Annual Results
Ryanair Holdings PLC
01 June 2004
RYANAIR ANNOUNCES ANNUAL PROFITS OF €227m
A NET MARGIN OF 21%, AS TRAFFIC GROWS 47%
Ryanair, Europe's No.1 low fares airline today (1 June 2004) announced
better than forecast financial results for the full year ended 31 March
2004. Annual passenger traffic grew by a record 47% to over 23m. This growth
was driven by significantly lower fares. Yields declined by 14% during the
full year and consequently total revenues rose by 28% to over €1 billion for
the first time. Unit costs during the year were reduced by 6% with the
result that total operating costs rose by 39%, significantly less than the
rate of traffic growth. Ryanair's adjusted after tax profit margin fell from
an exceptional 28% last year to an industry leading 21%, and adjusted
profits for the year have fallen by 5% to €226.6m. Contrary to our earlier
fears, our adjusted profit in the final quarter marks our 28th consecutive
profitable quarter since Ryanair first floated in May 1997.
Summary Table of Results (Irish GAAP) - in Euro
Year ended Mar 31,2003 Mar 31, 2004 %Increase
Passengers 15.74m 23.13m 47%
Revenue €842.50m €1,074.20m 28%
Profit after tax €239.40m €226.60m -5%
(Note 1)
Basic EPS 31.71 29.91 -6%
(Euro Cents) (Note 1)
Note 1:Adjusted profit after tax and EPS, excludes the non-recurring costs of
€14.9m (net of tax) arising from the earlier than planned retirement of 6 Boeing
737-200 aircraft, the re-organisation of 'Buzz' in April'03 of €2.7m (net of
tax), and a Goodwill charge of €2.3m.
Announcing these results, Ryanair's Chief Executive, Michael O'Leary said;
'These results demonstrate yet again what a superb job the 2,300 people of
Ryanair do in both good times and bad. This year was characterised by
adverse market conditions including Sterling weakness, the war in Iraq, the
threat of terrorist attacks, significantly higher oil prices, and intense
price competition all over Europe from chronically loss making flag and new
entrant carriers, most of whom are losing money on an enormous scale.
Despite these challenges Ryanair has significantly lowered fares for our
customers, carried over 23 million passengers, still maintained a world
leading after tax profit margin of over 20% and ended the year with over
€1.2 billion in cash.
These results cover a year during which we achieved many new milestones
including;
1. •Opening two new bases in Rome Ciampino and Barcelona Girona.
2. •Launching 73 new routes, boosting the network to 150.
3. •Taking delivery of 18 new Boeing 737-800 aircraft.
4. •Acquiring Buzz Stansted Ltd.
5. •Carrying 2 million passengers in one month (July'03) for the first time.
6. •Overtaking British Airways traffic in the UK/Europe market.
7. •Becoming the No.1 on-time major airline in Europe.
'Our two new bases in Rome Ciampino and Barcelona Girona are performing
extremely well and current bookings indicate that load factors at both bases
will exceed 85% throughout the Summer period. Ryanair continues to be the
lowest cost airline in Europe and we will continue to exploit this enormous
cost leadership to grow profitably while many of our competitors lose money
and/or go out of business.
'It remains our medium term view that (similar to Southwest in the U.S.)
there will only be one or possibly two large low fares airlines in Europe
and we are determined that the biggest and lowest cost of these carriers
will be Ryanair. Others who have higher cost or higher fare models will have
to endure losses or switch capacity away from head to head competition with
Ryanair (such as Aer Lingus on many Ireland-UK Provincial routes and more
recently BmiBaby and EasytJet on the East Midlands-Barcelona route), because
their higher cost base makes them unable to compete with Ryanair's low
fares.
'There will continue to be regulatory battles, such as those in Strasbourg
and Charleroi but these will prove to be temporary obstacles. The growth of
competition, choice and low fare air travel in Europe is unstoppable. As
more and more airports compete to win our business, costs will fall, because
the existing competition rules allow publicly owned airports to compete on a
level playing field with privately owned airports. We remain confident that
we will ultimately win both of our appeals on the Strasbourg and Charleroi
cases. The need for Ryanair's low fares has been highlighted by the damage
done at Strasbourg Airport where Air France's high fares has caused traffic
on the London route to collapse from almost 20,000 to just 3,000 a month,
immediately following Ryanair's temporary withdrawal.
'A lot of hysteria has been generated in recent weeks about higher oil
prices. We believe the growth of low fare air travel will not be damaged or
slowed by higher oil prices, which will only hasten the demise of some of
the current wave of loss making start-ups and high fare flag carriers. The
recent decision by British Airways, Air France and KLM, among others to
impose fuel surcharges is typical of the anti-consumer mindset of high fares
airlines. Whilst we are almost fully hedged till the end of Q.2, we are
largely unhedged thereafter, as it would be unwise to lock in at the current
high forward rates. Our view is that prices will fall this Winter, or next
year and only then will we hedge, in order to benefit from such reductions.
Unlike some high fare carriers Ryanair by contrast will absorb higher oil
prices by making cost savings in other areas. We will not impose fuel
surcharges on our customers, and have little doubt that our traffic will
continue to thrive as a result of higher price differentials between Ryanair
low fares and those of our surcharging competitors.
'Our outlook for the coming 12 months remains very conservative. We expect
strong traffic passenger growth of circa 20%. Our seat capacity will rise by
just 16% this year as Buzz Stansted has been unable to agree reasonable
lease terms with ILFC and due to this uncertainty these aircraft (which are
presently operated by Buzz Stansted under contract to Ryanair) have been
removed from Ryanair's forthcoming Winter schedule. Current load factors are
higher than this time last year, which confirms our view that we will have
no problems filling our fleet of larger 189 seat aircraft once the
exceptional capacity growth of last year returns to a more normal 20% rate.
We continue to expect yields to decline. With almost 50% of the seats booked
for the Summer season, the yield attrition seems to be towards the lower end
of our forecast range at -5% to -10%, but next Winter, as many of our loss
making competitors dump prices to try to stay alive, we expect the yield
declines to increase within a range of -10% to -20%. There will be more
airline casualties next Winter, a process that has already started in recent
months with the closure of four airlines in Ireland, the UK and Scandinavia.
'The European consumer has repeatedly shown over the past 20 years that they
support Ryanair. In every country and in every marketplace, Ryanair provides
the lowest fare air travel with the best punctuality, the best customer
service, on brand new 737-800 series aircraft from uncongested, easy to use
local airports. We intend over the coming years to lower prices further as
we grow our traffic to over 50 million passengers per annum and in doing so
making Ryanair Europe's largest international scheduled airline. Over the
past 12 months over 23 million passengers saved an average of just over €100
each by choosing Ryanair over our competitors. We look forward to doubling
these savings for European consumers over the coming four years.'
Dublin 01.06.04
ENDS.
For results and further
information
please contact: Howard Millar Pauline McAlester
Ryanair Holdings Plc Murray Consultants
www.Ryanair.com Tel:353-1-8121212 Tel: 353-1-4980300
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 154 low fare routes
across 16 countries. Ryanair operates a fleet of 72 aircraft, and firm
orders for up to a further 101 new 737-800's which will be delivered over
the next 5 years. Ryanair currently employs a team of 2,300 people and
expect to carry approximately 28 million scheduled passengers in the current
year.
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
with UK and Irish GAAP (unaudited)
Year Year
ended ended
March 31, March 31,
2004 2003
€'000 €'000
Operating Revenues
Scheduled revenues 924,566 731,951
Ancillary revenues 149,658 110,557
Total operating revenues -continuing operations 1,074,224 842,508
Operating expenses
Staff costs 123,624 93,073
Depreciation and amortisation 98,130 76,865
Other operating expenses
Fuel & Oil 174,991 128,842
Maintenance, materials 43,420 29,709
and repairs
Marketing and 16,141 14,623
distribution costs
Aircraft rentals 11,541 -
Route charges 110,271 68,406
Airport and Handling 147,221 107,994
charges
Other 78,034 59,522
Total operating expenses 803,373 579,034
Operating profit before
non-recurring items, and
goodwill 270,851 263,474
Aircraft retirement costs (16,552) -
Buzz re-organisation costs (3,012) -
Amortisation of goodwill (2,342) -
(21,906) -
Operating profit after
non-recurring items, and
goodwill 248,945 263,474
Other income/(expenses)
Foreign exchange gains 3,217 628
(Loss) on disposal of fixed assets (9) (29)
Interest receivable and similar income 23,891 31,363
Interest payable and similar charges (47,564) (30,886)
Total other income/(expenses) (20,465) 1,076
Profit before taxation 228,480 264,550
Tax on profit on ordinary activities (21,869) (25,152)
Profit for the year 206,611 239,398
Earnings per ordinary share
-Basic (Euro cent) 27.28 31.71
-Diluted (Euro cent) 27.00 31.24
Adjusted earnings per ordinary
share*
-Basic (Euro cent) 29.91 31.71
-Diluted (Euro cent) 29.61 31.24
Number of ordinary shares (in 000's)
-Basic 757,447 755,055
-Diluted 765,131 766,279
* Calculated on Profit for the year before non-recurring items
(net of tax) and Goodwill.
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheets in accordance
with UK and Irish GAAP (unaudited)
March 31, March 31,
2004 2003
€'000 €'000
Fixed assets
Tangible assets 1,576,526 1,352,361
Intangible Assets 44,499 -
Total fixed assets 1,621,025 1,352,361
Current Assets
Cash and liquid resources 1,257,350 1,060,218
Accounts receivable 14,932 14,970
Other assets 19,251 16,370
Inventories 26,440 22,788
Total current assets 1,317,973 1,114,346
Total assets 2,938,998 2,466,707
Current liabilities
Accounts payable 67,936 61,604
Accrued expenses and other liabilities 338,208 251,328
Current maturities of long term debt 67,986 63,291
Short term borrowings 345 1,316
Total current liabilities 474,475 377,539
Other liabilities
Provisions for liabilities and charges 94,192 67,833
Other creditors 30,047 5,673
Long term debt 884,996 773,934
Total other liabilities 1,009,235 847,440
Shareholders' funds - equity
Called - up share capital 9,643 9,588
Share premium account 560,406 553,512
Profit and loss account 885,239 678,628
Shareholders' funds - equity 1,455,288 1,241,728
Total liabilities and
shareholders' funds 2,938,998 2,466,707
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statements in
accordance with UK and Irish GAAP (unaudited)
Year ended Year ended
March 31, March 31,
2004 2003
€'000 €'000
Net cash inflow from operating activities 462,063 351,003
Returns on investments and servicing
of finance (20,313) 608
Taxation (2,056) (3,410)
Capital expenditure (including aircraft deposits) (331,599) (469,847)
Acquisitions and disposals (32,697) -
Net cash inflow/(outflow) before
financing
and management of liquid resources 75,398 (121,646)
Financing 122,705 286,778
(Increase) in liquid resources (249,220) (166,329)
(Decrease) in cash (51,117) (1,197)
Analysis of movement in liquid resources 982,352 816,023
At beginning of year
Increase in year 249,220 166,329
At end of year 1,231,572 982,352
Analysis of movement in cash
At beginning of year 76,550 77,747
Net cash (outflow) during year (51,117) (1,197)
At end of year 25,433 76,550
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 loss
shares account account Total
€'000 €'000 €'000 €'000
Balance at April 1, 2003 9,588 553,512 678,628 1,241,728
Issue of ordinary equity shares 55 6,894 - 6,949
Profit for the year - - 206,611 206,611
Balance at March 31, 2004 9,643 560,406 885,239 1,455,288
Reconciliation of adjusted earnings per share (unaudited)
Year Year
ended ended
March 31, March 31,
2004 2003
€'000 €'000
Profit for the year under UK and Irish GAAP 206,611 239,398
Adjustments
Aircraft retirement -Depreciation 3,261 -
costs
-Lease costs 13,291 -
16,552 -
Buzz re-organisation costs 3,012 -
Amortisation of goodwill 2,342 -
Taxation adjustment for
above (1,967) -
Adjusted profit under UK
and Irish GAAP 226,550 239,398
Number of ordinary shares (in 000's)
-Basic 757,447 755,055
-Diluted 765,131 766,279
Adjusted earnings per ordinary share
-Basic (€ cent) 29.91 31.71
-Diluted (€ cent) 29.61 31.24
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
with US GAAP (unaudited)
Year Year
ended ended
March 31, March 31,
2004 2003
€'000 €'000
Operating Revenues
Scheduled revenues 924,566 731,951
Ancillary revenues 149,658 110,557
Total operating revenues-continuing operations 1,074,224 842,508
Operating expenses
Staff costs 123,535 91,907
Depreciation and amortisation 98,130 76,865
Other operating expenses
Fuel & Oil 174,991 128,842
Maintenance, materials and 43,420 29,709
repairs
Marketing and distribution 16,141 14,623
costs
Aircraft rentals 11,541 -
Route charges 110,271 68,406
Airport and Handling 147,221 107,994
charges
Other 77,946 59,434
Total operating expenses 803,196 577,780
Operating profit before non-recurring items 271,028 264,728
Aircraft retirement costs (16,552) -
Buzz re-organisation costs (3,012) -
Operating profit after non-recurring items 251,464 264,728
Other income/(expenses)
Foreign exchange gains/(losses) 3,217 (3,561)
(Loss) on disposal of fixed assets (9) (29)
Interest receivable and similar income 23,891 31,363
Interest payable and similar charges (40,351) (25,624)
Total other income/(expenses) (13,252) 2,149
Profit on ordinary activities
before taxation 238,212 266,877
Tax on profit on ordinary activities (22,782) (25,067)
Net income 215,430 241,810
Net income per ADS
-Basic (Euro cent) 142.21 160.13
-Diluted (Euro cent) 140.78 157.78
Adjusted Net Income per ADS *
-Basic (Euro cent) 153.82 160.13
-Diluted (Euro cent) 152.28 157.78
Weighted Average number of shares
-Basic 757,447 755,055
-Diluted 765,131 766,279
* Calculated on Net Income before non-recurring items (net of tax).
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
Year ended
March 31, March 31,
2004 2003
€'000 €'000
Profit as reported in the consolidated
profit and loss accounts in accordance with UK
and Irish GAAP 206,611 239,398
Adjustments
Pension 89 697
Derivative financial instruments
(net of tax) - (4,189)
Amortisation of goodwill 2,342 -
Employment grants - 469
Capitalised interest re aircraft
acquisition programme 7,213 5,262
Darley Investments Limited 88 88
Taxation - effect of above adjustments (913) 85
Net income under US GAAP 215,430 241,810
(B) Consolidated Cashflow Statements in
accordance
with US GAAP
Year ended
March 31, March 31,
2004 2003
€'000 €'000
Cashflow from operating activities 439,694 348,200
Cash (outflow) from investing activities (354,299) (575,806)
Cash inflow from financial activities 121,734 282,590
Increase in cash and cash equivalents 207,129 54,984
Cash and cash equivalents at beginning of year 537,476 482,492
Cash and cash equivalents at end of year 744,605 537,476
Cash and cash equivalents under US GAAP 744,605 537,476
Restricted cash 200,000 120,890
Deposits with a maturity of between
three and six months 312,745 401,852
Cash and liquid resources under UK and Irish GAAP 1,257,350 1,060,218
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between UK,
Irish and US generally accepted accounting principles(unaudited)
(C) Shareholders' funds - equity
March 31, March 31,
2004 2003
€'000 €'000
Shareholders' equity as reported in the
consolidated balance
sheets (UK and Irish GAAP) 1,455,288 1,241,728
Adjustments:
Pension 3,200 3,111
Goodwill 2,342 -
Capitalised interest re
aircraft acquisition
programme 17,502 10,289
Darley Investments Limited (151) (239)
Minimum pension liability
(net of tax) (2,631) (2,656)
Derivative financial
instruments (net of tax) (116,681) (73,371)
Tax effect of adjustments (2,588) (1,675)
Shareholders' equity as
adjusted to accord with US
GAAP 1,356,281 1,177,187
Opening shareholders'
equity under US GAAP 1,177,187 1,019,607
Comprehensive Income
adjustments
Unrealised Pension surplus
/ (deficit) (net of tax) 25 (2,656)
Unrealised (losses) on
derivative financial
instruments (net of tax) (43,310) (81,630)
(43,285) (84,286)
Net income in accordance
with US GAAP 215,430 241,810
Stock issued for cash 6,949 56
Closing shareholders'
equity under US GAAP 1,356,281 1,177,187
Ryanair Holdings plc
Management Discussion and Analysis of Results
Introduction
For the purposes of the MD&A all figures and comments are by reference to the
adjusted profit and loss account excluding the non-recurring costs, and goodwill
referred to below.
Non-recurring costs consisted of re-organisation costs of €2.7(net of tax),
additional depreciation charge of €3.3m relating to an adjustment to the
residual value of six Boeing 737-200 aircraft that were retired earlier than
planned (see Note 4), which in turn gave rise to lease costs of €11.6m(net of
tax). Goodwill of €2.3m arising from the 'Buzz' acquisition was amortised during
the period. Total non-recurring costs and goodwill amounted to €19.9m (net of
tax).
The adjusted Net Profit for the fourth quarter amounted to €3.5m reflecting a
22% reduction in average fares.
Summary - Year ended March 31, 2004
Profit after tax has decreased by 5% to €226.6m, compared to €239.4m in the
previous year driven by continued strong growth in passenger volumes and tight
cost control, offset by fares, which were on average 14% lower. Operating
margins for the year also decreased by 6 points to 25%, however despite this
reduction Operating profit increased by 3% to €270.9m compared to year ended
March 31, 2003.
Total operating revenues for the year grew by 28% to €1,074.2m whilst passenger
volumes increased by 47% to 23.1m.
Scheduled passenger revenues increased by 26% to €924.6m due to strong passenger
growth, offset by a 14% decline in average fares during the year to €39.97.
Passenger volumes increased due to the launch of new routes and bases, increased
capacity on our existing routes and the acquisition of Buzz during April 2003.
Passenger load factors decreased, as expected by 4 percentage points from 85% to
81%.
Ancillary revenue increased by 35% to €149.7m and reflects strong growth in
non-flight scheduled revenue, car hire and hotel revenue, offset, by the
cessation of the charter programme as Ryanair replaced charter capacity with
scheduled services. Ancillary revenues were also negatively impacted by the
strength of the euro currency versus sterling, as 65% of ancillary revenues are
denominated in sterling. Ancillary revenue, excluding charters increased by 52%,
higher than the growth in passenger numbers, and accounted for 14% of total
revenues compared to 13% in fiscal '03.
Total operating expenses increased by 39% to €803.4m due to the increased level
of activity, and the increased costs, primarily fuel, route charges and airport
& handling costs associated with the growth of the airline. Costs increased at a
lower rate than the growth in passenger numbers principally reflecting the
increased operational efficiencies arising from the higher proportion of 737-800
aircraft operated. However costs have increased at a faster rate than the growth
in revenues due to the decline in fares as described above.
Other income/expenses declined significantly by €21.5m due to the combination of
lower deposit interest rates, and higher interest payable arising from the
increased level of debt during the year.
Net Profit margins have as a result of above declined from 28% to 21% whilst Net
Profit decreased by 5% to €226.6m.
Adjusted earnings per share has decreased by 6% to 29.91 euro cent.
Balance Sheet
Cash and Liquid Resources have increased from €1,060.2m at March 31, 2003 to
€1,257.4m at March 31, 2004, reflecting the increased cash flows from the
profitable trading performance during the year offset by expenditure in respect
of the aircraft acquisition programme. Eighteen additional aircraft were
delivered, nine in the last quarter. Ten aircraft were financed under operating
lease agreements and the remaining eight aircraft were financed via debt.
Aircraft purchases in addition to aircraft deposits accounted for the bulk of
the €331.6m incurred in capital expenditure. This was part funded by the draw
down of long term debt in relation to eight aircraft, which increased, net of
repayments, by €115.8m during the year. Shareholders' Funds at March 31, 2004
have increased to €1,455.3m, compared to €1,241.7m at March 31, 2003.
Detailed Discussion and Analysis - Year ended March 31, 2004
Profit after tax has decreased by 5% to €226.6m driven by strong growth in
passenger volumes and continued tight cost control, offset by a 14% reduction in
average fares. Net margins as a result have decreased by 7 points to 21% from
28% in the comparative period.
Total operating revenues increased by 28% to €1,074.2m whilst passenger volumes
increased by 47% to 23.1m.
Scheduled passenger revenues increased by 26% to €924.6m primarily due to
increased passenger numbers on new and existing routes, offset by a 14%
reduction in average fares. The reduction in average fares was most pronounced
in quarter 4 during which they fell 22%. The weakness of the sterling exchange
rate to the euro accounted for 4% of the 14% decline in average fares.
Ancillary revenues increased by 35% to €149.7m. Non Charter revenues (the
charter programme ceased in quarter 4 last year) increased by 52% during the
year, and reflects strong performance in non-flight scheduled revenues, car hire
revenues, and internet related revenues. Overall ancillary revenues have
increased to 14% of total revenues compared to 13% last year.
Total operating expenses increased by 39% to €803.4m due to the increased level
of activity, and the increased costs primarily fuel, route charges and airport &
handling costs associated with the growth of the airline. The weakness of
sterling to the euro had a positive impact on operating costs as did the
efficiencies arising from the increased proportion of 737-800 aircraft in
operation.
Staff costs have increased by 33% to €123.6m. This increase reflects a 31%
increase in average employee numbers to 2,288 and the impact of a 3% pay
increase granted during the year offset by savings arising from the stronger
euro to sterling exchange rate. Productivity calculated on the basis of
passengers booked per employee continues to improve, with an increase of 21% to
10,049 passengers being achieved during the year.
Depreciation and amortisation increased by 28% to €98.1m due to an increase in
the number of aircraft owned from 54 to 62 and the amortisation of capitalised
maintenance costs offset by savings arising from the base cost of all 737-200
aircraft now having been fully depreciated. This incorporates a charge of €4.4m
reflecting the reduction in the residual value of fifteen 737-200 aircraft to a
residual value of €0.5m each.
Fuel costs rose by 36% to €175.0m due to a 58% increase in the number of hours
flown, offset by lower US$ cost per gallon, a stronger euro to US$ exchange rate
and an improvement in the fleet fuel burn rate due to a higher proportion of
737-800 aircraft operated.
Maintenance costs increased by 46% to €43.4m reflecting an increase in the size
of the fleet operated, an increase in the number of flight hours, and higher
maintenance charges relating to the 'Buzz' aircraft, offset by maintenance
savings due to improved reliability arising from the higher proportion of
737-800 aircraft operated as a percentage of the total fleet. In addition the
entry into operation of ten aircraft under operating lease has resulted in
provisions for future overhaul costs being recognised in maintenance costs. This
policy is different for aircraft owned by the company when such maintenance
costs are capitalised and amortised.
Marketing and distribution costs increased by 10% to €16.1m due to a higher
spend on the promotion of new routes, and the launch of two new bases at
Barcelona, and Rome in the last quarter.
Aircraft rental costs of €11.5m arose during the year reflecting the lease
rental costs associated with the acquired 'Buzz' aircraft and the lease of 10
737-800 aircraft, 9 of which were delivered during quarter 4.
Route charges increased by 61% to €110.3m due to an increase in the number of
sectors flown, an increase in the average sector length and an increase in the
size of the aircraft operated which incur a higher charge offset by the impact
of a weaker sterling to euro exchange rate.
Airport and handling charges increased by 36% to €147.2m due to an increase in
the number of passengers flown, and the impact of increased airport and handling
charges on some existing routes, offset by lower charges on our new European
routes.
Other expenses increased by 31% to €78.0m, which is less than the growth in
ancillary revenues due to improved margins on some new and existing products,
and cost reductions achieved on other indirect overheads.
Operating profits have increased by 3% to €270.9m during the year despite the
decline in Operating margins to 25% due to the reasons outlined above.
Interest receivable decreased by €7.5m to €23.9m reflecting the strong growth in
cash resources arising from the profitable trading performance, offset by
reductions in deposit interest rates during the year. Interest payable increased
by €16.7m to €47.6m due to the increased level of debt arising from the purchase
of nine 'next' generation 737-800 aircraft.
Foreign exchange gains arose primarily due to the conversion of sterling and US$
bank balances to euro at the year end, plus the conversion of foreign currency
receivable and payable balances.
Taxation has declined by 5% during the year, in line with the decline in pre tax
profits.
The Company's Balance Sheet is benefiting from the continued generation of
profits. Tangible fixed assets increased to €1,576.5m from €1,352.4m principally
as a result of the purchase of eight additional aircraft since March 31, 2003
and the payment of deposits for future deliveries. Advance delivery deposits
amounted to €327.1m at the year-end. The Company generated cash from operating
activities of €450.2m, which funded all advance payments on future deliveries
whilst the balance is reflected in the higher cash and liquid resources figure
of €1,257.4m. Total Debt has increased by a further €115.8m, net of repayments,
since March 31, 2003 to €953.0m. Shareholder's Funds at March 31, 2004 have
increased to €1,455.3m compared to €1,241.7m at March 31, 2003.
Notes to the Financial Statements
1.Accounting Policies
The accounting policies followed in the preparation of the above
preliminary announcement document for the year ended March 31, 2004 are
consistent with those set out in the Annual Report for the year ended
March 31, 2003. The statutory financial statements for the year to March
31, 2004 will be finalised on the basis of the financial information
presented by the directors in this preliminary announcement and,
together with the auditors' report thereon, will be delivered to the
Register of Companies following the group's annual general meeting.
2.Approval of the Preliminary Announcement
The Board of Directors approved this preliminary announcement document,
which will form the basis of the groups consolidated financial
statements for the year ended March 31, 2004, on May 27, 2004.
3.Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the Year ended
March 31, 2004 are based on the results reported under Irish and UK
GAAP.
4.Aircraft retirement costs
Six aircraft (five in Q2, one in Q3) were retired earlier than expected
due to the detection during the period of scratch marks ('scribing')
that occurred during an aircraft painting programme on these aircraft in
1995. It has been determined that the cost of repairing these aircraft
is uneconomic due to the short remaining life of the aircraft.
Accordingly the Company has determined that the residual value of US$1m
(€794k) for these aircraft is excessive and as a result has reduced it
to €250k per aircraft. The cost of this adjustment has been reflected in
the results for Quarter 2 and 3.
As a result of these early retirements the Company has been obliged to
lease in seat capacity during the period to enable it to continue its
normal flight schedule. The charge in the year of €13.3m is reflected in
Aircraft retirement costs. As planned the Company has terminated these
rentals prior to March 31, 2004.
This information is provided by RNS
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