1st Quarter Results

Ryanair Holdings PLC 9 August 2000 RYANAIR ANNOUNCES STRONG GROWTH AND RECORD RESULTS FOR THE FIRST QUARTER Ryanair Holdings Plc today (August 9th 2000) announced strong growth and record financial results for the First Quarter ended June 30, 2000. Total revenues grew by 37% to Eur115.0m, reflecting a 32% increase in passenger volumes to 1.7m, an increase in average yields due to a longer sector length and the strength of Sterling to the Euro. Operating expenses increased by 39%, which was fractionally ahead of revenue growth, reflecting the increased costs associated with the growth of the airline, the delivery of five new aircraft and the launch of ten new routes during the quarter. As a result profits increased by 29% to a new record of Eur18.1m for the first quarter. Summary Table of Results (Irish GAAP) - in Euro's Quarter End June 30, 2000 June 30, 1999 % Increase Passengers 1.67m 1.27m 32% Revenue Eur115.0m Eur84.0m 37% Profit after tax Eur18.1m Eur14.0m 29% Basic EPS (Euro 5.16 4.17 24% Cents) Announcing these results in London, Ryanair's Chief Executive, Michael O'Leary said: 'Ryanair's strong growth in the first quarter reflects the continuing roll out of our successful low fares formula across Europe. These results again highlight Ryanair's ability to grow traffic in both new and existing markets, by giving customers the airline service they want most, namely widely available low air fares'. 'During this quarter, we took delivery of five more new 737-800 series aircraft, and launched ten new routes with daily services from London Stansted to Malmo in Sweden, Perpignan and Nimes in the South of France, Alghero, Lamezia and Brescia in Italy and Hamburg in Germany. We also initiated services from Shannon to London Stansted and Frankfurt Hahn, and our fourth route from Glasgow Prestwick to Frankfurt Hahn. These routes are performing well, with strong load factors despite the fact that they are in their first months of operation'. 'Ryanair's strong growth continues to be underpinned by the success of our Internet venture, www.ryanair.com. During the quarter we became the only Internet site in Europe to guarantee the lowest air fares, and this radical initiative has helped us to accelerate our penetration on new routes by targeting low prices and special offers to new customers. The rapid passenger acceptance of www.ryanair.com. as the source of the lowest air fares in Europe enabled us to reduce travel agent commissions from 7.5% to 5% and we have terminated our relationship with the expensive Galileo CRS system with effect from 01 August. The significant savings arising from such initiatives will enable us to continue to offer even lower air fares through www.ryanair.com , and this in turn should help us to maintain our strong traffic growth in the current year'. 'The strength of these results in the first quarter is further evidence of Ryanair's ability to consistently deliver growth in traffic and profitability, even in adverse market conditions such as those which persist currently. No other European airline, either flag carriers, or the more recent low fare ' Ryanair imitators' can match this track record of sustained profitable growth'. 'Whilst Ryanair and our principal UK airports Stansted and Glasgow Prestwick are growing at 30% per annum, UK traffic to/from Dublin Airport ( the Irish Government owned monopoly which has significantly increased costs this year) has lurched from 10 successive years of record growth to stagnation in just six months despite the record strength of Sterling against the Euro. The abrupt ending of Ireland's ten year record of traffic and tourism growth from the UK (Ireland's largest market) is directly due to Aer Rianta's fundamentally flawed strategy of increasing prices and still expecting growth to continue. Their rejection of Ryanair's offer last year to launch up to ten new low fare routes from Ireland to Continental Europe, was clearly a strategic blunder and we continue to urge the Irish Government to reverse the Aer Rianta strategy so that tourism growth to Ireland can be revived'. 'I remain somewhat cautious about the general market outlook. Whilst current traffic growth and trading performance is good, there are some factors outside of our control which are artificially enhancing this performance at present, not least of which continues to be the strength of Sterling and our successful fuel hedging policy. We continue to be conservative in our medium term expectations for Sterling and fuel prices. Despite this, we remain happy with the current performance and comfortable with the general range of analysts forecasts'. For results and further information Howard Millar Pauline McAlester please contact: Ryanair Holdings Plc Murray Consultants www.Ryanair.com Tel: 353-1-8121212 Tel:353-1-6633332 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 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 45 low fare routes across 11 countries. Ryanair has a fleet of 31 Boeing 737's, orders for up to a further 35 new 737-800's which will be delivered over the next 4 years. Ryanair currently employs a team of over 1400 people and will fly 7 million passengers in the current year. Ryanair Holdings plc and Subsidiaries Consolidated Profits and Loss Accounts in accordance with UK and Irish GAAP (unaudited) Quarter Quarter Ended Ended June June 30 30 2000 1999 EUR'000 EUR'000 Operating Revenues Scheduled revenues 103,268 73,588 Ancillary revenues 11,773 10,407 Total operating revenues continuing operations 115,041 83,995 Operating expenses Staff costs 14,822 11,405 Depreciation and Amortisation 13,290 10,295 Other operating expenses Fuel & Oil 13,370 9,792 Maintenance, materials and 5,098 3,784 repairs Marketing and distribution 11,037 8,063 costs Aircraft rentals 2,444 570 Route charges 8,196 5,922 Airport and Handling charges 15,206 9,366 Other 9,312 7,494 Total operating expenses 92,775 66,691 Operating profit-continuing 22,266 17,304 operations Other income/(expenses) Interest receivable and 3,311 1,389 similar income Interest payable and similar 1,715) (373) charges Foreign exchange losses (1,141) (267) Gains on disposal of fixed 0 0 assets Total other income/(expenses) 455 749 Profit on ordinary activities before taxation 22,721 18,053 Tax on profit on ordinary (4,634) (4,081) activities Profit for the period 18,087 13,972 Earnings per ordinary share* Basic - (Euro cents) 5.16 4.17 Diluted (Euro cents) 5.10 4.14 Number of ordinary shares (in 000's)* 350,253 334,850 Basic Diluted 354,459 337,424 * The company implemented a 2:1 share split on February 28th, 2000. Share capital and earnings per share figures have been restated to give effect to the share split. Ryanair Holdings plc and Subsidiaries Consolidated Balance Sheets in accordance with UK and Irish GAAP (unaudited) Quarter Quarter Ended Ended June 30 June 30 2000 1999 EUR'000 EUR'000 Fixed Assets Tangible assets 440,879 315,032 Financial assets 36 36 Total Fixed Assets 440,915 315,068 Current Assets Cash and liquid 420,396 355,248 resources Accounts receivable 19,613 21,974 Other assets 6,879 6,478 Inventories 14,541 13,933 Total current assets 461,429 397,633 Total assets 902,344 712,701 Current liabilities Accounts payable 24,776 22,861 Accrued expenses and other 136,942 107,445 Liabilities Current maturities of long term debt 20,354 9,567 Short term borrowings 1,660 3,780 Total current 183,732 143,653 liabilities Other liabilities Provisions for liabilities and charges 16,043 15,279 Long Term debt 242,669 112,412 258,712 127,691 Shareholder's funds - equity Called -up share capital 8,902 8,892 Share Premium Account 248,539 248,093 Profit and loss account 202,459 184,372 Shareholder's funds - 459,900 441,357 equity Total liabilities and shareholders' funds 902,344 712,701 Ryanair Holdings plc and Subsidiaries Consolidated Cashflow Statements in Accordance with UK and Irish GAAP (unaudited) Quarter Quarter Ended Ended June 30 June 30 2000 1999 EUR'000 EUR'000 Net cash inflow from operating 63,637 25,792 activities Returns on investments and servicing of finance 1,140 1,083 Taxation 0 0 Capital expenditure (including aircraft deposits) (139,011) (53,150) Net cash (outflows) before financing and use of liquid (74,234) (26,275) resources Financing 141,502 55,738 (Increase) in liquid resources (68,200) (24,191) ((Decrease) / Increase in cash (932) 5,272 Analysis of movement in liquid resources Liquid resources at beginning of 334,149 138,039 year 68,200 24,191 Increase in period Liquid resources at end of period 402,349 162,230 Analysis of movement in cash At beginning of year 17,319 16,663 Net cash (outflow)/inflow (932) 5,272 Net cash at end of period 16,387 21,935 Ryanair Holdings plc and Subsidiaries Consolidated Statement of Changes in Shareholders' Funds - Equity in accordance with UK and Irish GAAP (unaudited) Share Profit Ordinary Premium and shares account loss Total account EUR'000 EUR'000 EUR'000 EUR'000 Balance at April 1, 8,892 248,093 184,372 441,357 2000 Issue of ordinary equity shares (net of issue costs) 10 446 0 456 Profit for the 0 0 18,087 18,087 period Balance at June 8,902 248,539 202,459 459,900 30,2000 Ryanair Holdings plc and Subsidiaries Consolidated Profit and Loss Account in Accordance with US GAAP (unaudited) Quarter Quarter Ended Ended June June 30 30 2000 1999 EUR'000 EUR'000 Operating Revenues Scheduled revenues 103,268 73,588 Ancillary revenues 11,773 10,407 Total operating revenues - continuing operations 115,041 83,995 Operating expenses Staff costs 14,623 11,354 Depreciation and Amortisation 13,000 9,801 Other operating expenses Fuel & Oil 13,370 9,792 Maintenance, materials and 5,098 3,784 repairs Marketing and distribution costs 11,037 8,063 Aircraft rentals 2,444 570 Route charges 8,196 5,922 Airport and Handling charges 15,206 9,366 Other 9,290 7,473 Total operating expenses 92,264 66,125 Operating profit - continuing 22,777 17,870 operations Other income/(expenses) Interest receivable and similar 3,311 1,389 income Interest payable and similar (1,715) (373) charges Foreign exchange gains 1,331 1,163 Gains on disposal of fixed 0 0 assets Total other income/(expenses) 2,927 2,179 Profit on ordinary activities before taxation 25,704 20,049 Tax on profit on ordinary (5,317) (4,490) activities Net income 20,387 15,559 Net income per ADS - Basic(Euro cents) 29.10 23.23 - Diluted(Euro cents) 28.76 23.06 Weighted Average number of shares* - Basic 350,253 334,850 - Diluted 354,459 337,424 The Company implemented a 2:1 share split on February 28th, 2000. Share capital and earnings per share figures have been restated to give effect to the share split. (Each ADS represents five ordinary shares) Ryanair Holdings plc and Subsidiaries Summary of significant differences between UK, Irish and US generally accepted accounting principles (unaudited) (A) Net Income under US GAAP Quarter Quarter Ended Ended June 30 June 30 2000 2000 EUR'000 EUR'000 Profit as reported in the consolidated profit and loss accounts and in accordance with UK and Irish GAAP 18,087 13,972 Adjustments Pension 58 44 Unrealised gains forward exchange contracts 2,472 1,430 Employment grants 141 22 Basis of accounting for August 1996 transaction 180 383 Basis of accounting for aircraft acquired from 110 110 Northill Limited Darley Investments Limited 22 22 Share option compensation 0 (15) expense Taxation effect of above (683) (409) adjustments Net income under US GAAP 20,387 15,559 (B) Consolidated Cashflow Statements in accordance with US GAAP (unaudited) Quarter Quarter Ended Ended June 30 June 30 2000 1999 EUR'000 EUR'000 Cash Inflow from operating activities 64,776 26,875 Cashflow from investing (128,231) (57,599) activities Cashflow from financing 139,381 57,626 activities Increase in cash and cash equivalents 75,926 26,902 Cash and cash equivalents at beginning of the period 121,430 97,704 Cash and cash equivalents at end of period 197,356 124,606 Cash and cash equivalents under US GAAP 197,356 124,606 Deposits with a maturity of between three and six months 233,040 65,339 Cash and liquid resources under UK and Irish GAAP 420,396 189,945 Ryanair Holdings plc and Subsidiaries Summary of significant differences between UK, Irish and US generally accepted accounting principles (unaudited) June 30 June 30 2000 1999 (C) Shareholders' Funds EUR'000 EUR'000 equity Shareholders' equity as reported in the consolidated balance sheets (UK and Irish 459,900 264,936 GAAP) ADJUSTMENTS: Pension 981 604 Unrealised (losses)/gains on forward exchange contracts (142) 2,571 Employment grants (1,193) (648) Basis of accounting for August 1996 transactions (1,351) (3,144) Basis of accounting for aircraft acquired from (69) (511) Northill Limited (481) (567) Darley Investments Limited 0 41 Share Option compensation 988 3,058 expense 550 (112) Investments Tax effect of adjustments 459,183 266,228 Shareholder's equity as adjusted to accord with US GAAP Opening shareholder's equity under US GAAP 439,340 249,913 Investments (1,000) 756 Net income in accordance with US GAAP 20,387 15,559 Stock issued for cash 456 0 Closing shareholder's equity 459,183 266,228 US GAAP Ryanair Holdings plc Management Discussion and Analysis of Results Summary Quarter Ended June 30, 2000 Profit after tax has increased by 29% to Eur18.1m, compared to Eur14.0m in the previous quarter ended June 30, 1999. Total Operating Revenues, grew by 37% to Eur115.0m whilst passenger volumes increased by 32% to 1.7m. Total Operating Expenses increased by 39% to Eur92.8m, due to the increased level of activity, and the increased costs, primarily staff, depreciation and airport & handling costs, associated with the growth of the airline. Profit Before Tax has increased by 26% to Eur22.7m. The effective Corporation Tax rate for the quarter was 20% compared to 23% for the previous year, and primarily reflects the impact of the decline in the headline rate of corporation tax in Ireland. Balance Sheet Cash and Liquid Resources have increased from Eur355.2m at March 31, 2000 to Eur420.4m at June 30, 2000, reflecting the increased cash flows from the profitable trading performance. During the quarter the company incurred capital expenditure of Eur139.0m primarily financed by an increase in the level of debt. Shareholder's Funds at June 30, 2000 have increased to Eur459.9m, compared to Eur441.4m at March 31, 2000. Detailed Discussion and Analysis Quarter Ended June 30, 2000 Profit after tax has increased by 29% to Eur18.1m driven by strong growth in passenger volumes, and continued tight cost control. Operating margins have declined by 1% due to the increased level of activity whilst Operating Profit increased by 29% to Eur22.3m compared to the quarter ended June 30, 1999. Profit before tax increased by 26%, which is lower than the percentage increase in Operating Profit due to higher interest costs arising from the increase in aircraft related debt. Total Operating Revenues increased by 37% to Eur115.0m whilst passenger volumes increased by 32% to 1.7m. Scheduled Passenger Revenues increased by 40% to Eur103.3m due to a combination of increased passenger numbers, an increase in average yields primarily due to the longer sector length, and the positive impact on fares of the strength of Sterling to the Euro. Ancillary Revenues increased by 13% to Eur11.8m which is lower than the growth in passenger volumes, due to a reduction in the average spend per passenger post the cessation of duty free on July 1, 1999, being offset by, strong growth in revenues from other ancillary activities. Total Operating Expenses increased by 39% to Eur92.8m due to the increased level of activity, and the increased costs primarily staff, depreciation and airport & handling costs associated with the growth of the airline. Staff costs have increased by 30% to Eur14.8m. This increase reflects an 18% increase in average employee numbers to 1,422. Pilots, who earn higher than the average salary, accounted for 25% of the increase in employment. Staff costs also rose due to the impact of pay increases granted which were between 3% to 5.5%. Depreciation and Amortisation increased by 29% to Eur13.3m due to an increase in the number of aircraft owned from 23 to 31, and the amortisation of capitalised maintenance costs. Fuel costs rose by 37% to Eur13.4m due to a 24% increase in the number of sectors flown, an increase in the average sector length, and an increase in the average cost per gallon of fuel. Maintenance costs increased by 35% to Eur5.1m reflecting an increase in the size of the fleet operated, an increase in the number of flight hours, and the increased line maintenance costs due to the continued expansion of our Stansted base. Marketing and Distribution Costs increased by 37% to Eur11.0m due to a combination of an increase in passenger volumes, increased distribution costs, and the marketing costs associated with the launch of ten new routes. Aircraft Rental Costs increased by Eur1.9m to Eur2.4m reflecting the need to rent additional seat capacity during the quarter to continue the route expansion programme. Route Charges increased by 38% to Eur8.2m due to an increase in the number sectors flown, and an increase in the average sector length. Airport and Handling Charges increased by 62% to Eur15.2m due to an increase in the number of passengers flown, the impact of increased airport and handling charges primarily at Dublin and Stansted airports, and the adverse impact of the strength of Sterling to the Euro, offset by, lower charges on our new European routes. Other Expenses increased by 24% to Eur9.3m which was higher than the growth in ancillary revenues, and reflects the increased ancillary product costs arising from the change of product mix, post the cessation of duty free. Operating Profits have increased by 29% to Eur22.3m due to the reasons outlined above. Interest Receivable increased by Eur1.9m to Eur3.3m reflecting the strong growth in cash resources arising from the profitable trading performance during the quarter. Interest Payable increased by Eur1.3m to Eur1.7m due to the increased level of debt arising from the acquisition of five new aircraft. Taxation increased in the quarter by Eur0.6m to Eur4.6m whilst the Corporation Tax rate declined to 20% compared to 23% in the previous quarter due to the reduction in the headline rate of Corporation Tax in Ireland. The Company's Balance Sheet continues to strengthen due to the combined benefit of strong growth in profits and the acquisition of five new Boeing 737-800 next generation aircraft. The Company generated cash from operating activities of Eur63.6m which partly funded the acquisition of five 737-800 aircraft and additional aircraft deposits. Capital expenditure amounted to Eur139m during the quarter primarily financed by an increase in debt. Shareholder's Funds at June 30,2000 have increased to Eur459.9m compared to Eur441.4m at March 31, 2000. Notes to the Financial Statements 1. Accounting Policies The accounting policies followed in the preparation of these consolidated financial statements for the quarter ended June 30, 2000 are consistent with those followed in the financial year ended March 31, 2000. 2. Approval of the Financial Statements The consolidated financial statements for the quarter ended June 30, 2000 were approved by the Audit Committee on August 8, 2000. 3. Generally Accepted Accounting Policies The Management Discussion and Analysis of Results for the quarter ended June 30, 2000 are based on the results reported under Irish and UK GAAP.

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