Final Results

Ryanair Holdings PLC 20 June 2000 RYANAIR ANNOUNCES RECORD ANNUAL RESULTS Ryanair Holdings Plc today (20th June 2000) announced record financial results for the year ended March 31, 2000. Total revenues grew by 25% to EUR370.1m, reflecting a 13% increase in passenger volumes to 5.6m, an increase in average yields due to a longer sector length, and the increased strength of Sterling to the Euro. Operating expenses increased by 26% which, as expected, was fractionally ahead of revenue growth reflecting the increased costs (primarily staff and, airport and handling costs) associated with the growth of the airline, and the launch of eight new routes. As a result profits increased by 26% to a new record of EUR72.5m for the year. Summary Table of Results (Irish GAAP) - in Euro's Year Mar 31, 1999 Mar 31, 2000 % Increase Passengers 4.9m 5.6m 13% Revenues EUR295.8m EUR370.1m 25% Profit after tax EUR57.5m EUR72.5m 26% Basic EPS 17.44 cents 21.62 cents 24% Speaking in London today Michael O'Leary, Ryanair's Chief Executive said; 'The past year has been among the most turbulent in recent aviation history, with huge increases in fuel prices, the ending of intra-European duty free, and continuing intense competition throughout Europe. Despite this market turmoil, Ryanair has continued to deliver strong growth in fleet, routes, traffic, and profitability. These results represent our tenth year of rising profits, and again demonstrate the unique strength of Ryanair's Low Fares formula. These results cover a period during which Ryanair purchased the first five new Boeing 737-800 series aircraft and introduced them seamlessly into service. This additional capacity allowed us to increase frequencies on existing routes, whilst opening eight new European routes from London Stansted and Glasgow Prestwick airports. All of these new routes were immediately profitable as customers in Germany, Italy, France, Northern Ireland and Denmark flocked to Ryanair's low, low, air fares. The only dark cloud on our growth horizon remains Ireland, where the Government continues to prioritise the interests of its high cost airport monopoly over the needs of the Irish consumer and potential European visitors. Not surprisingly, total traffic to Dublin from the UK (by far Ireland's biggest market) has stagnated, and, in the first three months of 2000, has actually declined for the first time since the Gulf War in 1991. While Dublin stagnates - Ryanair continues to grow strongly by adding capacity to existing and new routes from Stansted (which is now Europe's fastest growing airport), and which will shortly surpass Dublin in terms of passenger traffic. We remain vigilant in reducing costs and improving our efficiencies wherever possible. Notable among these initiatives over the last year has been the introduction of the 189 seater Boeing 737-800 series aircraft, which has significantly reduced our operating costs per seat. Our policy of hedging, fuel, currency, and interest rate exposures continued to pay substantial dividends last year as we have been insulated from adverse market movements. Even as we announce these results today Ryanair has hedged almost 100% of our fuel needs over the next twelve months, and we are fully protected from interest rate increases in servicing aircraft related debt. Undoubtedly the most significant cost initiative last year was the launch of our www.RYANAIR.COM internet site. The startling success and instant customer acceptance of RYANAIR.COM has enabled us to increase our proportion of direct bookings to almost 70%, reduce travel agents commission to 5%, and finally allow us to eliminate the over priced Galileo CRS system which we will cease using on 31 July next. We are reinvesting these substantial savings in lower air fares and aggressive promotion of our RYANAIR.COM internet site which will in turn assist our growth by developing and enhancing customer loyalty. There are 3 features that make the RYANAIR.COM site different from other internet travel sites and other low fares airlines. Firstly it is both profitable and cash positive. Secondly, because Ryanair has historically sold some 60% of our seats through travel agents, the switching of a large proportion of this traffic to the internet is generating large savings in CRS fees and agent commissions which are not available to other low fares airlines who have never had to bear the high costs of travel agency distribution. Thirdly, RYANAIR.COM has truly unique content - namely the lowest scheduled air fares in Europe - and this unique content is winning many new subscribers, whilst our low fares keeps them coming back. Our customer service indices have improved again last year. Ryanair was for the third year in a row, the most punctual airline on Dublin-London, now Europe's busiest international scheduled route. Our on-time record improved from 74% to 80% of all flights, and our low rate of customer complaints fell even further from 2.5 to 2.3 per thousand passengers, a figure that is some three times better than the very best U.S. airlines. Ryanair continues to grow because we deliver not just the lowest fares in Europe, but do so on some of the newest aircraft in use, with reliable on-time services for both our leisure and business customers. The new financial year has started well and we are pleased with current trading. Already four of our five new aircraft have been delivered, six of our ten new routes have started operating, and advance bookings on these and the remaining four (which start in two weeks time) are strong, but then we would expect no less as we enter the peak Summer period. We have every reason to be confident that our target of 7 million passengers this year can be achieved. We continue to see our growth prospects as strong and these are being enhanced by the rush towards consolidation among Europe's flag carriers which will lead to less competition and put further upward pressure on their already high air fares. Equally the failure to date of the newer low fare start up carriers to demonstrate any record of sustainable profitability underlines the unique strength of the Ryanair low fares formula. As the big airline groups continue to push up air fares, Ryanair will offer competition and low fare travel to more and more European consumers. Lastly, this growth, and these results could not have been delivered without the exceptional team of outstanding people which comprise Ryanair. Ryanair's successful company wide share option scheme continues to reward all of our people as our share price grows in line with the advances being made by Europe's largest, most successful and profitable low fares airline. Ryanair's growth is not just good news for our passengers, but continues to be good news for our people whilst delivering great returns for our shareholders.' 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 30 Boeing 737's, orders for up to a further 36 new 737-800's which will be delivered over the next 4 years. Ryanair currently employs a team of over 1300 people and will fly 7 million passengers in the current year. www.RYANAIR.COM was launched in January 2000 and is already Europe's largest travel website, recording 50,000 bookings per week. As Ryanair's low fares network continues to successfully expand in Europe, the growth in business and bookings at RYANAIR.COM continues to grow exponentially. Ryanair Holdings plc and Subsidiaries Consolidated Profits and Loss Accounts in accordance with UK and Irish GAAP Year Year Ended Ended March March 31 31 2000 1999 EUR'000 EUR'000 Operating Revenues Scheduled revenues 330,571 258,873 Ancillary revenues 39,566 36,886 Total operating revenues continuing operations 370,137 295,759 Operating expenses Staff costs 48,533 39,834 Depreciation and Amortisation 44,052 36,209 Other operating expenses Fuel & Oil 41,676 36,555 Maintenance, materials and 16,886 11,961 repairs Marketing and distribution 32,123 24,602 costs Aircraft rentals 2,097 2,909 Route charges 26,301 20,806 Airport and Handling charges 43,095 29,035 Other 31,319 25,987 Total operating expenses 286,082 227,898 Operating profit-continuing 84,055 67,861 operations Other income/(expenses) Interest receivable and 7,498 6,610 similar income Interest payable and similar charges (3,781) (237) Foreign exchange gains 1,358 389 Gains on disposal of fixed 964 1,187 assets Total other income/(expenses) 6,039 7,949 Profit on ordinary activities before taxation 90,094 75,810 Tax on profit on ordinary (17,576) (18,339) activities Profit for the financial year 72,518 57,471 Earnings per ordinary share* Basic - (Euro cents) 21.62 17.44 Diluted (Euro cents) 21.48 17.38 Number of ordinary shares (in 000's)* Basic 335,478 329,520 Diluted 337,681 330,639 * 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 Year Year Ended Ended March 31 March 2000 31 1999 EUR'000 EUR'000 Fixed Assets Tangible assets 315,032 203,493 Financial assets 36 53 Total Fixed Assets 315,068 203,546 Current Assets Cash and liquid 355,248 158,595 resources Accounts receivable 21,974 18,475 Other assets 6,478 6,306 Inventories 13,933 12,917 Total current assets 397,633 196,293 Total assets 712,701 399,839 Current liabilities Accounts payable 22,861 30,764 Accrued expenses and other 107,445 77,972 Liabilities Current maturities of long term debt 9,567 1,765 Short term borrowings 3,780 3,893 Total current liabilities 143,653 114,394 Other liabilities Provisions for liabilities and charges 15,279 11,277 Long Term debt 112,412 23,204 127,691 34,481 Shareholder's funds - equity Called -up share capital 8,892 8,503 Share Premium Account 248,093 130,607 Profit and loss account 184,372 111,854 Shareholder's funds - 441,357 250,964 equity Total liabilities and shareholders' funds 712,701 399,839 Ryanair Holdings plc and Subsidiaries Consolidated Cashflow Statements in Accordance with UK and Irish GAAP Year Year Ended Ended March 31 March 31 2000 1999 EUR'000 EUR'000 Net cash inflow from operating 149,575 124,411 activities Returns on investments and servicing of finance 1,953 6,043 Taxation (15,545) (11,125) Capital expenditure (including aircraft deposits) (154,079) (107,123) Net cash (outflows)/inflow before financing and use of liquid (18,096) 12,206 resources Financing 214,862 79,816 (Increase) in liquid resources (196,110) (79,382) Increase in cash 656 12,640 Analysis of movement in liquid resources Liquid resources at beginning of year 138,039 58,657 Increase in year 196,110 79,382 Liquid resources at end of year 334,149 138,039 Analysis of movement in cash At beginning of year 16,663 4,023 Net cash inflow 656 12,640 Net cash at end of year 17,319 16,663 Ryanair Holdings plc and Subsidiaries Consolidated Statement of Changes in Shareholders' Funds - Equity in accordance with UK and Irish GAAP Share Profit Ordinary Premium and shares account loss Total account EUR'000 EUR'000 EUR'000 EUR'000 Balance at April 1, 8,503 130,607 111,854 250,964 1999 Issue of ordinary equity shares (net of issue costs) 389 117,486 0 117,875 Profit for the year - - 72,518 72,518 ______ ______ Balance at March 31,2000 8,892 248,093 184,372 441,357 Ryanair Holdings plc and Subsidiaries Consolidated Profit and Loss Account in Accordance with US GAAP Year Year Ended Ended March March 31 31 2000 1999 EUR'000 EUR'000 Operating Revenues Scheduled revenues 330,571 258,873 Ancillary revenues 39,566 36,886 Total operating revenues - continuing operations 370,137 295,759 Operating expenses Staff costs 48,890 39,364 Depreciation and Amortisation 41,641 34,531 Other operating expenses Fuel & Oil 41,676 36,555 Maintenance, materials and 16,886 11,961 repairs Marketing and distribution costs 32,123 24,602 Aircraft rentals 2,098 2,909 Route charges 26,301 20,806 Airport and Handling charges 43,094 29,035 Other 31,233 25,901 Total operating expenses 283,915 225,664 Operating profit - continuing 86,222 70,095 operations Other income/(expenses) Interest receivable and similar 7,498 6,610 income Interest payable and similar (3,781) (237) charges Foreign exchange (losses)/gains (2,397) 3,407 Gains on disposal of fixed 964 1,187 assets Total other income/(expenses) 2,284 10,967 Profit on ordinary activities before taxation 88,506 81,062 Tax on profit on ordinary (16,640) (19,291) activities Net income before cumulative effect of accounting change 71,866 61,771 Cumulative effect of accounting change (net of tax of - 23,122 EUR11,067,000) ______ ______ Net income 71,866 84,893 Net income per ADS before notional foreign exchange gains/(losses)and cumulative effect of accounting change (1)(2) - Basic(Euro cents) 111.19 90.57 - Diluted(Euro cents) 110.47 90.26 Net income per ADS before 107.11 93.73 cumulative effect of accounting change (2) -Basic(Euro cents) 107.11 93.73 -Diluted(Euro cents) 106.41 93.41 Net income per ADS (2) -Basic(Euro cents) 107.11 128.81 -Diluted(Euro cents) 106.41 128.38 Weighted Average number of shares (2) -Basic 335,478 329,520 -Diluted 337,681 330,639 (1) The U.S. GAAP Net income is after marking to market forward contracts. The principle component of the notional loss is in relation to Stg:Euro contracts which were entered into by the Company to protect surplus sterling receipts. Under Irish/UK GAAP such notional gains/(losses) are not taken to the profit/(loss) account. (2) 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 Note 1 - Restatement of Comparative Results Generally accepted accounting principles in Ireland and the United Kingdom vary in certain significant respects from generally accepted accounting principles in the United States as described in Note 29 to our consolidated financial statements included in our 1999 Annual Report on Form 20-F. (A) Net Income under US GAAP Year Year Ended Ended March March 31 2000 31 1999 EUR'000 EUR'000 Profit as reported in the consolidated profit and loss accounts and in accordance with UK and Irish GAAP 72,518 57,471 Adjustments Pension 363 116 Unrealised (losses)/gains forward exchange contracts (3,755) 3,018 Employment grants (664) 414 Basis of accounting for August 1996 transaction 1,996 1,238 Basis of accounting for aircraft acquired from 442 442 Northill Limited Darley Investments Limited 86 86 Share option compensation (56) (61) expense Taxation effect of above 936 (952) adjustments Net income as adjusted to accord with US GAAP before cumulative effect of 71,866 61,771 accounting change Cumulative effect of accounting change (net of tax expense of EUR11,067,000) 0 23,122 Net income under US GAAP 71,866 84,893 Ryanair Holdings plc and Subsidiaries Summary of significant differences between UK, Irish and US generally accepted accounting principles (B) Consolidated Cashflow Statements in accordance with US GAAP Year Year Ended Ended March 31 March 31 2000 1999 EUR'000 EUR'000 Cash Inflow from operating activities 135,983 119,330 Cashflow from investing activities (327,006) (158,664) Cashflow from financing activities 214,749 81,671 Increase in cash and cash equivalents 23,726 42,337 Cash and cash equivalents at beginning of year 97,704 55,367 Cash and cash equivalents at end of year 121,430 97,704 Cash and cash equivalents under US GAAP 121,430 97,704 Deposits with a maturity of between three and six months 233,818 60,891 Cash and liquid resources under UK and Irish GAAP 355,248 158,595 March March 31 2000 31 1999 (C) Shareholders' Funds equity EUR'000 EUR'000 Shareholders' equity as reported in the consolidated balance sheets (UK and Irish 441,357 250,964 GAAP) ADJUSTMENTS: Pension 923 560 Unrealised (losses)/gains on (2,614) 1,141 forward exchange contracts Employment grants (1,334) (670) Basis of accounting for August 1996 transactions (1,531) (3,527) Basis of accounting for aircraft acquired from Northill Limited (179) (621) Darley Investments Limited (503) (589) Share Option compensation expense 0 56 Investments 1,988 2,302 Tax effect of adjustments 1,233 297 Shareholder's equity as adjusted to accord with US 439,340 249,913 GAAP Opening sharholder's equity under US GAAP 249,913 102,697 Investments (314) 2,302 Net income in accordance with US GAAP 71,866 61,771 Stock issued for cash 117,875 60,021 Cumulative effect of accounting change 0 23,122 Closing shareholder's equity US GAAP 439,340 249,913 Ryanair Holdings plc Management Discussion and Analysis of Results Summary Year Ended March 31, 2000 Consolidated Profit and Loss Profit after tax has increased by 26% to EUR72.5m, compared to EUR57.5m in the previous year ended March 31, 1999. Total Operating Revenues, grew by 25% toEUR370.1m whilst passenger volumes increased by 13% to 5.6m. Total Operating Expenses increased by 26% to EUR286.1m, due to the increased level of activity, and the increased costs, primarily staff, and airport & handling costs associated with the growth of the airline. Profit Before Tax has increased by 19% to EUR90.1m. The effective Corporation Tax rate for the year was 20% compared to 24% 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 EUR158.6m at March 31, 1999 to EUR355.2m at March 31, 2000, reflecting the increased cash flows from the profitable trading performance, and the receipt of the proceeds of the secondary offering amounting to EUR117.9m in March 2000. During the year the company incurred capital expenditure of EUR155.2m primarily financed by an increase in the level of debt. Shareholder's Funds at March 31, 2000 have increased to EUR441.4m, compared to EUR251m at March 31, 1999. Discussion and Analysis Year Ended March 31, 2000 Profit after tax has increased by 26% to EUR72.5m driven by record passenger numbers, strong yields and tight cost control. Operating margins have remained consistent at 23% resulting in Operating Profit increasing by EUR16.2m to EUR84.1m compared to year ended March 31,1999. Profit before tax increased by 19%, 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 25% to EUR370.1m whilst passenger volumes increased by 13% to 5.6m. Scheduled Passenger Revenues increased by 28% to EUR330.6m due to a combination of increased passenger numbers, an increase in average yields due to the longer sector length, and the positive impact on fares of the strength of Sterling to the Euro. Ancillary Revenues increased by 7% to EUR39.6m 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 26% to EUR286.1m due to the increased level of activity, and the increased costs primarily staff, depreciation and airport costs associated with the growth of the airline. Staff costs have increased by 22% to EUR48.5m. This increase reflects a 15% increase in average employee numbers to 1,262. Pilots, who earn higher than the average salary, accounted for 24% of the increase in employment. Staff costs also rose due to the impact of the 3% pay increases granted, which were ahead of the level set by the national wage agreement. Depreciation and Amortisation increased by 22% to EUR44.1m due to an increase in the average number of aircraft owned from 21 to 26, and the amortisation of capitalised maintenance costs. Fuel costs rose by 14% to EUR41.7m due to a 15% increase in the number of sectors flown, and an increase in the average sector length, offset by a reduction in average cost per gallon of fuel. Maintenance costs increased by 41% to EUR16.9m 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 expansion of our Stansted base. Marketing and Distribution Costs increased by 31% to EUR32.1m due to a combination of an increase in passenger volumes, increased distribution costs, and the marketing costs associated with the launch of eight new routes. Aircraft Rental Costs decreased by EUR0.8m to EUR2.1m due to the delivery of five 737-800 next generation aircraft, and the resultant decline in the need to rent additional seat capacity. Route Charges increased by 26% to EUR26.3m due to an increase in the number sectors flown, and an increase in the average sector length. Airport and Handling Charges increased by 48% to EUR43.1m due to an increase in the number of passengers flown, the impact of increased airport and handling charges on some existing routes, 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 21% to EUR31.3m which was higher than the growth in passenger volumes 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 24% to EUR84.1m due to the reasons outlined above. Interest Receivable increased by 13% to EUR7.5m reflecting the strong growth in cash resources arising from the profitable trading performance during the year. Interest Payable increased by EUR3.5m due to the higher level of debt arising from the acquisition of five new aircraft. Gains on Disposal of EUR1.0m represents the gain arising on the sale of shares in an airline network provider. Taxation declined in the year by EUR0.8m primarily due to the decline 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 receipt of the net proceeds of the secondary offering of EUR117.9m during March 2000. The Company generated cash from operating activities of EUR149.6m which partly funded the acquisition of five 737-800 aircraft and the additional aircraft deposits. Capital expenditure net of acquired debt, increased by EUR58.3m during the year. Shareholder's Funds at March 31,2000 have increased to EUR441.4m compared to EUR251.0 at March 31, 1999. Notes to the Financial Statements 1. Accounting Policies The accounting policies followed in the preparation of these consolidated financial statements for the year ended March 31, 2000 are consistent with those set out in the Annual Report for the year ended March 31, 1999. 2. Approval of the Financial Statements The consolidated financial statements for the Year ended 31 March 2000 were approved by the Board of Directors on June 19th, 2000. 3. Generally Accepted Accounting Policies The Management Discussion and Analysis of Results for the Year ended March 31, 2000 are based on the results reported under Irish and UK GAAP. 4. Year 2000 Compliance The company has successfully completed its Year 2000 programme and the company's information systems continue to operate normally. 5. Nationality Declaration The company has undertaken to notify the shareholders twice yearly of the percentage of Ordinary shareholders held by EU Nationals. Accordingly, on March 31, 2000 not less than 53% of the ordinary shares were held by EU Nationals. 6. Share Split On February 28, 2000 the company implemented a sub-division of the Company's Ordinary Shares of IR4p into Ordinary Shares of IR2p (the 'Stock Split'). Both the share capital and earnings per share figures for prior years have been restated to give effect to the share split.
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