Final Results
Ryanair Holdings PLC
03 June 2003
RYANAIR ANNOUNCES ONE MILLION SEAT SALE TO CELEBRATE RECORD ANNUAL RESULTS.
TRAFFIC GROWS 42%, PROFITS RISE BY 59%
Ryanair, Europe's No.1 low fares airline today (3 June'03) announced record
traffic and profit growth for the year (end 31 Mar'03). Passenger traffic
for the year grew by 42% to 15.7m as average load factors increased from 81%
to 84%, primarily due to a 6% reduction in average fares. This reduction in
yields was a result of continuing price promotions, the launch of over 20
new routes, a new base in Milan-Bergamo, and Ryanair's commitment to offer
the lowest fares in every market it serves. Total revenues in the year rose
by 35%, however operating costs rose at a slower rate by 26%. As a result
Ryanair's after tax margins increased exceptionally from 24% to 28%, and Net
Profit increased by 59% to €239.4m.
Summary Table of Results (Irish GAAP) - in Euro
Year ended Mar 31, Mar 31, %
2002 2003 Increase
Passengers 11.09m 15.74m + 42%
Revenue €624.1m €842.5m + 35%
Profit after tax €150.4m €239.4m + 59%
Basic EPS (Euro 20.64 31.71 + 54%
Cents)
Announcing these results, Ryanair's Chief Executive, Michael O'Leary said in
London today;
'These results demonstrate how robust Ryanair's lowest fares business
model is in Europe. Our fares are much lower than any other EU airline
and our outstanding team of 1,900 people remain committed to
relentlessly driving down air fares. As our people now form one of our
largest shareholder blocks, I am delighted that their efforts are being
rewarded, not just with higher pay and rapid promotion, but also with
increasingly valuable share options. We will continue to lower costs and
we will use these low costs and record profit margins to drive down
fares even faster and stimulate rapid growth.
'Ryanair has - for the fifteenth year in a row - delivered increased
profits, despite a 6% reduction in average fares, at a time when most of
our competitors are reducing capacity and announcing losses. The market
has suffered from high fuel prices, the war in Iraq, the impact of SARS
and the continuing effect of the economic downturn in many European
countries. Despite these difficult conditions Ryanair's continued
profitability stems from the fact that we have the lowest costs and the
lowest air fares which no other European airline can match. I can think
of no better way to prove our determination to lower air fares than to
announce a record low fare seat sale. So this morning we released one
million low fare seats at £19.99 and £29.99 one way for travel during
the peak Summer months of June, July and August. Passengers should book
these immediately at www.RYANAIR..COM because these record low prices,
for peak Summer flights will be snapped up in record time.
'Shareholders should be aware that these results for the past 12 months
have been exceptional. We have repeatedly stated that profit margins of
almost 30% are a one off and non-sustainable. Our business plan remains
(a) to grow traffic on average by 25% per annum and (b) maintain a
profit (after tax) margin of approximately 20%. Obviously some years we
will fall below these averages and some years - such as above - we will
exceed them.
'In recent months we have launched two new bases (Milan Bergamo and
Stockholm Skavsta) and 12 former Buzz services among a total of 50 new
routes. These new routes will generate abnormal traffic growth of 50%
for the coming year. We will drive down fares (by more than our normal
5% target) and at this stage expect yields for the year to decline by at
least 10% and possibly more depending on the extent to which Sterling
weakens against the Euro. This is great news for our customers but bad
news for competitors (many of whom are hoping that their fares will
rise). With the launch of 50 new routes out of a total network of 125
load factors will also decline this year to about 80%. Our margins will
also be diluted by the closure and relaunch of the Buzz operation (which
was grounded for the entire month of April) and the negative impact of
operating expensive BAe146 aircraft on certain routes which will be
replaced by larger and lower cost Boeing 737-800's next year.
'The last quarter of the year was also notable for a significant
increase in our aircraft order with Boeing which was increased, at lower
prices to 125 firm and 125 option aircraft. This is the largest ever
order by any European airline for narrowbody aircraft. Ryanair intends
to continue with the single aircraft fleet model which was pioneered by
Southwest and which has proven so profitable for us over the past
fifteen years. These aircraft give us the capacity to continue to grow
(after this year) at about 25% per annum by opening up new bases and new
routes from existing bases.
'With up to 40 new airports and 9 potential new bases presently under
negotiation we have more growth opportunities than we need for the next
five years. We will continue to grow in a safe and controlled manner,
and within the next three years we plan to carry more than 30 million
international scheduled passengers per annum at which point we will
overtake both Lufthansa and British Airways to become the largest
international scheduled airline in the world. The fact that the largest
international airline in Europe will also be the one offering the lowest
fares and the best customer service (we are presently ranked No.1 in
Europe for on-times, completions and fewest lost bags) is good news for
European consumers and bad news for our higher fare competitors.
'It is depressing - yet again - to record that Ireland continues to be
the only country in Europe to miss out on this extraordinary traffic and
tourism growth. We are still waiting for the Irish Government to stop
talking about competition and start doing something about it. The
development of competing terminals and the splitting up of the Aer
Rianta monopoly has received further support from the Government
appointed Committee of 'Wisemen', the Irish Hotels Federation, Aer
Lingus - the Irish State airline - and the Government's own tourism
review group. At a time when the Irish Prime Minister has recently
called for greater competitiveness in every area of Irish life, one
would think that he would at least set an example by breaking up his own
airport monopoly and we again call on him to get on with it. It's time
for less talk and more action from this Government if the Irish tourism
industry is to be rescued.
'Our business in the current quarter continues to grow very strongly. As
we announced this morning, traffic for the month of May - with the
inclusion for the first month of the former Buzz routes - was 53%
greater than May last year. We have driven down yields by 15% during the
month, of which 5% points is due to the weakness in Sterling against the
Euro. I personally expect no near term improvement in either the low
fare environment or the strength of the Euro, and believe therefore that
yields for the year will continue to be 10% to 15% lower than last year.
However this negative revenue effect (of weaker Sterling) will be
partially compensated by lower Sterling costs. In addition the strength
of the Euro against the Dollar will substantially lower costs of
aircraft acquisitions, fuel and spares over the coming years.
'Looking forward we remain confident of another successful year for
Ryanair during which we will deliver substantial traffic growth. Even
though we will drive down fares and yields we expect to maintain our
normal profit margins of just over 20% and record our sixteenth
consecutive year with a material increase in profits.
ENDS 3rd June 2003
For results and further information Howard Millar Pauline McAlester
please contact: Ryanair Holdings Plc Murray Consultants
www.Ryanair.com Tel: 353-1-8121212 Tel: 353-1-4980300
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 125 low fare routes
across 16 countries. Ryanair operates a fleet of 67 aircraft, with firm
orders for up to a further 89 new Boeing 737-800's which will be delivered
over the next 8 years. Ryanair currently employs a team of 1,900 people and
expects to carry approximately 24 million scheduled passengers in the
current year.
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
with UK and Irish GAAP
Year Year
ended ended
March 31, March 31,
2003 2002
€'000 €'000
---------- ----------
Operating Revenues
Scheduled revenues 731,951 550,991
Ancillary revenues 110,557 73,059
---------- ---------
Total operating revenues
-continuing operations 842,508 624,050
Operating expenses
Staff costs 93,073 78,240
Depreciation and amortisation 76,865 59,010
Other operating expenses
Fuel & Oil 128,842 103,918
Maintenance, materials and repairs 29,709 26,373
Marketing and distribution costs 14,623 12,356
Aircraft rentals - 4,021
Route charges 68,406 46,701
Airport and Handling 107,994 84,897
charges
Other 59,522 45,601
---------- ---------
Total operating expenses 579,034 461,117
---------- ---------
Operating profit - continuing operations 263,474 162,933
Other income/(expenses)
Foreign exchange gains 628 975
(Loss)/gain on disposal of fixed assets (29) 527
Interest receivable and similar income 31,363 27,548
Interest payable and similar charges (30,886) (19,609)
---------- ---------
Total other income/(expenses) 1,076 9,441
---------- ---------
Profit on ordinary activities
before taxation 264,550 172,374
Tax on profit on ordinary activities (25,152) (21,999)
---------- ---------
Profit for the period 239,398 150,375
========== =========
Earnings per ordinary share
-Basic(Euro cent) 31.71 20.64
-Diluted(Euro cent) 31.24 20.32
Number of ordinary shares(in 000's)
-Basic 755,055 728,726
-Diluted 766,279 739,961
Page 1
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheets in accordance with
UK and Irish GAAP
March 31, March 31,
2003 2002
€'000 €'000
--------- ---------
Fixed assets
Tangible assets 1,352,361 951,806
--------- ---------
Current Assets
Cash and liquid resources 1,060,218 899,275
Accounts receivable 14,970 10,331
Other assets 16,370 11,035
Inventories 22,788 17,125
--------- ---------
Total current assets 1,114,346 937,766
--------- ---------
Total assets 2,466,707 1,889,572
========= =========
Current liabilities
Accounts payable 61,604 46,779
Accrued expenses and other liabilities 251,328 217,108
Current maturities of long term debt 63,291 38,800
Short term borrowings 1,316 5,505
--------- ---------
Total current liabilities 377,539 308,192
--------- ---------
Other liabilities
Provisions for liabilities and charges 67,833 49,317
Accounts payable due after one year 5,673 18,086
Long term debt 773,934 511,703
--------- ---------
847,440 579,106
--------- ---------
Shareholders' funds - equity
Called - up share capital 9,588 9,587
Share premium account 553,512 553,457
Profit and loss account 678,628 439,230
--------- ---------
Shareholders' funds - equity 1,241,728 1,002,274
--------- ---------
Total liabilities and shareholders' funds 2,466,707 1,889,572
========= =========
Page 2
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statements in accordance
with UK and Irish GAAP
Year Year
ended ended
March 31, March 31,
2003 2002
€'000 €'000
--------- ---------
Net cash inflow from operating activities 351,003 309,109
Returns on investments and servicing of 608 10,360
finance
Taxation (3,411) (5,071)
Capital expenditure(including aircraft (469,847) (372,024)
deposits) --------- ---------
Net cash (outflow) before financing
and management of liquid resources (121,647) (57,626)
Financing 286,779 329,754
(Increase) in liquid resources (166,329) (251,241)
--------- ---------
(Decrease)/increase in cash (1,197) 20,887
========== =========
Analysis of movement in liquid resources
At beginning of year 816,023 564,782
Increase in year 166,329 251,241
--------- ---------
At end of year 982,352 816,023
========= =========
Analysis of movement in cash
At beginning of year 77,747 56,860
Net cash (outflow)/inflow (1,197) 20,887
--------- ---------
At end of year 76,550 77,747
========= =========
Page 3
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 loss
shares account account Total
€'000 €'000 €'000 €'000
------- ------- -------- ---------
Balance at April 1, 9,587 553,457 439,230 1,002,274
2002
Issue of ordinary equity 1 55 - 56
shares
Profit for the financial - - 239,398 239,398
year ------- ------- ------- ---------
Balance at March 31, 2003 9,588 553,512 678,628 1,241,728
======= ======= ======= =========
Page 4
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
with US GAAP
Year Year
ended ended
March 31, March 31,
2003 2002
€'000 €'000
--------- ---------
Operating Revenues
Scheduled revenues 731,951 550,991
Ancillary revenues 110,557 73,059
--------- ---------
Total operating revenues
-continuing operations 842,508 624,050
Operating expenses
Staff costs 91,907 77,025
Depreciation and amortisation 76,865 59,010
Other operating expenses
Fuel & Oil 128,842 103,918
Maintenance, materials and 29,709 26,373
repairs
Marketing and distribution 14,623 12,356
costs
Aircraft rentals - 4,021
Route charges 68,406 46,701
Airport and Handling 107,994 84,897
charges
Other 59,434 45,513
--------- ---------
Total operating expenses 577,780 459,814
--------- ---------
Operating profit - continuing 264,728 164,236
operations
Other income/(expenses)
Foreign exchange (losses)/gains (3,561) 975
(Loss)/gain on disposal of fixed (29) 527
assets
Interest receivable and similar 31,363 27,548
income
Interest payable and similar charges (25,624) (14,582)
--------- ---------
Total other income/(expenses) 2,149 14,468
--------- ---------
Profit on ordinary activities
before taxation 266,877 178,704
Tax on profit on ordinary activities (25,067) (23,155)
--------- ---------
Net Income 241,810 155,549
========= =========
Net Income per ADS
-Basic(Euro cent) 160.13 106.73
-Diluted(Euro cent) 157.78 105.11
Weighted Average number of shares
-Basic 755,055 728,726
-Diluted 766,279 739,961
Page 5
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between UK, Irish and US generally
accepted accounting principles
(A) Net income under US GAAP
<--------Year ended--------->
March 31, March 31,
2003 2002
€'000 €'000
--------- ---------
Profit as reported in the consolidated
profit and loss accounts in accordance
with UK and Irish GAAP 239,398 150,375
Adjustments
Pension 697 751
Derivative financial instruments(net of (4,189) -
tax)
Employment grants 469 464
Capitalised interest re aircraft 5,262 5,027
acquisition programme
Darley Investments Limited 88 88
Tax effect of adjustments 85 (1,156)
--------- ---------
Net income under US GAAP 241,810 155,549
========= =========
(B) Consolidated Cashflow Statements in
accordance with US GAAP
<--------Year ended--------->
March 31, March 31,
2003 2002
€'000 €'000
--------- ---------
Cash inflow from operating activities 348,200 314,398
Cash (outflow) from investing (454,916) (551,146)
activities
Cash inflow from financial activities 282,590 330,181
--------- ---------
Increase in cash and cash equivalents 175,874 93,433
Cash and cash equivalents at beginning 482,492 389,059
of year --------- ---------
Cash and cash equivalents at end of
year 658,366 482,492
========= =========
Cash and cash equivalents under US 658,366 482,492
GAAP
Deposits with a maturity of between 401,852 416,783
three and six months --------- ---------
Cash and liquid resources under UK and 1,060,218 899,275
Irish GAAP ========= =========
Page 6
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between
UK, Irish and US generally accepted
accounting principles
(C) Shareholders' funds - equity
March 31, March 31,
2003 2002
€'000 €'000
--------- ---------
Shareholders' equity as reported in the
consolidated balance
sheets (UK and Irish GAAP) 1,241,728 1,002,274
Adjustments:
Pension 3,111 2,414
Employment grants - (469)
Capitalised interest re aircraft acquisition 10,289 5,027
programme
Darley Investments Limited (239) (327)
Unrealised Pension deficit(net of tax) (2,656) -
Derivative financial instruments(net of tax) (73,371) 12,448
Tax effect of adjustments (1,675) (1,760)
--------- ---------
Shareholders' equity as adjusted to accord 1,177,187 1,019,607
with US GAAP ========= =========
Opening shareholders' equity under US GAAP 1,019,607 674,386
Comprehensive Income adjustments
Investments - (588)
Unrealised Pension deficit(net of tax) (2,656) -
Unrealised (losses)/gains on derivative (81,630) 8,259
financial instruments(net of tax) --------- ---------
(84,286) 7,671
Net income in accordance with US GAAP 241,810 155,549
Stock issued for cash 56 182,001
--------- ---------
Closing shareholders' equity under US GAAP 1,177,187 1,019,607
========= =========
Page 7
Ryanair Holdings plc
Management Discussion and Analysis of Results
Summary - Year ended March 31, 2003
Profit after tax has increased by 59% to €239.4m, compared to €150.4m in the
previous year ended March 31, 2002 driven by continued strong growth in
passenger volumes and tight cost control. Operating margins have increased by 5
points to 31% which has resulted in Operating Profit increasing by €100.5m to
€263.5m compared to year ended March 31, 2002.
Total Operating Revenues grew by 35% to €842.5m whilst passengers numbers have
increased by 42% to 15.7m.
Scheduled Passenger revenues increased by 33% to €732.0m due to strong passenger
volume growth, offset by a 6% decline in average fares during the period.
Passenger volumes increased due to the launch of new routes and bases, and
increased capacity on our existing routes.
Ancillary Revenue grew by 51% to €110.6m, which is higher than the growth in
passenger volumes and reflects very strong growth in non-flight scheduled
revenue, car hire, and on-board sales, whilst Charter income declined due to a
reduction in the level of seat capacity allocated.
Total Operating Expenses increased by 26% to €579.0m due to the increased level
of activity, and the increased costs, primarily fuel, depreciation, route
charges and airport & handling costs associated with the growth of the airline.
Operating costs continue to be positively impacted by the higher proportion of
the 737-800's of the total fleet.
Net margins have as a result of above increased from 24% to 28% whilst Net
Profit increased by 59% to €239.4m.
Earnings per share has increased by 54% to 31.71 euro cent, which is lower than
the growth in net profit due to an increase in the number of shares in issue
post the share offering in February 2002.
Balance Sheet
Cash and Liquid Resources have increased from €899.3m at March 31, 2002 to
€1,060.2m at March 31, 2003, reflecting the increased cash flows from the
profitable trading performance during the period offset by expenditure in
respect of the aircraft acquisition programme. Thirteen additional aircraft were
delivered, five in the last quarter, which in addition to aircraft deposits
accounted for the bulk of the €469.8m incurred in capital expenditure. This was
part funded by the draw down of long term debt which increased, net of
repayments, by €286.8m during the period. Shareholders' Funds at March 31, 2003
have increased to €1,241.7m, compared to €1,002.3m at March 31, 2002.
Detailed Discussion and Analysis - Year ended March 31, 2003
Profit after tax has increased by 59% to €239.4m driven by strong growth in
passenger volumes and continued tight cost control and as a result Net margins
have increased by 4 points to 28% from 24% in the comparative period.
Total Operating Revenues increased by 35% to €842.5m whilst passenger volumes
increased by 42% to 15.7m.
Scheduled Passenger Revenues increased by 33% to €732.0m primarily due to
increased passenger numbers on new and existing routes, partly offset by a 6%
decline in average fares.
Ancillary Revenues increased by 51% to €110.6m, which is higher than the growth
in passenger volumes, and reflects increases in non-flight scheduled revenues,
car hire revenues, and other ancillary product revenues, offset by a reduction
in Charter revenues due to the continued focus on the scheduled operation.
Charter capacity has been transferred to scheduled services with the Company now
offering flights to destinations previously served by Charters. Overall
ancillary revenues have increased to 13% of total revenues compared to 12% last
year.
Total Operating Expenses increased by 26% to €579.0m due to the increased level
of activity, and the increased costs primarily staff, depreciation, fuel, route
charges and airport & handling costs associated with the growth of the airline.
Staff costs have increased by 19% to €93.1m. This increase reflects a 13%
increase in average employee numbers to 1,746. Pilots, who earn higher than the
average salary, accounted for 47% of the increase in employment. The increase in
the level of activity has also resulted in an increase in the level of
productivity-based pay for both pilots and Inflight crew. Staff costs also rose
due to the impact of pay increases granted which were between 3% and 5%.
Depreciation and Amortisation increased by 30% to €76.9m due to an increase in
the number of aircraft owned from 41 to 54 and the amortisation of capitalised
maintenance costs offset by savings due to the base cost of all 737-200 aircraft
now having been fully depreciated.
Fuel costs rose by 24% to €128.8m due to a 33% increase in the number of hours
flown, offset by a lower average US$ cost per gallon of fuel and an improvement
in the fuel burn rate due to a higher proportion of 737-800 aircraft operated.
Maintenance costs increased by 13% to €29.7m reflecting an increase in the size
of the fleet operated, and an increase in the number of flight hours offset by
savings due to improved reliability arising from the higher proportion of
737-800 aircraft as a percentage of the total fleet, and a reduction in the
level of unscheduled engine maintenance that arose during the year.
Marketing and Distribution Costs increased by 18% to €14.6m due to a higher
spend on the promotion of new routes, the launch of Frankfurt-Hahn earlier in
the year and the opening of an additional two bases at Milan-Bergamo and
Stockholm-Skavsta this Spring.
Aircraft Rental Costs did not arise during the period reflecting the reduced
requirement to rent additional seat capacity arising from the delivery of the
new 737-800 aircraft.
Route Charges increased by 46% to €68.4m due to an increase in the number of
sectors flown, an increase in the size of aircraft operated which incur a higher
charge, an increase in the average sector length and an increase in the basic
unit cost in some countries.
Airport and Handling Charges increased by 27% to €108.0m 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 and at our new bases.
Other Expenses increased by 31% to €59.5m, 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 costs.
Operating margins have increased to 31% due to the reasons outlined above and
this has resulted in Operating Profits increasing by 62% to €263.5m during the
period.
Interest Receivable increased by €3.8m to €31.4m reflecting the strong growth in
cash resources arising from the profitable trading performance, offset by
reductions in deposit rates during the period. Interest Payable increased by
€11.3m to €30.9m due to the increased level of debt arising from the acquisition
of 13 new aircraft.
Foreign exchange gains arose primarily due to the conversion of sterling bank
balances to euro at the period end, plus the conversion of foreign currency
receivable and payable balances.
Taxation has increased by 14% during the period, less than the growth in pre-tax
profits and primarily reflects the continued decline in the headline rate of
Corporation Tax in Ireland.
The Company's Balance Sheet continues to benefit from the strong growth in
profits. Tangible fixed assets increased to €1,352.4m from €951.8m principally
as a result of the delivery of thirteen additional aircraft since March 31, 2002
and the payment of deposits for future deliveries. Advance delivery deposits
amounted to €257.3m at the year-end. The Company generated cash from operating
activities of €351.0m, which funded all advance payments on future deliveries
whilst the balance is reflected in the higher cash and liquid resources figure
of €1,060.2m. Total Debt has increased by a further €286.7m, net of repayments,
since March 31, 2002 to €837.2m. Shareholder's Funds at March 31, 2003 have
increased to €1,241.7m compared to €1,002.3m at March 31, 2002.
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, 2003 are
consistent with those set out in the Annual Report for the year ended
March 31, 2002.
2. Approval of the Financial Statements
The Board of Directors approved the consolidated financial statements
for the Year ended March 31, 2003 on May 29, 2003.
3. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the Quarter and
Year ended March 31, 2003 are based on the results reported under Irish
and UK GAAP.
Nationality Declaration
The Company has undertaken to notify the shareholders periodically of
the percentage of Ordinary shares held by EU Nationals. Accordingly, on
March 31, 2003 EU Nationals held not less than 52.02% of the ordinary
shares.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 22nd November 2024
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