2nd Quarter & Interim Results
Ryanair Holdings PLC
9 November 1999
RYANAIR ANNOUNCES SIGNIFICANTLY IMPROVED RESULTS FOR THE
HALF YEAR ENDED SEPTEMBER 30, 1999
Ryanair Holdings Plc today (9 November, 1999) released
record financial results for the half year ended 30
September 1999. Passengers volumes grew by 12% to 2.9
million. Average yields also increased by virtue of longer
average sector length leading to total revenue growth of 17%
to IR£153.2m. Well focused cost control meant that
operating expenses increased by 16%, reflecting costs
(primarily staff and airport costs), associated with this
growth and the launch costs of 7 new routes. As a result,
profit after tax has risen by 23% to IR£33.4m. Earnings per
share grew by 19%.
Summary of Results (Irish GAAP)
Half Year September 30, September %
1999 30, 1998 Increase
Passengers 2.89m 2.58m 12%
Revenues IR£153.2m IR£130.5m 17%
Profit after tax IR£33.4m IR£27.2m 23%
Basic EPS 19.95p 16.79p 19%
Commenting on these results, Ryanair's CEO, Michael O'Leary said;
'We are pleased with these results which reflect the
extraordinary talent of our 1,200 people, who continue to
deliver growth in traffic and profitability despite the
intensely competitive market place here in Europe.
During the past 6 months we have purchased five new
Boeing 737-800 next generation, aircraft, introduced them
successfully and profitably, and opened up seven new low
fare routes from London to France, Italy, Germany and
Northern Ireland. The success of our unique low fare
services is such that even though we compete head to head
with Europe's largest flag carriers, we have on average
achieved 70% plus load factors, and profitability on
these new routes from day one.'
'The Ryanair formula, and current market conditions are
somewhat unusual. The ending of intra-EU duty free has
not - as expected - had any material impact on our
revenues or costs. However average fares and yields have
been somewhat higher than we expected, even though the
yields of most of our competitor flag carriers have been
declining steeply. This is due to Sterling strength, our
increased sector length and our self imposed constraint
on capacity out of Ireland. We would not expect this
phenomenon to continue as we remain committed to driving
down fares and yields and offering more and more European
consumers even lower fares.'
'The competitive outlook is becoming somewhat clearer.
The trend towards alliances in Europe is increasing
air fares. British Airways continues to cut capacity and
cede traffic to the low fare sector, while GO has clearly
failed to have any impact on Ryanair, despite their
substantial trading losses.
In Ireland, Aer Lingus has now unveiled a new strategy
to the London route which will see them withdraw from
Stansted and pursue a strategy of 'very significant
increase in per passenger yield'. While our competitors
try to increase fares, Ryanair will increase capacity and
keep fares down. In January we will increase our
schedule on Dublin-Stansted by 4 flights daily and we
will reduce fares with a new, and lowest ever, £10 return
fare. We must not allow other airlines to penalise the
Irish consumer, or the potential visitors to Ireland.'
'Our campaign to launch up to 10 new low fares routes
from Ireland to Continental Europe continues to attract
widespread support. In recent weeks the Irish Exporters
Association, the Irish Hotels Federation and the Irish
Travel Agents Association have all called on the
Government to back Ryanair's plans for dramatic growth in
routes, visitors, jobs and tourism at both Dublin and
Shannon airports. We remain confident that the
Government will support our plan, because the alternative
- higher fares and zero growth - will be damaging to
Irish tourism and our economy.'
'If however, we are unsuccessful, investors can rest
assured that our finances will not be effected. The cost
base is already agreed for up to 6 new routes from the UK
to Europe, and we will continue to grow profitably and
with the benefit of a lower cost base, away from Ireland,
as we have in the last two years. In September, just 22%
of our total traffic originated in Ireland, so it is
Irish tourism, not Ryanair that will suffer if the
Government puts the Irish airport monopoly's interests
before those of the travelling public.'
'Current trading remains moderately ahead of our
demanding targets thanks to higher than expected yields
and the strength of Sterling. We expect to drive down
yields through the Winter to maintain our traffic growth
and prevent our flag carrier competitors from raising
fares to the detriment of consumers. We believe that
our trading performance will continue to be resilient,
whilst most of our major competitors struggle to maintain
their higher fare strategies.
Finally, we remain comfortable with the present range of
analysts forecasts for the full financial year.'
For further information Howard Millar/Michael Cawley Jim Milton
please contact: Ryanair Holdings Plc Murray Consultants
Tel: 353-1-8121212 Tel: 353-1-6614666
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. In the fiscal
year to March 2000 the airline expects to carry 6 million
passengers on its 34 low fare routes between the UK, Ireland and
Continental Europe. Ryanair currently employs over 1,200 people
in its Irish and UK operations and operates a fleet of 21 Boeing
737-200 and 5 Boeing 737-800 next generation aircraft. Ryanair
shares are quoted on the Nasdaq, London and Dublin Stock
Exchanges.
Ryanair Holdings plc and Subsidiaries
Consolidated Profits and Loss Accounts in accordance
with UK and Irish GAAP (unaudited)
Half Half
Quarter Quarter Year Year
Ended Ended Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
1999 1998 1999 1998
IR'000 IR'000 IR'000 IR'000
Operating Revenues
Scheduled revenues 78,224 63,511 136,179 114,579
Ancillary revenues 8,806 9,119 17,002 15,877
Total operating revenues
continuing operations 87,030 72,630 153,181 130,456
Operating expenses
Staff costs 9,584 7,898 18,566 15,487
Depreciation 8,544 7,378 16,652 14,435
Other operating expenses
Fuel & Oil 8,881 8,388 16,593 15,632
Maintenance, materials and 3,257 2,801 6,237 5,164
repairs
Marketing and distribution 6,689 5,512 13,039 11,358
costs
Aircraft rentals 678 1,178 1,127 1,753
Route charges 5,772 4,751 10,436 8,740
Airport charges 9,621 6,745 16,997 12,842
Other 6,098 5,765 12,000 10,898
Total operating expenses 59,124 50,416 111,647 96,309
Operating profit-continuing
operations 27,906 22,214 41,534 34,147
Other income/(expenses)
Interest receivable and
similar income 1,449 1,652 2,543 2,376
Interest payable and similar (796) (47) (1,090) (107)
charges
Foreign exchange 103 86 (107) 82
gains/(losses)
Gains on disposal of fixed 0 15 0 21
assets
Total other income/(expenses) 756 1,706 1,346 2,372
Profit on ordinary activities
before taxation 28,662 23,920 42,880 36,519
Tax on profit on ordinary (6,270) (6,100) (9,484) (9,306)
activities
Profit for the financial 22,392 17,820 33,396 27,213
period
Basic earnings per ordinary
share (IR Pence) 13.37 10.75 19.95 16.79
Fully diluted earnings per
ordinary share (IR pence) 13.26 10.75 19.79 16.79
Number of ordinary shares (in 167,425 165,844 167,425 162,109
000's)
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheets in accordance with
UK and Irish GAAP
September March
30, 1999 31,1999
IR'000 IR'000
(unaudited)
Fixed Assets
Tangible assets 214,567 160,264
Financial assets 42 42
Total Fixed Assets 214,609 160,306
Current Assets
Cash and liquid
resources 184,766 124,904
Accounts receivable 18,081 14,550
Other assets 4,144 4,966
Inventories 11,216 10,173
Total current assets 218,207 154,593
Total assets 432,816 314,899
Current liabilities
Accounts payable 24,555 24,229
Accrued expenses and
other liabilities 64,380 61,408
Current maturities of
long term debt 5,723 1,390
Short term borrowings 2,405 3,066
Total current 97,063 90,093
liabilities
Other liabilities
Provisions for
liabilities and charges 10,445 8,881
Long Term debt 94,262 18,275
104,707 27,156
Shareholder's funds -
equity
Called -up share capital 6,697 6,697
Share Premium Account 102,861 102,861
Profit and loss account 121,488 88,092
Shareholder's funds -
equity 231,046 197,650
Total liabilities and
shareholders' funds 432,816 314,899
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statements in Accordance
with UK and Irish GAAP (unaudited)
Half Half
year year
Ended Ended
Sept 30, Sept 30,
1999 1998
IR'000 IR'000
Net cash inflow from operating 61,602 54,126
activities
Returns on investments and
servicing of finance 1,328 1,513
Taxation (11,772) (8,521)
Capital expenditure (including
aircraft deposits) (70,955) (38,322)
Net cash inflow before financing
and use of liquid resources (19,797) (8,796)
Financing 80,320 46,393
(Increase)in liquid resources (45,831) (52,842)
Increase in cash 14,692 2,347
Analysis of movement in liquid
resources
Liquid resources at beginning of
period 108,715 46,197
Increase in period 45,831 52,842
Liquid resources at end of period 154,546 99,039
Analysis of movement in cash
At beginning of period 13,123 3,168
Net cash inflow 14,692 2,347
Net cash at end of period 27,815 5,515
Ryanair Holdings plc and Subsidiaries
Consolidated Statement of Changes in Shareholders' Funds - Equity
in accordance with UK and Irish GAAP (unaudited)
Ordinary Share Profit
shares Premium and
account loss Total
account
IR£'000 IR'000 IR'000 IR'000
Balance at April 1, 6,697 102,861 88,092 197,650
1999
Profit for the - - 33,396 33,396
period ------ ------ ------ ------
Balance at Sept 30, 6,697 102,861 121,488 231,046
1999
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Account in Accordance with US GAAP
(unaudited)
Quarter Quarter Half Half
Ended Ended Year Year
Sept Sept Sept Sept
30, 30, 30, 30,
1999 1998 1999 1998
IR'000 IR'000 IR'000 IR'000
Operating Revenues
Scheduled revenues 78,224 63,511 136,179 114,579
Ancillary revenues 8,806 9,119 17,002 15,877
Total operating revenues
- continuing operations 87,030 72,630 153,181 130,456
Operating expenses
Staff costs 9,544 7,674 18,486 15,040
Depreciation 8,163 5,658 15,882 11,071
Other operating expenses
Fuel & Oil 8,881 8,388 16,593 15,632
Maintenance, materials and 3,257 7,846 6,237 14,804
repairs
Marketing and distribution costs 6,689 5,512 13,039 11,358
Aircraft rentals 678 1,178 1,127 1,753
Route charges 5,772 4,751 10,436 8,740
Airport charges 9,621 6,745 16,997 12,842
Other 6,081 5,748 11,966 10,864
Total operating expenses 58,686 53,500 110,763 102,104
Operating profit - continuing
operations 28,344 19,130 42,418 28,352
Other income/(expenses)
Interest receivable and similar 1,449 1,652 2,543 2,376
income
Interest payable and similar (796) (47) (1,090) (107)
charges
Foreign exchange (losses)/gains (1,376) 984 (460) (2,390)
Gains on disposal of fixed 0 15 0 21
assets
Total other income/(expenses) (723) 2,604 993 4,680
Profit on ordinary activities
before taxation 27,621 21,734 43,411 33,032
Tax on profit on ordinary
activities (5,862) (5,219) (9,398) (7,833)
Profit for the financial period 21,759 16,515 34,013 25,199
Basic earnings per ordinary
share (IR Pence) 13.00 9.96 20.32 15.54
Diluted earnings per ordinary
share (IR pence) 12.89 9.96 20.15 15.54
Basic earnings per ADS (IR
pence)* 64.98 49.79 101.58 92.90
Diluted earnings per ADS (IR
pence)* 64.45 49.79 100.75 92.90
Number of ordinary shares (in
000's) 167,425 165,844 167,425 162,109
*Each ADS represents five
ordinary shares
Note 1 - Restatement of Comparative Results
In accordance with US accounting rules, changes in accounting policies
result in a one time charge, known as a cumulative catch up adjustment,
in the quarter in which the change is made. This contracts with Irish/UK
accounting principles under which the impact of a change in accounting
policy is recorded in the quarter and years impacted and historical
financial statements are re-stated.
As a result, the consolidated US GAAP profit and loss accounts of
Ryanair Holdings plc & subsidiaries set out above are not comparable as
the basis of accounting for maintenance impacting on maintenance
expense, depreciation and taxation is significantly different in 1999
than 1998.
If the US GAAP results had been re-stated for the change in accounting
policy Net Income for the quarter to September 30, 1998 and for the six
months to September 30, 1998 would have increased to US$19.1million and
US$30.1million respectively and basic earnings per ADS (Irish pence)
would have increased by IR57.58pence and IR92.90pence respectively.
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 Half Half
Ended Ended Year Year
Ended Ended
Sept Sept Sept Sept
30, 30, 30, 30,
1999 1998 1999 1998
IR'000 IR'000 IR'000 IR'000
Profit as reported in the
consolidated profit and loss
accounts and in accordance
with UK and Irish GAAP 22,392 17,820 33,396 27,213
Adjustments
Pension 35 23 70 45
Unrealised (losses)/gains
forward exchange contracts (1,479) 898 (353) 2,308
Employment grants 17 213 34 426
Depreciation on tangible
fixed assets:
- basis of accounting for
August 1996 transaction 294 345 596 689
- basis of accounting for
aircraft acquired from
Northill Limited 87 87 174 174
Darley Investments Limited 17 17 34 34
Share option compensation (12) (12) (24) (24)
expense
Taxation effect of above 408 (291) 86 (745)
Effect of changes in
accounting policies:
Maintenance and
depreciation 0 (3,757) 0 (7,139)
Tax 0 1,172 0 2,218
Net income in accordance
with U.S. GAAP 21,759 16,515 34,013 25,199
(B) Consolidated Cashflow
Statements in accordance
with US GAAP
Half Half
Year Year
Ended Ended
Sept Sept
30, 30,
1999 1998
IR£000 IR£000
Cash Inflow from operating
activities 51,158 47,118
Cashflow from investing
activities (135,783) (90,050)
Cashflow from financing
activities 79,659 45,677
(Decrease)/Increase in cash
and cash equivalents (4,966) 2,745
Cash and cash equivalents at
beginning of period 76,948 43,605
Cash and cash equivalents at
end of period 71,982 46,350
Cash and cash equivalents
under US GAAP 71,982 46,350
Deposits with a maturity of
between three and six months 112,784 59,093
Cash and liquid resources
under UK and Irish GAAP 184,766 105,443
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between UK, Irish and US generally
accepted
accounting principles (continued) (unaudited)
(C) Shareholders' Funds Sept 30, Sept 30,
equity 1999 1998
IR'000 IR'000
Shareholders' equity as
reported in the
consolidated balance
sheets (UK and Irish 231,046 181,562
GAAP)
Adjustments:
Pension 511 395
Unrealised gains on
forward exchange 546 830
contracts
Employment grants (494) (428)
Basis of accounting for
August 1996 transactions (2,182) (4,875)
Basis of accounting for
aircraft acquired from
Northill Limited (315) (663)
Darley Investments
Limited (430) (498)
Share option compensation
expense 20 68
Investments 1,979 0
Tax effect of adjustments 320 239
Cumulative effect of
change in accounting
policies 0 (18,210)
Effect of change in
accounting policies:
Maintenance and
depreciation 0 (7,139)
Tax 0 2,218
------- -------
Shareholders' equity as 231,001 153,499
adjusted to accord with
US GAAP
Opening shareholders'
equity under US GAAP 196,822 80,880
Investments 166 0
Net income in accordance
with US GAAP 34,013 25,199
Stock issued for cash 0 47,420
Closing shareholder's _______ _______
equity under US GAAP 231,001 153,499
Ryanair Holdings plc
Management Discussions and Analysis of Results
Summary
Half Year Ended September 30, 1999
Profit after tax has increased by 23% to IR£33.4m, compared
to IR£27.2m in the previous half year ended September 30,
1998. Total Operating Revenues, grew by 17% to IR£153.2m,
whilst passenger volumes increased by 12% to 2.9m.
Total Operating Expenses increased by 16% to IR£111.6m, due
to the increased level of activity, and the increased costs,
primarily staff and airport costs, associated with the
growth of the airline. Profit Before Tax has increased by
17% to IR£42.9m. The Corporation Tax rate for the period
was 22% compared to 25% for the previous quarter, and
reflects the impact of the decline in the headline rate of
corporation tax in Ireland.
Quarter Ended September 30, 1999
Profit after tax has increased by 26% to IR£22.4m, compared
to IR£17.8m in the previous half year ended September 30,
1998. Total Operating Revenues, grew by 20% to IR£87m,
whilst passenger volumes increased by 16% to 1.62m.
Total Operating Expenses increased by 17% to IR£59.1m, due
to the increased level of activity, and the increased costs,
primarily staff and airport costs, associated with the
growth of the airline. Profit Before Tax has increased by
20% to IR£28.7m. The Corporation Tax rate for the period
was 22% compared to 26% for the previous quarter, and
primarily reflects the impact of the decline in the headline
rate of corporation tax in Ireland.
Balance Sheet at September 30, 1999
Cash and Liquid Resources have increased from IR£125.0m. at
March 31, 1999 to IR£184.8m at September 30, 1999,
reflecting the increased cash flows from the profitable
trading performance. During the half year the company
incurred capital expenditure of IR£71.0m primarily financed
by an increase in the level of debt. Shareholder's Funds at
September 30, 1999 have increased to IR£231.1m, compared to
IR£197.7m at March 31, 1999.
Discussion and Analysis
Half Year Ended September 30, 1999
Profit after tax has increased by 23% to IR£33.4m, compared
to IR£27.2m in the previous half year ended September 30,
1998.
Total Operating Revenues, grew by 17% to IR£153.2m, whilst
passenger volumes increased by 12% to 2.9m.
Scheduled Passenger Revenues increased by 19% to IR£136.2m
due to an increase in passenger volumes of 12%, and an
increase in the average yield per passenger, primarily due
to the higher yields on the longer European routes.
Ancillary Revenues increased by 7% to IR£17.0m which was
lower than the growth in passenger volumes, and reflects the
reduction in average spend per passenger post the cessation
of duty free, being offset by, increased revenues from other
ancillary activities.
Total Operating Expenses increased by 16% to IR£111.6, due
to the increased level of activity, and the increased costs
primarily staff and airport costs associated with the growth
of the airline.
Staff Costs have increased by 20% to IR£18.6m. The increase
in staff costs reflects a 16% increase in average employment
to 1,242. Staff costs also rose due to the impact of a pay
increase granted, which at 3%, was ahead of the level set by
the national wage agreement.
Depreciation increased by 15% to IR£16.7m, reflecting the
impact of the acquisition of five new Boeing 737-800 next
generation aircraft, and the amortisation of capitalised
maintenance costs.
Fuel Costs rose by 6% to IR£16.6m. This reflects the impact
of a 10% increase in the number of sectors flown, being
offset by a reduction in the average cost per gallon of fuel
primarily reflecting the impact of the forward hedging
contracts entered into during 1998.
Maintenance Costs increased by 21% to IR£6.2m, reflecting
the increase in the number of sectors flown, and the
increased line maintenance costs associated with the
expansion of our Stansted base.
Marketing and Distribution Costs have increased by 15% to
IR£13.0m, due to a combination of an increase in passenger
volumes, and the increased costs associated with the launch
of seven new routes.
Aircraft Rental Costs decreased by IR£0.6m to IR£1.1m
reflecting the continued decline in the need to rent
additional seat capacity.
Route Charges increased by 19% to IR£10.4m due to a 10%
increase in the number of sectors flown, and an increase in
the average sector length.
Airport Charges increased by 32% to IR£17m, due to an
increase in the number of passengers flown, and the impact
of increased airport charges on some existing routes, offset
by, lower charges on the new routes from the UK to Europe.
Other Expenses increased by 10% to IR£12m, which was lower
than the growth of passenger volumes and reflects the lower
level of ancillary costs post the cessation of
duty free. Operating Profits have increased by 22% to
IR41.5m for the reasons outlined above.
Interest Receivable increased by IR£0.1m to IR£2.5.m due to
the increase in cash and liquid resources being offset by
lower Euro interest. Interest Payable increased by IR£1.0m
due to the increased level of debt arising from the
acquisition of the five new aircraft.
Corporation Tax for the half year was 22% compared to 25% in
the previous quarter and primarily reflects the impact of
the decline in the headline rate of corporation tax in
Ireland.
The Company's Balance Sheet continues to highlight the
impact of the profitable trading performance during the half
year. Cash and liquid resources increased from IR£125.0m at
March 31, 1999 to IR£184.8m reflecting the strong cashflows
during the half year. The company incurred further capital
expenditure of IR£71.0m during the half year which was
primarily financed by an increase in the level of debt. The
four Boeing 737-800 next generation aircraft were all
delivered, as scheduled, during the half year.
Shareholder's Funds at September 30, 1999 have increased to
IR£231.0m compared to IR£197.7m at March 31, 1999.
Ryanair Holdings plc
Management Discussion and Analysis of Results
Quarter Ended September 30, 1999
Profit after tax has increased by 26% to IR£22.4m, compared
to IR£17.8m in the previous quarter ended September 30,
1998.
Total Operating Revenues, grew by 20% to IR£87.0m, whilst
passenger volumes increased by 16% to 1.62m.
Scheduled Passenger Revenues increased by 23% to IR£78.2 due
to an increase in passenger volumes of 16%, and an increase
in the average yield per passenger, primarily due to the
higher yields on the longer European routes.
Ancillary Revenues declined by 3% to IR£8.8m reflecting the
reduction in average spend per passenger due to the
cessation of duty free sales, being offset, by increased
revenues from other ancillary activities.
Total Operating Expenses increased by 17% to IR£59.1m, due
to the increased level of activity, and the increased costs
primarily staff and airport costs associated with the growth
of the airline.
Staff Costs have increased by 21% to IR£9.6m. The increase
in staff costs reflects a 16% increase in average employment
to 1,282. Staff costs also rose due to the impact of a pay
increase granted, which at 3%, was ahead of the level set by
the national wage agreement.
Depreciation increased by 16% to IR£8.5m, reflecting the
increased depreciation costs arising from the acquisition of
five new Boeing 737-800 next generation aircraft, and the
amortisation of capitalised maintenance costs.
Fuel Costs rose by 6% to IR£8.9m. This reflects the impact
of an 11% increase in the number of sectors flown, being
offset by a reduction in the average cost per gallon of fuel
primarily reflecting the impact of the forward hedging
contracts entered into during 1998.
Maintenance Costs increased by 16% to IR£3.3m, reflecting
the increase in the number of sectors flown, and the
increased line maintenance costs associated with the
expansion of the Stansted base.
Marketing and Distribution Costs have increased by 21% to
IR£6.7m, due to a combination of an increase in passenger
volumes, and the increased costs associated with the launch
of seven new routes.
Aircraft Rental Costs declined by IR£0.5m to IR£0.7m
reflecting the continued decline in the need to rent
additional seat capacity.
Route Charges increased by 21% to IR£5.8m due to an 11%
increase in the number of sectors flown, and an increase in
the average sector length.
Airport Charges increased by 43% to IR£9.6m, due to an
increase in the number of passengers flown, and the impact
of increased airport charges on some existing routes, offset
by, lower charges on the new routes from the UK to Europe.
Other Expenses increased by 6% to IR£6.1m, which was lower
than the growth in passenger volumes and reflects the lower
level of ancillary costs post the cessation of duty free.
Operating Profits have increased by 26% to IR£27.9m for the
reasons outlined above.
Interest Receivable declined by 12% to IR£1.4m reflecting
the impact of the reduction in Euro interest rates.
Interest Payable increased to IR£0.8m due to the increased
level of debt arising from the acquisition of the five new
aircraft.
Corporation Tax rate for the quarter was 22% compared to 26%
in the previous quarter and primarily reflects the impact of
the decline in the headline rate of corporation tax in
Ireland.
The Company's Balance Sheet continues to highlight the
impact of the profitable trading performance during the
period. Cash and liquid resources increased from IR£125.0m
at March 31, 1999 to IR£184.8m reflecting the strong
cashflows during the period. The company incurred further
capital expenditure of IR£71m primarily financed by an
increase in the level of debt. During the quarter the
fourth and fifth Boeing 737-800 next generation aircraft
were both delivered, as scheduled, in mid and late August,
respectively.
Shareholder's Funds at September 30, 1999 have increased to
IR£231.0m compared to IR£197.7m at March 31 1999.
Notes to the Financial Statements
1. Percentage of Shares held by EU Nationals
The company has undertaken to notify the shareholders
twice yearly of the percentage of ordinary shares held
by EU nationals. Accordingly, on September 30, 1999
not less than 52.1% of the ordinary shares were held by
EU nationals.
2. Accounting Policies
The accounting policies followed in the preparation of
these interim consolidated financial statements have
not changed from those set out in the Annual Report for
the year ended March 31, 1999.
3. Approval of the Financial Statements
The consolidated financial statements for the Half Year
and Quarter ended were approved by the Audit Committee
on November 5, 1999.
4. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for
the Half Year and Quarter ended September 30, 1999 are
based on the results reported under Irish and UK GAAP.
5. Year 2000 Compliance
The company established a senior management working
team to review the ability of the Company's information
systems processing to continue operating unimpaired in
the year 2000 and thereafter. A number of the Company's
key information systems (including the operations,
engineering and primary financial systems) were
replaced over the course of the last three years and
the Company has completed the testing and any
applicable upgrading of those systems. The Company
anticipates that incremental costs of related external
assistance and system enhancements (including technical
staff time and the rental of testing equipment) in
relation to the Year 2000 issue will be approximately
$550,000 and will be funded through cash flows from
operations. This estimated level of expenditures is
based on the fact that Ryanair has expended significant
resources (approximately $900,000) in replacing or
upgrading its systems and hardware over the last three
years to be Year 2000 compliant.
Ryanair also has received documentation from Boeing
identifying which Boeing manufactured equipment Boeing
regards as not being Year 2000 compliant, none of which
is currently installed on Ryanair's fleet or proposed
to be installed on the 737-800 aircraft scheduled for
delivery in the future.
The Company is also evaluating the extent to which
systems which are material to its business and which
are provided by third-parties are Year 2000 compliant
or, if not, when and if such compliance will be
achieved. However, the Company has no control over
compliance of these systems which include, among
others, air traffic control and airport related
systems, and computer reservation and ticketing
systems. Failure of these types of third-party systems
to achieve Year 2000 compliance would have a material
adverse effect on the Company's financial condition and
results of operations before and after December 31,
1999 and, in the worst case, could result in aircraft
accidents involving serious injury or death. In
relation to the Company's host reservation systems
(BABS), the Company has already completed testing and
confirmed that the system is Year 2000 compliant.
The Company has substantially completed the testing
and, where applicable, has upgraded or replaced its key
information systems in order for them to be Year 2000
compliant. Testing and any necessary upgrading of the
Company's other systems will be completed by mid-
November 1999. The Company is also preparing a
contingency plan in the event of a Year 2000-related
failure of any of its key information systems. In the
event the Company does not complete any additional
phases of its evaluation or if third-parties are not
Year 2000 compliant by December 31, 1999, the most
reasonable worst case scenario would be a reduction in
or suspension of operations, which could have a
material adverse impact on the Company's business,
results of operations and financial condition.
Disruptions in the economy generally resulting from
Year 2000 issues could also materially adversely effect
the Company. The Company could be subject to litigation
for computer systems failure, equipment shutdown or
failure to properly date business records. The amount
of potential liability and lost revenue cannot be
reasonably estimated at this time. In addition, there
can be no assurance that public concern over airline
safety related to Year 2000 will not develop. Should
this concern develop, it could have a materially
adverse effect on the number of passengers the Company
carries and on its financial condition and results of
operations.
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