair’s CEO Michael O’Leary said, “The remedies involve two upfront buyers each basing aircraft in Ireland to takeover and operate a substantial part of Aer Lingus’ existing route network and short-haul business. This will be the first EU airline merger which will deliver structural divestitures and multiple upfront buyers. We look forward to completing our offer for Aer Lingus subject to receiving approval from the EU competition authorities in early March.”

In London, Ryanair shares are currently declining 0.11 euros or 1.91 percent, and are trading at 5.40 euros.

On the Nasdaq, the shares closed Friday’s trading at $39.38, up $0.85 or 2.21 percent.

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by RTT Staff Writer

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