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 February, 2008
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 Q3 TRAFFIC GROWTH OF 21%,
NET PROFITS FALL 27% TO EUR35M - IN LINE WITH GUIDANCE
Ryanair, Europe's largest low fares airline today (Monday, 4th February 2008)
announced third quarter after tax profits of EUR35m, a 27% decline over the
comparable quarter last year, and in line with previous guidance. This profit
figure excludes a EUR12.1m profit from aircraft disposals. Traffic grew by 21%
to 12.4m, yields fell by 4%, as revenues rose by 16% to EUR569m. The prior year
Q3 comparable was distorted by a one off EUR10m contract termination penalty
received from a previous hotel partner. Excluding this one off prior year Q3
receipt reveals an underlying profit decline of 10%. Unit costs were flat in the
quarter due primarily to a doubling of airport charges at Stansted, significant
cost increases at the Dublin Airport monopoly, combined with longer sector
lengths, offset in part by lower cost fuel hedges.
Summary Table of Results (IFRS) - in Euro
Quarter Ended Dec 31, 2006 Dec 31, 2007 % Increase
Passengers 10.3m 12.4m 21%
Revenue EUR493m EUR569m 16%
Adjusted Profit after Tax (Note 1) EUR48m EUR35m -27%
Adjusted Basic EPS(EuroCents) (Note 1) 3.09 2.35 -24%
Note 1: Quarter ended 31 December 07 excludes a gain of EUR12.1m net of tax
arising from the disposal of 5 Boeing 737-800 aircraft.
Announcing these results, Ryanair's CEO, Michael O'Leary said:
"This net profit of EUR35m is a creditable performance in very adverse market
conditions. It reflects Ryanair's 21% traffic growth, a 4% decline in yields,
flat unit costs and a strong ancillary sales performance. Ancillary revenues
(excluding a one off EUR10m termination payment in the prior year) grew by 30%
to EUR111m. Ancillary penetration continues to increase, and we are on target to
achieve our ancillary sales objective of 20% of revenues over the next 3 years.
Inflight mobile phone services will be tested on 25 aircraft - subject to
regulatory approval - during the April-June quarter and we are optimistic that
passengers will quickly adopt this service to make/receive calls and texts on
their mobile phones and blackberries.
"Whilst unit costs were flat during the quarter, excluding our fuel hedges they
rose by 6% due to the unjustified doubling of airport charges at the Stansted
Airport monopoly, significantly higher charges at the even less competitive
Dublin Airport monopoly and 7% longer sectors. Costs were positively impacted by
our decision to reduce Winter capacity at Stansted by 7 aircraft, while staff
costs rose by 18% to EUR67m due to an increase in cabin crew ratios which will
continue through the remainder of this fiscal year.
"We welcome the UK Government's decision to reject the anti-consumer proposal by
the CAA Regulator to dedesignate the Stansted Airport monopoly. We continue to
campaign for the break up of the BAA Airport monopoly in London, and/or a more
effective regulatory regime than that operated by the inept CAA Regulator. The
CAA stood idly by last year while Stansted Airport doubled passenger charges and
at the same time delivered abject service to airlines and passengers.
The London airports and consumers need a much tougher regulator than the
misguided CAA which has repeatedly put the needs of the BAA Stansted airport
monopoly before the reasonable interests of passengers and airport users.
"At Dublin, a similarly protected (Government owned) monopoly continues to raise
prices by up to 50% at a time when most other European airports are reducing
them. The DAA are pushing ahead with their crazy EUR800m second terminal, the
cost of which has escalated to more than four times its original EUR200m budget.
Passenger charges at Dublin Airport are rising at many times the rate of
inflation, because the Irish Aviation Regulator (who is even more ineffectual
than the CAA in the UK) is asleep on the job. Ryanair has called for his
dismissal on grounds of incompetence. He can't even run his own office
efficiently or effectively, never mind regulate a powerful, abusive monopoly
like the DAA.
"Thankfully at most other airports, where competition exists, airport and
handling costs are falling. This is as it should be in an era of ever declining
air fares. Our new bases at Alicante and Valencia in Spain, Belfast City in
Northern Ireland, and Bristol in the UK have performed well during their first
Winter and we expect this trend to continue. We have recently announced two new
bases at Bournemouth and Birmingham in the UK, where we expect to invest
significantly in new aircraft, new routes and new jobs in Summer 2008, as we
roll out Ryanair's guaranteed lowest fares to more regional UK cities. We
continue to have more new base opportunities than we can handle at present, and
expect to be in a position to announce at least two further European bases
shortly, both of which will launch in Winter 2008.
GUIDANCE FOR 07/08
"Looking forward to the end of the current fiscal year ('07/'08) we now have
sufficient visibility over Q4 bookings and yields to enable us to maintain our
previous guidance of net profit growth of 17.5% to approx. EUR470m for the full
fiscal year, (07/08). We expect the decline in average fares this Winter will be
close to 5% and within the range previously guided. Our ability to grow net
profits, in a year when most of our competitors are suffering declines or losing
money is testament to the continuing strength of Ryanair's guaranteed lowest
fare business model across Europe.
GUIDANCE FOR 08/09
"At this time it is too early to make any accurate forecasts in such volatile
markets for 2008/09. However with oil prices at $90 a barrel and fear of
recession in the UK and many other European economies, the current outlook for
the coming fiscal year is poor. We remain essentially unhedged for next year.
Current oil prices, which have risen by nearly 40% to $90 a barrel, will impose
significantly higher costs during a year when we are expanding capacity by
almost 20%. Costs will be hurt by a projected 5% increase in sector length. To
compound this negative outlook, European consumer confidence is waning which
would suggest that, unlike two years ago, (when higher yields compensated for
higher oil prices), next years yields may be flat or continue to fall, as
consumers become more price sensitive.
Our earnings may also be impacted by the recent weakness of Sterling which
accounts for a significant proportion of Ryanair's revenues.
"The European airline sector is presently facing one of these cyclical
downturns, with possibility of a "perfect storm" of higher oil prices, poor
consumer demand, weaker Sterling and higher costs at unchecked monopoly airports
such as Dublin and Stansted which account for a significant proportion of
Ryanair's traffic. While it is impossible to accurately forecast full year fuel
prices and yields this far in advance, there is now a significant chance that
profits may decline next year. At our most optimistic, a combination of flat
yields and $75 oil would see profits grow by 6% to approximately EUR500m, but at
our most conservative, if forward oil prices remain at $85, and consumer
sentiment/sterling weakness leads to a 5% reduction in yields, then profits in
the coming year could fall by as much as 50% to as low as EUR235m (excluding
profits from aircraft disposals). We would hope to be in a position to provide a
more informed update on guidance with the release of our full year results on
June 3rd, 2008.
"There can be only one competitive response to any consumer uncertainty, and
that is for Ryanair to slash fares and yields, stimulate traffic, encourage
price sensitive consumers, and promote new routes/base developments. The airline
business is highly cyclical and we have seen these downturns before. They pose
unique long term opportunities for the lowest cost producer - Ryanair - to grow
rapidly, open new markets, win share from competitors and speed up the pace of
industry consolidation which will lead to flag carriers withdrawing capacity
from certain markets and loss making competitors disappearing altogether.
"This process has already started in Europe. For example, Aer Lingus has already
withdrawn services on routes from Dublin to Seville, Newcastle, Poznan, and from
Shannon to London. We have also witnessed the withdrawal of British Airways from
Birmingham following the sale of its "Connect" subsidiary to Flybe and the
subsequent closure of 9 routes. Capacity has also been withdrawn by weaker so
called low fare carriers across Europe. Many of these carriers have cancelled
their growth plans, while others are in significant retrenchment. High fuel
costs combined with rising losses mean that some of these carriers will not
survive should this potential "perfect" storm materialise.
"Ryanair has the lowest cost base in the European industry and even in a
recession will continue to be substantially profitable. Despite the possibility
of a fall in profits next year, our airline continues to deliver the industry's
highest margins and will remain enormously cash generative, with a very strong
balance sheet. We continue to have over EUR2bn in cash despite spending over
EUR700m in the last twelve months acquiring a 29% stake in Aer Lingus and
completing a share buyback of EUR300m.
EUR200M SHARE BUY BACK
At our AGM in September 2007, shareholders authorised that directors could
re-purchase ordinary shares ("buyback") amounting to 5% of the company's issued
share capital. The directors have decided, in the best interests of the company
and its shareholders as a whole, to undertake a second buyback programme of up
to EUR200m. At the current market price of EUR3.60 this equates to a buyback of
approx. 3% of the company's issued share capital. Whilst there is no guarantee
that this buyback will be completed, we would not anticipate initiating any
buyback programme until after at least February 6th 2008, if at all. Ordinary
(and not ADR's) shares may be re-purchased under the programme in accordance
with the provisions of the company's annual re-purchase authority and the
requirements of the Irish Stock Exchange and UK listing rules. The company's
brokers, Davys, will conduct any share buyback programme and any shares
re-purchased will be cancelled immediately".
Ends. Monday, 4th February 2008
For further information please contact:
Howard Millar Pauline McAlester
Ryanair Holdings Plc Murray Consultants
Tel: 353-1-8121212 Tel: 353-1-4980300
www.ryanair.com
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 25 bases and 627 low fare
routes across 26 countries. By the end of March 2008 Ryanair will operate a
fleet of 163 Boeing 737-800 aircraft with firm orders for a further 99 new
aircraft (net of planned disposals), which will be delivered over the next 5
years. Ryanair currently employs a team of 5,000 people and expects to carry
circa 50.5 million scheduled passengers in the current fiscal year.
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Balance Sheet
measured in accordance with IFRS (unaudited)
At Dec 31, At Mar 31,
2007 2007
EUR'000 EUR'000
------- -------
Non-current assets
Property, plant and equipment 3,252,192 2,884,053
Intangible assets 46,841 46,841
Available for sale financial assets 325,478 406,075
-------- --------
Total non-current assets 3,624,511 3,336,969
-------- --------
Current assets
Inventories 2,777 2,420
Other assets 113,711 77,707
Trade receivables 24,519 23,412
Derivative financial instruments 57,907 52,736
-------- --------
Restricted cash 171,728 258,808
Financial assets: cash > 3 months 419,667 592,774
Cash and cash equivalents 1,459,606 1,346,419
-------- --------
Total current assets 2,249,915 2,354,276
-------- --------
Total assets 5,874,426 5,691,245
-------- --------
Current liabilities
Trade payables 55,727 54,801
Accrued expenses and other liabilities 676,863 807,136
Current maturities of debt 194,834 178,918
Derivative financial instruments 94,621 56,053
Current tax 42,300 20,822
-------- --------
Total current liabilities 1,064,345 1,117,730
Non-current liabilities
Provisions 38,630 28,719
Derivative financial instruments 49,440 58,666
Deferred income tax liability 153,824 151,032
Other creditors 113,218 112,177
Non-current maturities of debt 1,874,165 1,683,148
-------- --------
Total non-current liabilities 2,229,277 2,033,742
-------- --------
Shareholders' equity
Issued share capital 9,465 9,822
Share premium account 591,400 607,433
Retained earnings 2,059,991 1,905,211
Other reserves (80,052) 17,307
-------- --------
Shareholders' equity 2,580,804 2,539,773
-------- --------
Total liabilities and shareholders'equity 5,874,426 5,691,245
-------- --------
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Income Statement
measured in accordance with IFRS (unaudited)
Quarter Quarter Period Period
ended ended ended ended
Dec 31, Dec 31, Dec 31, Dec 31,
2007 2006 2007 2006
EUR'000 EUR'000 EUR'000 EUR'000
------- ------- ------- -------
Operating revenues
Scheduled revenues 458,664 397,595 1,760,662 1,489,697
Ancillary revenues 110,745 95,168 363,075 259,489
------- ------- ------- -------
Total operating revenues-
continuing operations 569,409 492,763 2,123,737 1,749,186
------- ------- ------- -------
Operating expenses
Staff costs 66,832 56,856 213,117 170,700
Depreciation 47,537 36,619 123,600 108,242
Fuel & oil 192,294 174,887 585,031 511,929
Maintenance, materials & repairs 14,265 10,846 41,205 32,159
Marketing & distribution costs 1,028 4,246 15,563 15,854
Aircraft rentals 18,343 15,457 55,050 40,851
Route charges 63,150 47,720 192,125 146,104
Airport & handling charges 94,003 65,584 302,886 204,682
Other 27,739 23,340 89,509 75,652
------- ------- ------- -------
Total operating expenses 525,191 435,555 1,618,086 1,306,173
------- ------- ------ -------
Operating profit - continuing
operations 44,218 57,208 505,651 443,013
Gain on disposal of property,
plant & equipment 13,650 - 13,650 -
Other income/(expenses)
Finance income 21,415 14,854 62,909 43,777
Finance expense (25,317) (20,812) (70,182) (62,123)
Foreign exchange gain/(losses) (3,486) (40) (1,999) (1,269)
------- ------- ------- -------
Total other income/(expenses) (7,388) (5,998) (9,272) (19,615)
------- ------- ------- -------
Profit before tax 50,480 51,210 510,029 423,398
Tax on profit on ordinary activities (3,302) (3,478) (55,255) (46,541)
------- ------- ------- -------
Profit for the period-all
attributable to equity
holders of parent 47,178 47,732 454,774 376,857
------- ------- ------- -------
Basic earnings per ordinary
share (in euro cents) 3.16 3.09 29.94 24.41
Diluted earnings per ordinary
share (in euro cents) 3.13 3.06 29.65 24.27
Weighted average number of
ordinary shares (in 000's)* 1,494,201 1,545,490 1,519,030 1,543,718
Weighted average number of
diluted shares (in 000's)* 1,508,550 1,559,984 1,534,001 1,552,738
* Adjusted for share split of 2 for 1 which occurred on February 26, 2007
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Cashflow Statement
measured in accordance with IFRS (unaudited)
Period Period
ended ended
Dec 31, Dec 31,
2007 2006
EUR'000 EUR'000
------- -------
Operating activities
Profit before tax 510,029 423,398
Adjustments to reconcile profits before tax to net
cash provided by operating activities
Depreciation 123,600 108,242
(Increase)/decrease in inventories (357) 1,470
(Increase)/decrease in trade receivables (1,107) 9,141
(Increase) in other current assets (13,780) (25,776)
Increase/(decrease) in trade payables 926 (15,057)
(Decrease) in accrued expenses (165,654) (40,618)
Increase in other creditors 1,041 72,571
Increase in maintenance provisions 9,911 9,769
(Gain) on disposal of property, plant and
equipment (13,650) -
(Increase)/decrease in interest receivable (4,857) 1,221
Increase in interest payable 2,138 7,047
Retirement costs 985 494
Share based payments 10,162 2,747
Income tax (paid)/refunded (17,902) 236
------- -------
Net cash provided by operating activities 441,485 554,885
------- -------
Investing activities
Capital expenditure (purchase of property,
plant and equipment) (578,444) (195,208)
Proceeds from sale of property, plant and
equipment 132,613 -
Purchase of equities classified as available
for sale (57,990) (342,410)
Reduction/(investment) in restricted cash 87,080 (136)
Reduction/(investment) in financial assets:
cash > 3 months 173,107 (198,158)
------- -------
Net cash used in investing activities (243,634) (735,912)
------- -------
Financing activities
Cost associated with repurchase of shares (299,994) -
Net proceeds from shares issued 8,397 10,055
Increase in long term borrowings 206,933 19,954
------- -------
Net cash provided by financing activities (84,664) 30,009
------- -------
Increase/(decrease) in cash and cash equivalents 113,187 (151,018)
Cash and cash equivalents at beginning
of the period 1,346,419 1,439,004
------- -------
Cash and cash equivalents at end of the period 1,459,606 1,287,986
------- -------
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Statement of Recognised Income and Expense
measured in accordance with IFRS (unaudited)
Quarter Quarter Period Period
ended ended ended ended
Dec 31, Dec 31, Dec 31, Dec 31,
2007 2006 2007 2006
EUR'000 EUR'000 EUR'000 EUR'000
--- --- --- ---
Cash flow hedge reserve-effective portion
of fair value changes to derivatives:
Net movements into/(out of)
cash flow hedge reserve 1,305 12,740 (5,953) (20,066)
Net decrease in fair value
of available for sale
financial asset (41,440) 18,063 (126,355) 18,063
------- ------- ------- -------
Income and expenditure
recognised directly in
equity (40,135) 30,803 (132,308) (2,003)
------- ------- ------- -------
Profit for the period 47,178 47,732 454,774 376,857
------- ------- ------- -------
Total recognised
income and expense 7,043 78,535 322,466 374,854
------- ------- ------- -------
Ryanair Holdings plc and Subsidiaries
Operating and Financial Overview
Introduction
For the purposes of the Management Discussion and Analysis ("MD&A") all figures
and comments are by reference to the adjusted income statement excluding the
exceptional items referred to below.
Exceptional items in the nine months ended December 31, 2007 amounted to
EUR12.1m (net of tax) which arose from the sale of 5 Boeing 737-800 aircraft.
Profit after tax increased by 21% compared to the previous nine months ended
December 31, 2007 to EUR454.8m, whilst adjusted profit after tax increased by
17% to EUR442.6m. During the quarter ended December 31, 2007, profit after tax
decreased by 1% to EUR47.2m whilst adjusted profit after tax decreased by 27% to
EUR35.0m.
Summary Nine Months ended December 31, 2007
Profit after tax increased by 17% to EUR442.6m, compared to EUR376.9m in the
comparative nine month period ended December 31, 2006 reflecting a 20% increase
in passenger numbers, a 2% decrease in fares (including checked in baggage
revenues) and strong growth in ancillary revenues. The growth in revenues was
offset by a combination of higher fuel, airport charges, and staff costs. Total
operating revenues increased by 21% to EUR2,123.7m, which was faster than the
20% growth in passenger volumes, as average fares decreased by 2% and ancillary
revenues grew by 40% to EUR363.1m. Total revenue per passenger as a result
increased by 1%, whilst Passenger Load Factor decreased by 1 point to 84% during
the period.
Total operating expenses increased by 24% to EUR1,618.1m, due to the increased
level of activity, and increased costs, associated with the growth of the
airline. Fuel, which represents 36% of total operating costs compared to 39%
last year, increased by 14% to EUR585.0m due to an increase in the number of
hours flown, offset by a decrease in the US dollar cost per gallon, a positive
movement in the US dollar exchange rate versus the euro, and a reduction in fuel
consumption arising from the installation of winglets. Staff costs rose by 25%
reflecting the growth in the airline, a share option charge of EUR9.1m, and an
increase in cabin crewing ratios. Excluding the charge of EUR9.1m for the share
option grant, staff costs would have increased by 20%. Airport and Handling
charges increased by 48% to EUR302.9m arising from the doubling of airport
charges at Stansted and higher charges at Dublin Airport. Unit costs rose by 3%
and operating margins decreased by 1 point to 24%, whilst operating profit
increased by 14% to EUR505.6m.
Net Margins decreased by 1 point to 21% for the reasons outlined above.
Earnings per share increased by 23% to 29.94 cent for the period.
Balance Sheet
Total cash decreased by EUR147.0m to EUR2,051.0m as the growth in profitability
was offset by the funding of, a EUR300m share buy back programme, an additional
EUR58.0m investment in Aer Lingus and EUR578.4m in capital expenditure largely
from internal resources. Total debt, net of repayments, increased during the
period by EUR206.9m. Shareholders' Equity at December 31, 2007 increased by
EUR41.0m to EUR2,580.8m, compared to March 31, 2007 due to the EUR454.8m
increase in profitability during the period and by EUR8.4m due to the exercise
of share options, offset by, EUR122.1m due to the impact of the required IFRS
accounting treatment for derivative financial instruments, available for sale
financial assets, stock options and a share buy back of EUR300m.
Detailed Discussion and Analysis Nine Months Ended December 31, 2007
Adjusted Profit after tax, increased by 17% to EUR442.6m due to a 20% increase
in passenger numbers, a 2% decrease in fares (including checked in baggage
revenues) and strong growth in ancillary revenues. The growth in revenues was
offset by a combination of, increased airport costs which rose by 48% to
EUR302.9m (arising from the doubling of airport charges at Stansted and higher
charges at Dublin Airport) and increased staff costs primarily due to higher
cabin crewing ratios, which rose by 25% to EUR213.1m. Operating margins, as a
result, decreased by 1 point to 24%, which in turn resulted in operating profit
increasing by 14% to EUR505.6m compared to the previous nine months ended
December 31, 2006.
Total operating revenues increased by 21% to EUR2,123.7m whilst passenger
volumes increased by 20% to 38.9m. Total revenue per passenger increased by 1%
due to strong ancillary revenue growth.
Scheduled passenger revenues increased by 18% to EUR1,760.7m reflecting a 2%
decrease in fares and a 20% increase in traffic due to increased passenger
numbers on existing routes and the successful launch of new routes and bases.
Load factor decreased by 1 point to 84% during the period due to a 22% increase
in seat capacity.
Ancillary revenues continue to outpace the growth of passenger volumes and rose
by 40% to EUR363.1m in the period. This performance reflects the strong growth
in onboard sales, excess baggage revenues, non-flight scheduled revenues, and
other ancillary products.
Total operating expenses rose by 24% to EUR1,618.1m due to the increased level
of activity, and the increased costs associated with the growth of the airline
particularly higher airport charges and staff costs. Total operating expenses
were also adversely impacted by a 7% increase in average sector length.
Staff costs have increased by 25% to EUR213.1m. This primarily reflects a 29%
increase in average employee numbers to 5,056, the impact of pay increases
granted during the period, and a EUR9.1m charge for a share option grant made to
eligible employees. Excluding the charge of EUR9.1m for the share option grant,
staff costs would have increased by 20%. Employee numbers rose due to the growth
of the business and an increase in cabin crewing ratios as a result of a new EU
working directive. Pilots, who earn higher than the average salary, accounted
for 24% of the increase in employees during the period.
Depreciation and amortisation increased by 14% to EUR123.6m. This reflects, net
of disposals, an additional 25 lower cost 'owned' aircraft in the fleet this
period compared to December 31, 2006, offset by a revision of the residual value
of the fleet to reflect current market valuations and the positive impact on
amortisation of the stronger euro versus the US dollar.
Fuel costs rose by 14% to EUR585.0m due to a 28% increase in the number of hours
flown offset by a 9% decrease in the euro equivalent cost per gallon of fuel
hedged in addition to a reduction in fuel consumption due to the installation of
winglets.
Maintenance costs increased by 28% to EUR41.2m, due to a combination of the
growth in the number of leased aircraft from 30 to 35, the increased level of
activity, offset by the positive impact of a stronger euro versus US dollar
exchange rate.
Marketing and distribution costs decreased by 2% to EUR15.6m due to the tight
control on expenditure and the increased focus on internet based promotions.
Aircraft rental costs increased by 35% to EUR55.1m as the weighted average
number of leased aircraft increased by 12 during the period compared to the same
period last year.
Route charges rose by 32% to EUR192.1m due to an increase in the number of
sectors flown and a 7% increase in the average sector length.
Airport and handling charges increased by 48% to EUR302.9m, significantly faster
than the growth in passenger volumes, and reflects the impact of the doubling of
unit costs at Stansted Airport and higher charges at Dublin Airport, offset by
lower costs at new airports and bases.
Other expenses increased by 18% to EUR89.5m, which is lower than the growth in
ancillary revenues due to improved margins on some existing products and cost
reductions on some indirect costs.
Operating margins have declined by 1 point to 24% due to the reasons outlined
above whilst operating profits have increased by 14% to EUR505.6m during the
period.
Interest receivable has increased by 44% to EUR62.9m for the period primarily
due to the increase in average deposit rates earned in the period, partially
offset by a lower average cash balance.
Interest payable increased by 13% to EUR70.2m due to the drawdown of debt to
part finance the purchase of new aircraft and the adverse impact of higher
interest rates.
Foreign exchange losses during the period of EUR2.0m are primarily due to the
negative impact, on foreign currency deposits, of changes in the US dollar and
sterling exchange rate against the euro.
Gains on disposal of property, plant and equipment of EUR13.7m arose on the sale
of 5 Boeing 737-800 aircraft.
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 EUR441.5m and EUR132.6m from the sale of Boeing 737-800 aircraft which part
funded the EUR300m share buy back programme, EUR58.0m increased investment in
Aer Lingus, and capital expenditure incurred during the period with the
remaining balance reflected in Total Cash of EUR2,051.0m. Capital expenditure
amounted to EUR578.4m which largely consisted of advance aircraft payments for
future aircraft deliveries the delivery of nineteen aircraft and two simulators.
Long term debt, net of repayments, increased by EUR206.9m during the period.
Shareholders' Equity at December 31, 2007 increased by EUR41.0m to EUR2,580.8m,
compared to March 31, 2007 due to the EUR454.8m increase in profitability during
the period, EUR8.4m arising from the exercise of share options, offset by
EUR122.1m reflecting the impact of IFRS accounting treatment for derivative
financial assets, available for sale financial assets, stock options and share
buy back of EUR300m.
Detailed Discussion and Analysis Quarter Ended December 31, 2007
Adjusted Profit after tax, decreased by 27% to EUR35.0m due to a 21% increase in
passenger numbers, offset by a 4% decrease in fares (including checked in
baggage revenues). Excluding the one off EUR10.0m contract termination penalty
receipt in the prior year comparative, profit after tax fell by 10%. The 16%
growth in Total Revenues was offset by a combination of increased airport costs
which rose by 43% to EUR94.0m arising from the doubling of airport charges at
Stansted and higher charges at Dublin Airport, and a one off step up in staff
costs, primarily due to higher cabin crewing ratios, which rose by 18% to
EUR66.8m. Operating margins, as a result, decreased by 4 points to 8%, which in
turn resulted in operating profit decreasing by 23% to EUR44.2m compared to the
comparative quarter ended December 31, 2006.
Total operating revenues increased by 16% to EUR569.4m whilst passenger volumes
increased by 21% to 12.4m. Total revenue per passenger decreased by 4% in line
with the decrease in average passenger fares.
Scheduled passenger revenues increased by 15% to EUR458.7m due to a 21% increase
in traffic reflecting increased passenger numbers on existing routes and the
successful launch of new routes and bases. During the period average fares
(including checked baggage revenues) were down by 4% whilst load factor remained
flat at 81% during the quarter.
Ancillary revenues increased by 16% to EUR110.7m in the quarter and excluding
the one off EUR10.0m contract termination penalty receipt in the prior year
comparative they rose by 29%. This performance reflects the strong growth in
excess baggage revenues, non-flight scheduled revenues, and other ancillary
products.
Total operating expenses rose by 21% to EUR525.2m due to the increased level of
activity, and the increased costs associated with the growth of the airline
particularly higher airport charges and staff costs. Total operating expenses
were also adversely impacted by a 7% increase in average sector length.
Staff costs have increased by 18% to EUR66.8m. This primarily reflects a 29%
increase in average employee numbers to 5,056 and the impact of pay increases
granted during the year. Employee numbers rose due to an increase in cabin
crewing ratios as a result of a new EU working directive. Pilots, who earn
higher than the average salary, accounted for 15% of the increase in employees
during the period.
Depreciation and amortisation increased by 30% to EUR47.5m. This reflects, net
of disposals, an additional 25 lower cost 'owned' aircraft in the fleet this
quarter compared to December 31, 2006, offset by a revision of the residual
value of the fleet to reflect current market valuations and the positive impact
on amortisation of the stronger euro versus the US dollar.
Fuel costs rose by 10% to EUR192.3m due to a 27% increase in the number of hours
flown offset by an 11% decrease in the average euro equivalent cost per gallon
of fuel hedged and a reduction in fuel consumption due to the installation of
winglets.
Maintenance costs increased by 31% to EUR14.3m, due to a combination of the
increase in the number of leased aircraft from 30 to 35, an increase in the
level of activity, offset by the positive impact of stronger euro versus the US
dollar exchange rate.
Marketing and distribution costs decreased to EUR1.0m due to the tight control
on expenditure and increased focus on internet based promotions.
Aircraft rental costs increased by 19% to EUR18.3m reflecting an additional 5
leased aircraft operating during the quarter compared to the same quarter last
year.
Route charges rose by 32% to EUR63.2m due to an increase in the number of
sectors flown and a 7% increase in the average sector length.
Airport and handling charges increased by 43% to EUR94.0m. This is higher than
the growth in passenger volumes and reflects the impact of the doubling of costs
at Stansted Airport and higher charges at Dublin Airport, offset by lower costs
at new airports and bases.
Other expenses increased by 19% to EUR27.7m, lower than the growth in ancillary
revenues excluding the one off EUR10.0m contract termination receipt in
ancillary revenues in the prior year comparative.
Operating margins fell by 4 points to 8% due to the reasons outlined above and
operating profits have decreased by 23% to EUR44.2m during the quarter.
Interest receivable has increased by 44% to EUR21.4m for the quarter primarily
due to the increase in average deposit rates earned in the period, offset
somewhat by a lower average cash balance.
Interest payable increased by 22% to EUR25.3m due to the drawdown of further
debt to part finance the purchase of new aircraft and the adverse impact of
higher interest rates.
Foreign exchange losses during the period of EUR3.5m are primarily due to the
negative impact, on foreign currency deposits, of changes in the US dollar and
sterling exchange rate against the euro.
Gains on disposal of property, plant and equipment of EUR13.7m arose on the sale
of 5 Boeing 737-800 aircraft.
Statement of the directors in respect of the nine month financial report
We confirm our responsibility for the nine month financial statements and that
to the best of our knowledge:
* the condensed set of financial statements comprising the condensed income
statement, the condensed statement of recognised income and expense, the
condensed balance sheet and the related notes have been prepared in accordance
with IAS 34 Interim Financial Reporting;
* the interim management report includes a fair review of the information
required by:
(a) Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations
2007, being an indication of important events that have occurred during the
first nine months of the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and uncertainties
for the remaining three months of the year; and
(b) Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations
2007, being related party transactions that have taken place in the first nine
months of the current financial year and that have materially affected the
financial position or performance of the entity during that period; and any
changes in the related party transactions described in the last annual report
that could do so.
The Group's auditors have not reviewed these condensed financial statements.
On behalf of the Board
David Bonderman Michael O'Leary
Chairman Chief Executive
February 4, 2008
Ryanair Holdings plc and Subsidiaries
Notes
1. Reporting entity
Ryanair Holdings plc (the "Company") is a company domiciled in Ireland. The
condensed consolidated interim financial statements of the Company for the nine
months ended December 31, 2007 comprise the Company and its subsidiaries
(together referred to as the "Group").
The consolidated financial statements of the Group as at and for the year ended
March 31, 2007 are available at www.ryanair.com
2. Statement of compliance
These unaudited condensed consolidated interim financial statements ("the
interim financial statements") have been prepared in accordance with
International Accounting Standard No. 34 ("IAS 34") "Interim Financial
Reporting". They do not include all of the information required for full annual
financial statements, and should be read in conjunction with the most recent
published consolidated financial statements of the Group.
The comparative figures included for the year ended March 31, 2007 do not
constitute statutory financial statements of the Group within the meaning of
regulation 40 of the European Communities (companies, group accounts)
regulations, 1992. Statutory financial statements for the year ended March 31,
2007 have been filed with the companies' office. The auditors' report on these
financial statements was unqualified.
The Audit Committee approved the interim financial statements for the nine
months ended December 31, 2007 on February 1, 2008.
3. Significant accounting policies
Except as stated otherwise below, this quarter's financial information has been
prepared in accordance with the accounting policies set out in the Group's most
recent published consolidated financial statements, which were prepared in
accordance with International Financial Reporting Standards ("IFRS").
4. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results (Operating and Financial
Overview) for the nine months ended December 31, 2007 and the comparative nine
months are based on the results reported under the Group's IFRS accounting
policies.
5. Estimates
The preparation of financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
Except as described below, in preparing these consolidated financial statements,
the significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied in the most recent published consolidated financial statements.
During the period ended December 31, 2007 management reassessed its estimates of
the recoverable amount of aircraft residual values following certain recent and
forward aircraft disposals and trends in the market.
6. Seasonality of operations
The Group's results of operations have varied significantly from quarter to
quarter, and management expects these variations to continue. Among the factors
causing these variations are the airline industry's sensitivity to general
economic conditions and the seasonal nature of air travel. Accordingly the first
half-year typically results in higher revenues and results.
7. Income tax expense
The Group's consolidated effective tax rate in respect of operations for the
nine months ended December 31, 2007 was approximately 11 percent, in line with
the same period last year.
8. Capital and reserves
Share buy back programme.
The Company commenced a share buy back programme in June 2007 and 59.5m shares,
at an approximate cost of EUR300m, have been purchased and cancelled. This
represents approximately 3.8% of the pre existing share capital of the Company.
9. Share based payments
The terms and conditions of the share option programme are disclosed in the most
recent published consolidated financial statements. In June 2007 a further grant
on similar terms was made to eligible employees, with a consequent charge to the
income statement in the period of approximately EUR9.1m.
10. Contingencies
The Group is engaged in litigation arising in the ordinary course of its
business. The Group does not believe that any such litigation will individually
or in aggregate have a material adverse effect on the financial condition of the
Group. Should the Group be unsuccessful in these litigation actions, management
believes the possible liabilities then arising cannot be determined but are not
expected to materially adversely affect the Group's results of operations or
financial position.
11. Capital commitments
During the nine months ended December 31, 2007 the Group announced the purchase
of 27 additional Boeing 737-800s. This brings Ryanair's total firm orders for
B737-800s to 308 and the total fleet size (net of planned disposals) to 262 by
2012. These additional aircraft are due for delivery in financial year ending
March 31, 2010.
12. Available for sale financial assets (Aer Lingus)
The following table sets out the movement in available for sale financial assets
in the nine month period.
EUR'000
-------
Balance at April 1, 2007 406,075
Purchase of equities 57,990
Net change in fair value (138,587)
----------
Balance at December 31, 2007 325,478
----------
As of December 31, 2007 the average cost per share of Aer Lingus was EUR2.52 and
the market value was EUR2.09, a decline of 17%. Accordingly the view at this
time under accounting rules is that this is neither "significant" nor
"prolonged", in particular because there has been a recovery in the share price
post period end, and therefore no impairment loss has been recorded.
However in the event that the asset becomes impaired the difference between the
cost of the shares and the market value is recorded as an impairment loss in the
profit and loss. At December 31, 2007 this amounted to EUR77.4m and on February
1, 2008 this had fallen to EUR41.6m. The Group will review this matter at the
end of each quarter.
13. Post balance sheet events
There were no significant post balance sheet events.
14. Loans and borrowings
The following is the movement in loans and borrowings (non-current and current)
during the half year.
EUR'000
-------
Balance at April 1, 2007 1,862,066
Loans raised to finance aircraft/simulator purchases 386,517
Repayments of debt borrowed (179,584)
----------
Balance at December 31, 2007 2,068,999
----------
15. Changes in shareholders' equity
Other Reserves
Share Capital
Ordinary premium Retained redemption Other
shares account earnings Shares reserves Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------- ------- ------- ------- ------- -------
Balance at
March 31,
2006 9,790 596,231 1,467,623 - (81,659) 1,991,985
------- ------- ------- -------- ------- -------
Issue of
ordinary
equity shares 32 11,202 - - - 11,234
Effective
portion of
changes in
fair value of
cash flow hedges - - - - 46,105 46,105
Net change
in fair value
of available
for sale assets - - - - 48,926 48,926
Share based
payments - - - - 3,935 3,935
Profit for
the financial
year - - 435,600 - - 435,600
Retirement
benefits - - 1,988 - - 1,988
------- ------- ------- -------- ------- -------
Balance at
March 31, 9,822 607,433 1,905,211 - 17,307 2,539,773
2007 ------- ------- ------- -------- ------- -------
Repurchase
of ordinary
equity shares - - (299,994) - - (299,994)
Issue of
ordinary
equity shares 21 8,376 - - - 8,397
Capital
redemption
reserve fund (378) (24,409) - 24,787 - -
Effective
portion of
changes in
fair value of
cash flow hedges - - - - (5,953) (5,953)
Net change
in fair value
of available
for sale assets - - - - (126,355) (126,355)
Share-based
payments - - - - 10,162 10,162
Profit for
the period - - 454,774 - - 454,774
------- ------- ------- -------- ------- -------
Balance at
December
31, 2007 9,465 591,400 2,059,991 24,787 (104,839) 2,580,804
------- ------- ------- -------- ------- -------
16. Analysis of operating revenues and segmental analysis
All revenues derive from the Group's principal activity and business segment as
a low fares airline and includes scheduled services, car hire, internet income
and related sales to third parties.
Revenue is analysed by geographical area (by country of origin) as follows:
Period Period
ended ended
Dec 31, Dec 31,
2007 2006
EUR'000 EUR'000
------- -------
United Kingdom 755,180 686,381
Other European countries 1,368,557 1,062,805
-------- -------
Balance at December 31, 2007 2,123,737 1,749,186
-------- -------
All of the Group's operating profit arises from low fares airline-related
activities, its only business segment. The major revenue earning assets of the
Group are comprised of its aircraft fleet, which is registered in Ireland and
therefore principally all profits accrue in Ireland. Since the Group's aircraft
fleet is flexibly employed across its route network in Europe, there is no
suitable basis of allocating such assets and related liabilities to geographical
segments.
17. Property, plant and equipment
Acquisitions and disposals
During the nine months ended December 31, 2007, the Group acquired assets with a
cost of EUR578.4m (nine months ended December 31, 2006: EUR195.2 million). There
were five Boeing 737-800 aircraft disposed of during the nine month period, the
sale proceeds of which amounted to EUR100.4m. Additional deposits have been
received in relation to forward sales.
18. US GAAP Reconciliation
Following on from the issuance by the SEC of rule 3235 "Acceptance from Foreign
Private Issuers of Financial Statements prepared in accordance with
International Financial Reporting Standards without reconciliation to US GAAP",
the Group has chosen to exclude a US GAAP Reconciliation from these interim
financial statements.
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: 04 February 2007
By:___/s/ James Callaghan____
James Callaghan
Company Secretary & Finance Director