SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of November, 2006
RYANAIR HOLDINGS PLC
(Translation of registrant's name into English)
c/o Ryanair Ltd Corporate Head Office
Dublin Airport
County Dublin Ireland
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F..X.. Form 40-F.....
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934.
Yes ..... No ..X..
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ________
RYANAIR ANNOUNCES RECORD HALF YEAR PROFITS
NET PROFIT RISES BY 39% TO EUR329M - TRAFFIC GROWS 23% TO 22m RAISES FULL YEAR
GUIDANCE: UP 16% TO EUR350M.
Ryanair, Europe's largest low fares airline, today (Monday, 6th November 2006)
announced record half year profits of EUR329m. Traffic grew by 23% to 22.1m
passengers, yields increased by 9% as total revenues rose by 33% to EUR1.256bn.
Unit costs increased by 7.5% as fuel costs rose by 42% to EUR337m. Despite these
significantly higher fuel costs, Ryanair's after tax margin for the half year
rose by 1 point to 26% as half year net profits increased by 39% to EUR329m.
Summary Table of Results (IFRS) - in Euro
Half Year Ended Sept 30, 2005 Sept 30,2006 % Increase
Passengers 18.0m 22.1m 23%
Revenue EUR946.2m EUR1,256.4m 33%
Profit after Tax (note 1) EUR237m EUR329m 39%
Basic EPS (Euro Cents) (note1) 31.00 42.67 38%
Note 1: Adjusted profit after tax and EPS during the half year ended 30
September 2005 excludes a receipt, net of tax, of EUR5.2m arising from the
settlement of an insurance claim for the scribing of 6 Boeing 737-200 aircraft.
Announcing these results Ryanair's CEO, Michael O'Leary, said:
"Ryanair has again, delivered record half year profits despite intense
competition and very high fuel prices. The Ryanair lowest fare model has
repeatedly proven that it can generate increased profitability and significant
passenger growth during difficult trading conditions while many of our
competitors are struggling to deliver profits or are losing money.
"Summer yields rose by 9% despite a 22% increase in seat capacity. This benign
yield environment continues to be driven by the multiple fuel surcharges imposed
by European flag carriers, which has widened the gap between their high fares
and Ryanair's lowest fares. Our unwavering determination to avoid fuel
surcharges has enabled us to deliver rapid traffic growth and generate higher
profits. Load factors were up 1 point as we launched 42 new routes and 3 new
bases.
"Ancillary revenues grew by 27%, again faster than the growth in passenger
volumes. Need a Hotel, our online hotel provider, has decided to terminate our
agreement with effect from December 31st, 2006. Whilst the terms of our
agreement are confidential, we anticipate that returns for the remainder of the
fiscal year will remain unaffected. We are confident that we can replace Need a
Hotel without affecting the returns this business generates. We also recently
launched our Bingo/Gaming website and our 15 million unique visitors each month
will now be offered the lowest fares and a flutter on our Bingo/Gaming website.
As we roll out our onboard mobile phone system next summer, passengers will also
be able to have a flutter whilst travelling on our 437 routes across Europe.
"We introduced a new service enhancement in November that will allow all
passengers to enjoy on-line check-in and/or priority boarding for just GBP2/EUR3
per flight. Passengers travelling with hand luggage only, will continue to by
pass check-in queues and go directly to their boarding gate. This new service
will extend the priority boarding facility to passengers travelling with
checked-in luggage who will now be entitled to board the aircraft first and
choose their seats.
"Unit costs increased by 7.5% primarily due to higher fuel, staff and airport
and handling costs. Fuel costs rose by 42% to EUR337m despite being almost fully
hedged during the quarter reflecting higher world fuel prices. For the remainder
of this fiscal year, we are 90% hedged at rates equivalent to $73 per barrel. We
have used the recent weakness in forward oil prices to hedge 50% of our
requirements for the quarter from October to December 2007 at a cost which is
10% lower than comparable Q3 this year. We continue to monitor forward prices
with a view to hedging our requirements for fiscal 2008 when opportunities
arise.
"Our new bases at Liverpool, East Midlands and Shannon performed well over the
summer, however, fares at Shannon continue to be materially lower than expected.
We announced 3 new bases at Bremen, Marseille and Madrid and advance bookings at
all 3 are strong. We announced a further 4 aircraft and 20 new routes at our
Dublin base commencing in early 2007 and these are already booking strongly. In
August we achieved another milestone and became the first European low fares
airline to carry 4m passengers in one month.
"In October we exercised options for 32 Boeing 737-800 next generation aircraft
to be delivered between September 2008 and June 2009 as part of our plan to
double in size to over 80m passengers by 2012. We also ordered 10 more aircraft
simulators (5 firm, 5 options), which will be delivered between 2008 and 2013
and will enable us to further reduce pilot training costs whilst improving
safety and training.
"We continue to oppose the BAA airport monopoly plans to build a GBP4bn gold
plated Taj Mahal at Stansted which we believe could be built for GBP1bn. The BAA
monopoly continues to build facilities, which do not meet users needs. Until
there is competition between the three London airports, airport charges will
continue to rise and passengers will have to suffer these over specified,
inefficient facilities. Ryanair continues to campaign for the break up of the
BAA airport monopoly. We are deeply concerned by the continuing under staffing
of security at Stansted airport which has led to repeated passenger and flight
delays. The management of Stansted security is inept, and the BAA has again
proven that it is incapable of providing adequate or appropriate security
services at Stansted. This shambles again highlights that the BAA is an
inefficient, incompetent airport monopoly which should be broken up.
"The tragedy at Dublin airport continues where the DAA monopoly recently
obtained planning approval for a second terminal at a cost of EUR750m which is
4.5 times more than the EUR170m cost it announced just 11 months earlier in
Sept. 2005. Only a government owned monopoly would seek a cost increase of over
4 fold - with no increase in passenger capacity - prior to applying for planning
permission! The DAA has recently proposed that an outrageous 60% increase in
charges at Dublin Airport to recoup the inflated cost of this facility which
Ryanair passengers will never use. Ryanair will continue to oppose this waste
and has appealed the planning decision.
"On the 5th October, we announced a Cash Offer for Aer Lingus of EUR2.80 per
share which valued Aer Lingus at approximately EUR1.48bn. We have acquired a
19.2% stake in Aer Lingus at a cost of EUR254m. We believe there are significant
opportunities, by combining the purchasing power of Ryanair and Aer Lingus, to
substantially reduce its operating costs, increase efficiencies, and pass these
savings on in the form of lower fares to Aer Lingus' consumers. We plan to
retain the Aer Lingus brand and the Heathrow slots, and up-grade their dated
longhaul product and are committed to reducing their shorthaul fares by 2.5% per
year for a minimum of 4 years. We believe the combination of Aer Lingus and
Ryanair into one strong Irish airline group will be rewarding for consumers and
will enable us both to vigorously compete with the mega carriers in Europe. The
EU Competition Authority is currently reviewing the proposed acquisition and we
anticipate that the final outcome of their regulatory review will not be known
until late December, 2006. If our offer is not accepted by a majority of Aer
Lingus shareholders, we will continue to be a significant minority shareholder,
and will exercise whatever influence we can to encourage Aer Lingus to reduce
costs and offer lower fares which is, we believe, its best strategy for the
future.
"We remain cautious in our outlook for H2 as we roll out substantial capacity
expansion and suffer significantly higher oil prices than the comparable period
last year. However, we expect to deliver significant traffic growth as we launch
130 new routes and 3 new bases, (Marseilles, Bremen and Madrid), albeit at
slightly lower load factors (down 2% monthly on last year) during H2 which
should result in better yield stability. The benign yield environment continues
thanks to multiple fuel surcharges of our competitors. Based on a reasonable
level of visibility, it now appears likely that yields in Q3 will be +2% to +3%
compared to our original forecast of a -5% decline. With little visibility in
Q4, we believe that yields may be slightly lower but not as much as the -5%
decline previously guided. Accordingly, we now expect yields to be flat over the
winter period although our net profit for H2 will still be lower than last year.
As a result, we now expect that the increase in Net Profit after tax for the
fiscal year will be approx. +16% to EUR350m, higher than our previous guidance
of approximately +11% to EUR335m.
"Whilst intense competition in the market continues, Ryanair's unique
combination of the lowest fare in every market, lowest cost base and industry
leading customer service will enable us to continue to lead the low fares
revolution for the benefit of our passengers, our staff and our shareholders".
Ryanair today announced that the Board of Directors intend to seek shareholder
approval for a 2 for 1 stock split at the Extraordinary General meeting to be
held in December on the proposed acquisition of Aer Lingus. The purpose of the
stock split is to improve the marketability and liquidity of the stock. The
existing ratio of 5 ordinary shares to 1 ADR will be retained.
ENDS. Monday, 6th November 2006
For further information Howard Millar Pauline McAlester
please contact: Ryanair Holdings Plc Murray Consultants
www.ryanair.com Tel: 353-1-8121212 Tel: 353-1-4980300
The directors of Ryanair accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Ryanair (who have taken all reasonable care to ensure that such is the case),
the information contained in this announcement for which they accept
responsibility is in accordance with the facts and does not omit anything likely
to affect the import of such information.
Terms defined in the Offer Document issued by Ryanair on 23 October, 2006 have
the same meaning in this announcement.
Certain of the information included in this release is forward looking and is
subject to important risks and uncertainties that could cause actual results to
differ materially. It is not reasonably possible to itemise all of the many
factors and specific events that could affect the outlook and results of an
airline operating in the European economy. Among the factors that are subject to
change and could significantly impact Ryanair's expected results are the airline
pricing environment, fuel costs, competition from new and existing carriers,
market prices for the replacement aircraft, costs associated with environmental,
safety and security measures, actions of the Irish, U.K., European Union ("EU")
and other governments and their respective regulatory agencies, fluctuations in
currency exchange rates and interest rates, airport access and charges, labour
relations, the economic environment of the airline industry, the general
economic environment in Ireland, the UK and Continental Europe, the general
willingness of passengers to travel and other economics, social and political
factors.
Ryanair is Europe's largest low fares airline with 18 bases and 437 low fare
routes across 24 countries. By the end of March 2007 Ryanair will operate an
entire fleet of 134 new Boeing 737-800 aircraft with firm orders for a further
117 new aircraft (net of planned disposals), which will be delivered over the
next 5 years. Ryanair currently employs a team of 3,900 people and expects to
carry approximately 42 million scheduled passengers in the current year.
Ryanair Holdings plc and Subsidiaries Page 1
Consolidated Income Statement in accordance Quarter Quarter Half year Half year
with IFRS (unaudited) ended ended ended ended
Sep 30, Sep 30, Sep 30, Sep 30,
2006 2005 2006 2005
EUR'000 EUR'000 EUR'000 EUR'000
------- ------- ------- -------
Operating revenues
Scheduled revenues 602,089 470,495 1,092,102 816,781
Ancillary revenues 87,700 71,027 164,321 129,379
------- ------- ------- -------
Total operating revenues
-continuing operations 689,789 541,522 1,256,423 946,160
------- ------- ------- -------
Operating expenses
Staff costs 57,107 41,494 113,844 83,646
Depreciation 36,035 29,672 71,622 61,337
Operating expenses
Fuel & oil 169,580 126,967 337,042 236,873
Maintenance, materials and repairs 10,613 7,625 21,313 16,775
Marketing & distribution costs 5,885 3,387 11,608 8,729
Aircraft rentals 12,996 10,679 25,394 20,737
Route charges 50,305 42,563 98,384 83,933
Airport & handling charges 71,222 55,465 139,097 110,039
Other 26,942 21,440 52,312 41,977
------- ------- ------- -------
Total operating expenses 440,685 339,292 870,616 664,046
------- ------- ------- -------
Operating profit before exceptional items 249,104 202,230 385,807 282,114
Aircraft insurance claim - - - 5,939
------- ------- ------- -------
Operating profit after exceptional items -
continuing operations 249,104 202,230 385,807 288,053
------- ------- ------- -------
Other (expenses)/income
Foreign exchange (losses)/gains (908) (481) (1,229) 463
(Loss) on disposal of property, plant & equipment - (16) - (16)
Finance income 16,069 9,211 28,923 17,821
Finance expense (20,698) (18,364) (41,311) (36,799)
------- ------- ------- -------
Total other (expenses)/income (5,537) (9,650) (13,617) (18,531)
------- ------- ------- -------
Profit before taxation 243,567 192,580 372,190 269,522
Tax on profit on ordinary activities (30,122) (20,046) (43,063) (27,347)
------- ------- ------- -------
Profit for the period 213,445 172,534 329,127 242,175
======= ======= ======= =======
Earnings per ordinary share
-Basic(Euro cent) 27.66 22.51 42.67 31.68
-Diluted(Euro cent) 27.45 22.35 42.39 31.47
Adjusted earnings per ordinary share*
-Basic(Euro cent) 27.66 22.51 42.67 31.00
-Diluted(Euro cent) 27.45 22.35 42.39 30.79
Number of ordinary shares(in 000's)
-Basic 771,722 766,453 771,413 764,509
-Diluted 777,491 771,875 776,456 769,603
* Calculated on profit for the year before exceptional items (net of tax).
Ryanair Holdings plc and Subsidiaries Page 2
Consolidated Balance Sheet in accordance with Sep 30, Mar 31,
IFRS (unaudited) 2006 2006
EUR'000 EUR'000
------- -------
Non-current assets
Property, plant & equipment 2,550,162 2,532,988
Intangible assets 46,841 46,841
Available for sale financial asset 185,363 -
Derivative financial instruments 3,888 763
------- -------
Total non-current assets 2,786,254 2,580,592
------- -------
Current assets
Inventories 3,627 3,422
Other assets 48,842 29,453
Trade receivables 24,207 29,909
Derivative financial instruments 502 18,872
------- -------
Restricted cash 204,040 204,040
Financial assets: cash > 3months 824,314 328,927
Cash and cash equivalents 1,064,692 1,439,004
------- -------
------- -------
Total current assets 2,170,224 2,053,627
------- -------
Total assets 4,956,478 4,634,219
=========== =========
Current liabilities
Trade payables 87,903 79,283
Accrued expenses and other liabilities 519,835 570,614
Current maturities of long term debt 158,049 153,311
Derivative financial instruments 69,854 27,417
Current tax 46,331 15,247
------- -------
Total current liabilities 881,972 845,872
------- -------
Non-current liabilities
Provisions 22,723 16,722
Derivative financial instruments 74,864 81,897
Deferred income tax liability 134,881 127,260
Other creditors 68,396 46,066
Long term debt 1,476,874 1,524,417
------- -------
Total non-current liabilities 1,777,738 1,796,362
------- -------
Shareholders' equity
Issued share capital 9,807 9,790
Share premium account 602,664 596,231
Retained earnings 1,796,750 1,467,623
Other reserves (112,453) (81,659)
------- -------
Shareholders' equity 2,296,768 1,991,985
------- -------
Total liabilities and shareholders' equity 4,956,478 4,634,219
=========== =========
Ryanair Holdings plc and Subsidiaries Page 3
Consolidated Cashflow Statement in accordance with IFRS (unaudited)
Sep 30, Sep 30,
2006 2005
EUR'000 EUR'000
------- -------
Operating activities
----------------------
Profit before taxation 372,190 269,522
Adjustments to reconcile profits before tax
to net cash provided by operating activities
Depreciation 71,622 61,337
(Increase) in inventories (205) (3,733)
Decrease/(increase) in trade receivables 5,702 (5,286)
(Increase)/decrease in other current
assets (16,320) 1,342
Increase/(decrease) in trade payables 8,620 (29,467)
(Decrease)/increase in accrued expenses (55,320) 6,176
Increase in other creditors 35,489 19,294
Increase in maintenance provisions 6,001 5,145
Interest receivable (3,069) (3,654)
Interest payable 4,212 (52)
Retirement costs 329 289
Share based payment 2,012 586
Income tax 328 (1,727)
------- -------
Net cash provided by operating 431,591 319,772
activities ------- -------
Investing activities
----------------------
Capital expenditure (purchase of property,
plant and equipment) (88,797) (86,814)
Purchase of shares classified as available
for sale (185,363) -
(Investment)/reduction in financial assets:
cash > 3months (495,387) 122,655
------- -------
Net cash used in investing activities (769,547) 35,841
------- -------
Financing activities
----------------------
Net proceeds from shares issued 6,450 10,943
Proceeds from long term borrowings 32,758 16,496
Repayments of long term borrowings (75,564) (59,755)
------- -------
Net cash used in financing activities (36,356) (32,316)
------- -------
(Decrease)/increase in cash and cash
equivalents (374,312) 323,297
Cash and cash equivalents at beginning
of period 1,437,847 871,354
Effects of exchange rates on foreign
currency balances 1,157 904
------- -------
Cash and cash equivalents at end of 1,064,692 1,195,555
period ======= =======
Ryanair Holdings plc and Subsidiaries Page 4
Consolidated Statement of Recognised Income and Expense Sep 30, Sep 30,
in accordance with IFRS (unaudited) 2006 2005
EUR'000 EUR'000
------- -------
Cash flow hedge reserve
New movements into cash flow hedge reserve 9,375 58,278
Movements from cash flow hedge reserve (42,181) -
------- -------
Net movements into cash flow hedge reserve (32,806) 58,278
------- -------
------- -------
Profit for the period 329,127 242,175
------- -------
------- -------
Total recognised income and expense 296,321 300,453
======= =======
Reconciliation of adjusted earnings per share (unaudited)
Sep 30, Sep 30,
2006 2005
EUR'000 EUR'000
------- -------
Profit for the period under IFRS 329,127 242,175
Adjustments
-------------
Aircraft insurance claim - (5,939)
Taxation adjustment for above - 742
------- -------
Adjusted profit under IFRS 329,127 236,978
======= =======
Number of ordinary shares(in 000's)
-Basic 771,413 764,509
-Diluted 776,456 769,603
Adjusted earnings per ordinary share
-Basic(EUR cent) 42.67 31.00
-Diluted(EUR cent) 42.39 30.79
Consolidated changes in shareholders' equity
Share
Ordinary premium Retained Other
shares account earnings reserves Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------- ------- ------- ------- -------
Balance at
April 1, 2006 9,790 596,231 1,467,623 (81,659) 1,991,985
Issue of ordinary equity shares 17 6,433 - - 6,450
---------------------- ------- ------- ------- ------- -------
New movements into cash flow hedge reserve - - - 9,375 9,375
Movements from cash flow hedge reserve - - - (42,181) (42,181)
---------------------- ------- ------- ------- ------- -------
Movement in reserves - - - (32,806) (32,806)
---------------------- ------- ------- ------- ------- -------
Share -based payments - - - 2,012 2,012
Profit for the period - - 329,127 - 329,127
------- ------- ------- ------- -------
Balance at September 30, 2006 9,807 602,664 1,796,750 (112,453) 2,296,768
======== ======= ======= ======= =======
Ryanair Holdings plc and Subsidiaries Page 5
Consolidated Income Statement in accordance Quarter Quarter Half year Half year
with US GAAP (unaudited) ended ended ended ended
Sep 30, Sep 30, Sep 30, Sep 30,
2006 2005 2006 2005
EUR'000 EUR'000 EUR'000 EUR'000
Operating revenues
Scheduled revenues 602,089 470,495 1,092,102 816,781
Ancillary revenues 87,700 71,027 164,321 129,379
------- ------- ------- -------
Total operating revenues
-continuing operations 689,789 541,522 1,256,423 946,160
------- ------- ------- -----
Operating expenses
Staff costs 57,214 41,301 114,059 83,077
Depreciation 36,450 29,985 72,419 61,942
Operating expenses
Fuel & oil 169,580 126,967 337,042 236,873
Maintenance, materials & repairs 10,613 7,625 21,313 16,775
Marketing & distribution costs 5,885 3,387 11,608 8,729
Aircraft rentals 12,996 10,679 25,394 20,737
Route charges 50,305 42,563 98,384 83,933
Airport & handling charges 71,222 55,465 139,097 110,039
Other 26,942 21,418 52,312 41,933
------- ------- ------- -------
Total operating expenses 441,207 339,390 871,628 664,038
------- ------- ------- -------
Operating profit before exceptional items 248,582 202,132 384,795 282,122
Aircraft insurance claim - - - 5,939
------- ------- ------- -------
Operating profit after exceptional items -
continuing operations 248,582 202,132 384,795 288,061
------- ------- ------- -------
Other (expenses)/income
Foreign exchange (losses)/gain (908) (481) (1,229) 463
(Loss) on disposal of property, plant & equipment - (16) - (16)
Finance income 16,069 9,211 28,923 17,821
Finance expense (17,659) (16,450) (36,073) (33,352)
------- ------- ------- -------
Total other (expenses)/income (2,498) (7,736) (8,379) (15,084)
------- ------- ------- -------
Income before taxation 246,084 194,396 376,416 272,977
Taxation (30,018) (20,309) (43,591) (27,849)
------- ------- ------- -------
Net income 216,066 174,087 332,825 245,128
======= ======= ======= =======
Net income per ADS
-Basic(Euro cent) 139.99 113.57 215.72 160.32
-Diluted(Euro cent) 138.95 112.77 214.32 159.26
Adjusted net income per ADS *
-Basic(Euro cent) 139.99 113.57 215.72 156.92
-Diluted(Euro cent) 138.95 112.77 214.32 155.88
Weighted Average number of shares
-Basic 771,722 766,453 771,413 764,509
-Diluted 777,491 771,875 776,456 769,603
* Calculated on net income before non-recurring items (net of tax).
(5 ordinary shares equal 1 ADS)
Ryanair Holdings plc and Subsidiaries Page 6
Summary of significant differences between IFRS and US generally
accepted accounting principles (unaudited)
(A) Net income under US GAAP
Quarter ended Half year ended
Sep 30, Sep 30, Sep 30, Sep 30,
2006 2005 2006 2005
EUR'000 EUR'000 EUR'000 EUR'000
Net income in
accordance with
IFRS 213,445 172,534 329,127 242,175
Adjustments
Pensions (107) (100) (215) (17)
Share based
payments - 293 - 586
Capitalised interest (net
of amortisation)
regarding aircraft
acquisition
programme 2,624 1,601 4,441 2,842
Darley Investments
Limited - 22 - 44
Taxation- effect of
above adjustments 104 (263) (528) (502)
-------- -------- ------- -------
Net income in
accordance with US
GAAP 216,066 174,087 332,825 245,128
======== ======== ======= =======
(B) Consolidated cashflow statement in accordance
with US GAAP
Sep 30, Sep 30,
2006 2005
EUR'000 EUR'000
Cash inflow from operating
activities 436,032 322,614
Cash (outflow)/inflow from investing
activities (773,988) 32,999
Cash (outflow) from financing
activities (36,356) (32,316)
------- -------
(Decrease)/increase in cash and cash
equivalents (374,312) 323,297
Cash and cash equivalents at
beginning of period 1,439,004 872,258
------- -------
Cash and cash equivalents at end
of period 1,064,692 1,195,555
======= =======
Cash and cash equivalents under
US GAAP 1,064,692 1,195,555
Restricted cash 204,040 204,040
Deposits with a maturity of between
three and six
months 824,314 406,752
------- -------
Cash and liquid resources in accordance with
IFRS 2,093,046 1,806,347
======= =======
Ryanair Holdings plc and Subsidiaries Page 7
Summary of significant differences between IFRS and US generally
accepted accounting principles
(unaudited)
(C) Shareholders' funds - equity
Sep 30, Sep 30,
2006 2005
EUR'000 EUR'000
------- -------
Shareholders' equity as reported in the
consolidated balance
sheets in accordance with IFRS 2,296,768 1,918,409
Adjustments:
Pension 9,026 11,688
Share based payments 586
Capitalised interest (net of amortisation)
regarding aircraft acquisition programme 33,889 25,789
Darley Investments Limited (19)
Minimum pension liability(net of tax) (4,295) (6,496)
Tax effect of adjustments( excluding
pension & derivative adjustments) (6,459) (5,498)
------- -------
Shareholders' equity as adjusted to accord
with US GAAP 2,328,929 1,944,459
======= =======
Opening shareholders' equity
under US GAAP 2,020,448 1,630,113
Comprehensive income
Unrealised (losses)/gains on derivative
financial instruments(net of tax) (32,806) 58,275
Net income in accordance with US
GAAP 332,825 245,128
------- -------
Total comprehensive income 300,019 303,403
Share based payments 2,012 -
Stock issued for cash 6,450 10,943
------- -------
Closing shareholders' equity in accordance
with US GAAP 2,328,929 1,944,459
======= =======
Ryanair Holdings plc
Management Discussion and Analysis of Results
Introduction
For the purposes of the MD&A all figures and comments are by reference to the
adjusted income statement excluding exceptional items referred to below.
Exceptional items for the half year ended September 30, 2005 consist of a
receipt of EUR5.2m (net of tax) arising from the settlement of an insurance
claim for the scribing of 6 Boeing 737-200 aircraft.
Profit after tax increased by 36% to EUR329.1m during the six months ended
September 30, 2006 compared to last year. The adjusted profit for the half year,
increased by 39% to EUR329.1m.
Summary Half Year Ended September 30, 2006
Profit after tax increased by 36% to EUR329.1m, compared to EUR242.2m in the
previous half year ended September 30, 2005. These results were achieved by
strong growth in passenger volumes and continued tight cost control, excluding
fuel and staff costs, which were both significantly higher than in previous
periods. Total operating revenues increased by 33% to EUR1,256.4m, which is
greater than the 23% growth in passenger volumes, as average fares rose by 9%
and ancillary revenues grew by 27% to EUR164.3m. Total revenue per passenger as
a result increased by 8% whilst Passenger Load Factor increased by 1 point to
87% during the period.
Total operating expenses increased by 31% to EUR870.6m, due to the increased
level of activity, and the increased costs, associated with the growth of the
airline. Fuel, which represents 39% of total operating costs compared to 36%
last year, increased by 42% to EUR337.0m due to substantial increases in the US
dollar cost per gallon, partially offset by a positive movement in the US dollar
exchange rate and a 2% reduction in fuel consumption due to the installation of
winglets on a portion of our Boeing 737-800 fleet. The remaining retro-fit
winglets will be installed across the fleet by year end. Unit costs excluding
fuel and staff costs declined by 1%. Staff costs rose by 36% reflecting an
increase in our crewing ratios primarily as a result of increases in our sector
length. Despite the significantly higher fuel and staff costs incurred,
operating margins increased by 1 point to 31%, whilst operating profit before
exceptional items increased by 37% to EUR385.8m.
Net Margins increased by 1 point to 26% for the reasons outlined above.
Adjusted basic earnings per share have risen by 38% to EUR42.67 cent for the
period.
Balance Sheet
The strong growth in profitability continues to positively impact the balance
sheet with Total Cash increasing by EUR121.1m to EUR2,093.1m despite investing
EUR185.4m in a 15% stake in Aer Lingus and funding an additional EUR88.8m in
capital expenditure from internal resources. The company debt financed one
Boeing 737-800 aircraft and funded additional aircraft deposits during the
period. Total debt declined during the period as repayments exceeded debt
drawdown by EUR42.8m. Shareholders' Funds at September 30, 2006 have increased
by EUR304.8m to EUR2,296.8m, compared to March 31, 2006 reflecting the EUR329.1m
increase in profitability during the period and the exercise of share options
which increased shareholder funds by EUR6.5m, offset by a reduction of EUR30.8m
resulting from the required IFRS accounting treatment for derivative financial
instruments, pensions and stock options.
Detailed Discussion and Analysis Half Year Ended September 30, 2006
Profit after tax, increased by 36% to EUR329.1m due to a 9% increase in average
fares, strong growth in ancillary revenues, and tight cost control which was
offset by fuel costs increasing by 42% to EUR337.0m primarily reflecting the
higher US dollar cost per gallon and a one off step up in staff costs which rose
by 36% to EUR113.8m. Operating margins, as a result, increased by 1 point to
31%, which in turn resulted in operating profit before exceptional items
increasing by 37% to EUR385.8m compared to half year ended September 30, 2005.
Total operating revenues increased by 33% to EUR1,256.4m due to the combination
of a 23% increase in passengers carried, an improvement in average fares and the
growth of ancillary revenues.
Scheduled passenger revenues increased by 34% to EUR1,092.1m due to a 9%
improvement in average fares reflecting the benign yield environment supported
by competitor fuel surcharges and the positive impact of Easter in fares. Easter
is not included in the prior year comparative as it occurred earlier. Passenger
volumes increased by 23% to 22.1m reflecting increased passenger numbers on
existing routes, the successful launch of our new routes and expansion of our
bases. Load factor increased by 1 point to 87% during the period.
Ancillary revenues continue to perform strongly with revenues growing by 27% to
EUR164.3m in the period. This performance reflects the strong growth in on board
sales, non-flight scheduled revenues, and other ancillary products. Ancillary
revenues continue to grow at a faster rate than passenger volumes.
Total operating expenses rose by 31% to EUR870.6m due to the increased level of
activity, and the increased costs associated with the growth of the airline
particularly higher fuel and staff costs. Total operating costs were also
adversely impacted by a 5% increase in the average sector length, whilst higher
US dollar fuel prices were partly offset by the strength of the euro exchange
rate against the US dollar.
Staff costs have increased by 36% to EUR113.8m. This primarily reflects a 31%
increase in average employee numbers to 3,768 and the impact of pay increases
granted during the period. Employee numbers rose due to an increase in our
aircraft crewing ratios as a result of continued increases in sector length.
Pilots, who earn higher than the average salary, accounted for 42% of the
increase in employment during the period.
Depreciation increased by 17% to EUR71.6m. There are an additional thirteen
'owned' Boeing 737-800 aircraft in the fleet this year compared to last year.
The resultant higher depreciation charge was offset by a combination of lower
amortisation due to the retirement of Boeing 737-200 aircraft and the positive
impact of a new engine maintenance deal on the cost of amortisation of Boeing
737-800 aircraft. The strengthening of the euro to US dollar also had a positive
impact on the depreciation and amortisation charge.
Fuel costs rose by 42% to EUR337.0m due to a 21% increase in the number of hours
flown and a significant increase in the average US dollar cost per gallon of
fuel partially offset by the positive impact of the strengthening of the euro to
the US dollar and a 2% reduction in fuel consumption due to the installation of
winglets on part of our Boeing 737-800 fleet.
Maintenance costs increased by 27% to EUR21.3m, faster than the increase in the
number of hours flown, due to an increase in the number of leased Boeing 737-800
aircraft from 17 to 24, partially offset by the improved reliability of the
Boeing 737-800's operated, a lower level of maintenance costs incurred due to
the retirement of the Boeing 737-200's and the positive impact of the
strengthening of the euro exchange rate against the US dollar.
Marketing and distribution costs increased by 33% to EUR11.6m due to a higher
level of marketing activity and related expenditure compared to the previous
year as the number of routes operated rose by 42% to 304 at the period end and
the number of bases increased by 1 to 15.
Aircraft rental costs increased by 23% to EUR25.4m reflecting an additional 7
aircraft on operating lease during the period.
Route charges rose by 17% to EUR98.4m due to an increase in the number sectors
flown, and a longer average sector length, offset by a reduction in enroute
charges in certain EU countries.
Airport and handling charges increased by 26% to EUR139.1m. This is higher than
the growth in passenger volumes and reflects the impact of increased costs at
some of our airports and in particular at our Dublin base, which has a
significantly higher cost per passenger, offset by lower costs at new airports
and bases (excluding Dublin), and the positive impact of the euro/sterling
exchange rate during the period.
Other expenses increased by 25% to EUR52.3m, which is less than the growth in
ancillary revenues due to improved margins on some new and existing products,
and cost reductions achieved on certain indirect costs.
Operating margins have increased by 1 point to 31% for the period due to the
reasons outlined above which has resulted in operating profits increasing by 37%
to EUR385.8m.
Interest receivable has increased by 62% to EUR28.9m due to a combination of
higher levels of cash and cash equivalents and increases in average deposit
rates earned in the period.
Interest payable increased by EUR4.5m due to the drawdown of debt to part fund
the purchase of new aircraft during the period and higher floating interest
rates.
The Company's Balance Sheet continues to strengthen due to the strong growth in
profits during the period. The Company generated cash from operating activities
of EUR431.6m which part funded the investment in financial assets of EUR185.4m
and capital expenditure during the period with the balance reflected in Total
Cash of EUR2,093.0m. Capital expenditure of EUR88.8m primarily comprised of the
delivery of one aircraft and advance payments for future aircraft deliveries.
Long term debt, net of repayments decreased by EUR42.8m during the period.
Shareholders' Equity at September 30, 2006 has increased by EUR304.8m to
EUR2,296.8m, compared to March 31, 2006 reflecting the EUR329.1m increase in
profitability during the period and the exercise of share options which
increased shareholder funds by EUR6.5m, offset by a reduction of EUR30.8m
resulting from the IFRS accounting treatment for derivative financial
instruments, pensions and stock options.
Detailed Discussion and Analysis Quarter Ended September 30, 2006
Profit after tax, increased by 24% to EUR213.4m due to average fares improving
by 6% and strong ancillary revenue growth, which was offset by fuel costs which
rose 34% to EUR169.6m reflecting the higher US dollar cost per gallon and the
one off step up in staff costs which rose by 38% to EUR57.1m. Operating margins,
as a result of these higher costs, fell by 1 point to 36%. Strong cost control
on other line items coupled with increases in total operating revenues resulted
in operating profit increasing by 23% to EUR249.1m compared to the previous
quarter ended September 30, 2005.
Total operating revenues increased by 27% to EUR689.8m whilst passenger volumes
increased by 21% to 11.5m. Total revenue per passenger increased by 5% in the
quarter due to a combination of higher average fares, and strong ancillary
revenue growth.
Scheduled passenger revenues increased by 28% to EUR602.1m due to a combination
of higher passenger numbers on existing routes, the successful launch of new
routes and a 6% improvement in average fares.
Ancillary revenues increased 23% to EUR87.7m, a faster growth rate than
passenger volumes, reflecting a strong performance in non-flight scheduled
revenues, on-board sales and other ancillary products
Total operating expenses increased by 30% to EUR440.7m due to the increased
level of activity, and in particular higher fuel and staff costs. Total
operating costs were also adversely impacted by an increase in the average
sector length, whilst higher US dollar fuel prices were partially offset by the
strength of the euro exchange rate against the US dollar and lower fleet burn
resulting from the newly installed winglets.
Staff costs have increased by 38% to EUR57.1m primarily due to a 30% increase in
average employee numbers to 3,881 in the quarter and the impact of pay increases
granted. Employee numbers rose due to an increase in our aircraft crewing ratios
as a result of continued increases in average sector length. Pilots, who earn
higher than the average salary, accounted for 43% of the increase in employment
during the period.
Depreciation increased by 21% to EUR36.0m due to an increase in the size of the
'owned' fleet from 74 to 87, offset by a lower amortisation charge due to the
retirement of Boeing 737-200 aircraft and the positive impact of a new engine
maintenance deal on the cost of aircraft amortisation. The strengthening of the
euro to US dollar also had a positive impact on the depreciation and
amortisation charge relating to new aircraft deliveries.
Fuel costs rose by 34% to EUR169.6m due to an increase in the number of sectors
flown, a 6% increase in sector length, and a significantly higher average US
dollar cost per gallon of fuel. The increased costs were partially offset by the
positive impact of the strengthening of the euro to the US dollar during the
year and a 2% reduction in fuel consumption due to the installation of winglets
on part of our Boeing 737-800 fleet.
Maintenance costs increased by 39% to EUR10.6m faster than the increase in the
number of hours flown due to an increase in the number of leased Boeing 737-800
aircraft from 17 to 24, partially offset by the improved reliability of the
Boeing 737-800's operated, a lower level of maintenance costs incurred due to
the retirement of the Boeing 737-200's, and the positive impact of the
strengthening of the euro exchange rate against the US dollar.
Marketing and distribution costs increased by 39% to EUR5.9m due to a higher
level of marketing activity and related expenditure compared to the previous
year as the number of routes operated rose by 42% to 304 at the period end and
the number of bases increased by 1 to 15.
Aircraft rental costs increased by 22% to EUR13.0m reflecting an additional 3
aircraft on operating lease during the period.
Route charges rose by 18% to EUR50.3m due to an increase in the number of
sectors flown and an increase of 6% in the average sector length, offset by a
reduction in enroute charges in certain EU countries.
Airport and handling charges increased by 28% to EUR71.2m, which was higher than
the growth in passenger volumes and reflects the impact of increased costs at
certain existing airports, specifically at our Dublin base which has a much
higher average cost per passenger, offset by lower costs at new airports and
bases, and the positive euro/sterling exchange rate.
Other expenses increased by 26% to EUR26.9m, which is higher than the growth in
ancillary revenues due to improved margins on some existing products and cost
increases on some indirect costs.
Operating margins have fallen by 1 point to 36% due to the reasons outlined
above whilst operating profits have increased by 23% to EUR249.1m during the
quarter.
Interest receivable has increased by 74% to EUR16.1m in the quarter due to the
combined impact of higher levels of cash and cash equivalents and increases in
average deposit rates earned compared to the same period last year.
Interest payable increased by 13% to EUR20.7m due to the drawdown of debt to
part fund the purchase of new aircraft and higher floating interest rates.
Notes to the Financial Statements
1. - Accounting Policies
This period's financial information has been prepared in accordance with the
accounting policies set out in Ryanair's consolidated financial statements
for the year ended March 31, 2006, which were prepared in accordance with
International Financial Reporting Standards ("IFRS") as endorsed by the EU.
The comparative financial information for the six month period ended
September 30, 2005 has been restated on a consistent basis.
2. - Approval of the Preliminary Announcement
The Audit Committee approved the consolidated financial statements for the
half year ended September 30, 2006 on November 3, 2006.
3. - Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the half year ended
September 30, 2006 and the comparative period are based on the results
reported under the group's IFRS accounting policies, as adjusted for certain
exceptional items.
4. - Available for Sale Securities
During the period the company acquired a EUR185.4m stake in Aer Lingus
representing 15% of its share capital at September 30, 2006.
5. - Accounting for Share-Based Payments
Under SFAS No. 123R, which was adopted by the Company on April 1, 2006,
the Company is required to account for share-based employee compensation
using a fair value based method. The Company has elected to use the
Binomial Lattice option pricing model to determine the fair-value of
share-based awards under SFAS No. 123R, consistent with that previously
used for pro forma disclosures under SFAS No. 123 ("Accounting for
Stock-Based Compensation").
The Company has elected to use the modified prospective transition
method as permitted by SFAS No. 123R and accordingly prior periods have
not been restated to reflect the impact of the revised standard. In this
period's financial information, the Company has, as a result of the
adoption of SFAS No. 123R, recorded incremental share-based compensation
expense of EUR2.012 million in its US GAAP income statement.
Prior to the adoption of SFAS No. 123R, the Company measured
compensation expense for its employee share-based compensation plans
using the intrinsic method prescribed by APB Opinion No. 25. The Company
applied the disclosure provisions of SFAS No. 123, as if the fair value
based method has been applied in measuring compensation expense. Under
APB Opinion No. 25, when the exercise price of the Group's employee
share options was equal to the market price of the underlying share on
the date of grant, no compensation expense was recognised. If the
Company had applied the fair value recognition provisions of SFAS No.
123 to share-based compensation during the three month period ended
September 30, 2005, reported income under US GAAP would have changed
from EUR174.087 million to EUR173.796 million with resulting Net income
per ADS, basic and diluted, of 113.57 Euro cents and 112.77 Euro cents
respectively.
Independent review report to Ryanair Holdings plc for the six months ended
September 30, 2006
Introduction
We have been engaged by the Company to review the financial information which
comprises the consolidated balance sheet of Ryanair Holdings plc at September
30, 2006 and the related consolidated statements of income, statement of
recognised income & expense and cash flows for the six month period then ended
and the related notes as set out on pages 1 to 7. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the Listing
Rules of the Irish Stock Exchange and the UK Financial Services Authority. Our
review has been undertaken so that we might state to the Company those matters
we are required to state to it in this report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company, for our review work, for this report, or for the
conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where there are any changes, and the reasons
for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
"Review of Interim Financial Information" issued by the Auditing Practices Board
for use in Ireland and the United Kingdom. A review consists principally of
making enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express an audit opinion on the
financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented at and for the six
months ended September 30, 2006.
KPMG November 3, 2006
Chartered Accountants
Dublin, Ireland
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
RYANAIR HOLDINGS PLC
Date: 06 November 2006
By:___/s/ James Callaghan____
James Callaghan
Company Secretary & Finance Director