Half Year Results Announced

Ryanair Holdings PLC 05 November 2007 RYANAIR'S HALF YEAR PROFITS RISE 24% TO RECORD €408M RAISES FULL YEAR GUIDANCE TO €470M Ryanair, Europe's largest international airline, today (5 Nov) announced record half year after tax profits of €408m, a 24% increase over last year. Traffic grew by 20% to 26.6m and yields fell by 1% as revenues rose by 24% to €1,554m. Unit costs increased by 5%, mainly due to higher fuel, staff, and airport costs. Despite these higher costs, Ryanair maintained an industry leading after tax margin of 26%. Summary Table of Results (IFRS) - in Euro Half Year Results Sep 30, 2006 Sep 30, 2007 Increase % Passengers 22.1m 26.6m 20% Revenue €1,256m €1,554m 24% Profit after tax €329m €408m 24% Basic EPS (Euro Cents) 21.33 26.61 25% Announcing these results Ryanair's CEO, Michael O'Leary, said: 'These record profits reflect a 20% growth in passenger volumes, a 1% decline in yields, and strong ancillary growth. Ancillary revenues grew by 54% to €252m, due to improved penetration of car hire, hotels, travel insurance, as well as strong onboard sales and excess baggage revenues. Ancillaries now account for just over 16% of total revenues as we make steady progress towards our 20% target. Our inflight mobile phone service will be tested on 25 aircraft before the end of March 2008 which will allow passengers to make and receive calls and texts on their mobile phones and blackberrys. Unit costs rose by 5%, slightly lower than expected, due to the higher oil prices, doubling of airport charges at Stansted as well as significantly higher charges for portacabin facilities at the Dublin airport monopoly. Staff costs rose by 29% to €146.3m due to volume growth, an employee share option charge of €9.1m, and increased cabin crew ratios. We continue to aggressively tackle costs and anticipate that unit costs for the remainder of the year will grow by 5%, slightly lower than previously guided. The UK Competition Commission's investigation of the BAA monopoly clearly confirmed that they are responsible for the abysmal service and long security queues which passengers are suffering at Stansted airport. This report also highlighted the negative impact of the BAA's monopoly ownership of the main London airports which has resulted in excessive charges and retarded their development. We believe that the BAA's abusive monopoly should be broken up, urgently, if the best interests of consumers are to be realised. Competition works - airport monopolies don't. The CAA has repeatedly failed to effectively regulate this monopoly which is why it continues to provide third world service levels, at extortionate prices, especially at Stansted, where users' requirements are repeatedly ignored by an airport which plans to waste £4bn building a gold plated second terminal and runway when these facilities should be provided at less than one quarter of this cost. Our new routes and bases have performed well over the summer. This winter we will open 4 new bases at Alicante and Valencia in Spain, Belfast City in Northern Ireland, and Bristol in the UK. We will also start over 130 new routes across Europe. Advance bookings on our new routes and bases are in line with our winter targets. We intend to announce a further 1 or possibly 2 bases in the coming weeks for launch during next summer's schedule. We have recently concluded direct negotiations and a new four year agreement with our Dublin based pilots which will significantly improve their pay and rosters and bring them in line with the better pay and benefits previously negotiated by pilots at our other Irish bases. Sadly, the failed attempts by the Irish Airline Pilots Union ('IALPA') to interfere in Ryanair's direct negotiations with our pilots has cost each of our Dublin Captains over €80k each over the past 4 years. We are pleased that the Dublin pilots have finally recognised the abject failure of this IALPA led campaign and have returned to talking directly with us. We have now launched our free web check-in/priority boarding facility for all passengers travelling with hand luggage which allows them to avoid airport queues and be amongst the first to board the aircraft. Passengers who do not avail of free web check-in/priority boarding will be charged £2/€3 for using airport check-in. As a further innovation all passengers can now purchase priority boarding online and at airport ticket desks. These service enhancements have been well received by passengers resulting in the doubling of passengers using priority boarding/web check-in in the first month since its introduction. Chancellor Alistair Darling's plans to change the basis of UK APD in 2009 from a per passenger charge to a per flight charge fails to address the fundamental inequity of this travel tax scam. Aviation, which accounts for less than 2% of EU CO2 emissions (just half the figure for marine transport), is not the cause of climate change and taxing it will not have any effect on this problem. Not one penny of the extra £1bn raised annually by this UK travel tax scam has been spent on environmental projects. Despite repeated requests, the UK Treasury refuses to confirm how this money will be spent. The reality is that this is just another Government tax on passengers and we again call on the Chancellor to end this modern day highway robbery. We have implemented our planned 20% reduction in Stansted aircraft numbers this winter due to the doubling of costs by the BAA monopoly. As a result we anticipate that full year passenger volumes will grow by approximately 19% to 50.5m. These capacity reductions will bring more stability to winter yields, reduce operating costs and eliminate losses on non profitable winter routes at Stansted. Our outlook for the remainder of the fiscal year remains cautious as we have very little visibility beyond the next two months. Shareholders should note that the anticipated decline in Q3 yields will result in Net Profit being significantly lower than last year's Q3 comparative which included a one off settlement arising from an early contract termination by our hotel partner. Based on our current Q3 forward bookings and the impact of Easter in Q4, we now anticipate that winter (H2) yields will be somewhat better than previously forecast with the expected yield declines being towards the lower end of the -5% to -10% range. As a result of these better winter yield forecasts and the costs savings which we continue to realise, we now believe that full year Net Profit will rise by 17.5% to approximately €470m, rather than the €440 previously guided. During the last two months we undertook a series of share buy backs amounting to a total of 53.5m shares at a cost of €267m. The shares cancelled represent approximately 3.5% of the company's pre-existing issued share capital. To celebrate these record half year results today, we have launched a 4m seat sale with fares at €10/£10 inclusive'. - - - - - - - - All of Ryanair's 5,000 people wish to extend their sincere and deepest sympathies to the family and many friends of DR TONY RYAN who died on the 3rd October 2007, after a long illness. Dr Ryan founded Ryanair 23 years ago. He persevered when all others lost faith. His vision, leadership and ambition inspired Ryanair's growth to become the world's biggest international passenger airline. He was and will remain an inspiration to all of us. It is rare that one man in his own lifetime can transform the lives of millions. Dr Ryan did so by pioneering competition and low fare air travel in Europe. Ryanair is proud to bear his name and his legacy. We will miss him greatly. Dr Ryan and the Ryan family are in our thoughts and prayers at this time. May he rest in peace. - - - - - - - - Ends. Monday, 5th November 2007 For further information please contact: Howard Millar Pauline McAlester Ryanair Holdings Plc Murray Consultants Tel: +353-1-812 1212 Tel: +353-1-498 0300 www.ryanair.com 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 the 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 23 bases and 563 low fare routes across 26 countries. By the end of March 2008 Ryanair will operate a fleet of 163 Boeing 737-800 aircraft with firm orders for a further 99 new aircraft (net of planned disposals), which will be delivered over the next 5 years. Ryanair currently employs a team of 5,000 people and expects to carry circa 50.5 million scheduled passengers in the current fiscal year. Ryanair Holdings plc and Subsidiaries Condensed Consolidated Interim Balance Sheet measured in Accordance with IFRS (unaudited) At Sep 30, At Mar 31, 2007 2007 €'000 €'000 Non-current assets Property, plant & equipment 3,137,916 2,884,053 Intangible assets 46,841 46,841 Available for sale financial assets 365,968 406,075 Derivative financial instruments 1,079 - ________ ________ Total non-current assets 3,551,804 3,336,969 ________ ________ Current assets Inventories 2,886 2,420 Other assets 74,127 77,707 Trade receivables 28,903 23,412 Derivative financial instruments 43,998 52,736 Restricted cash 171,042 258,808 Financial assets: cash > 3 months 563,224 592,774 Cash and cash equivalents 1,339,182 1,346,419 ________ ________ Total current assets 2,223,362 2,354,276 ________ ________ Total assets 5,775,166 5,691,245 ======= ======= Current liabilities Trade payables 57,428 54,801 Accrued expenses and other liabilities 702,213 807,136 Current maturities of debt 208,919 178,918 Derivative financial instruments 81,752 56,053 Current tax 63,758 20,822 ________ ________ Total current liabilities 1,114,070 1,117,730 ________ ________ Non-current liabilities Provisions 35,282 28,719 Derivative financial instruments 52,557 58,666 Deferred income tax liability 146,563 151,032 Other creditors 119,526 112,177 Non-current maturities of debt 1,689,334 1,683,148 ________ ________ Total non-current liabilities 2,043,262 2,033,742 ________ ________ Shareholders' equity Issued share capital 9,545 9,822 Share premium account 595,071 607,433 Retained earnings 2,083,741 1,905,211 Other reserves (70,523) 17,307 ________ ________ Shareholders' equity 2,617,834 2,539,773 ________ ________ Total liabilities and 5,775,166 5,691,245 shareholders' equity ======= ======= Ryanair Holdings plc and Subsidiaries Condensed Consolidated Interim Income Statement measured in accordance with IFRS (unaudited) Quarter Quarter Half year Half year ended ended ended ended Sep 30, Sep 30, Sep 30, Sep 30, 2007 2006 2007 2006 €'000 €'000 €'000 €'000 ------- ------- ------- ------- Operating revenues Scheduled revenues 726,050 602,089 1,301,998 1,092,102 Ancillary revenues 135,272 87,700 252,330 164,321 ________ ________ ________ ________ Total operating revenues -continuing operations 861,322 689,789 1,554,328 1,256,423 ________ ________ ________ ________ Operating expenses Staff costs 70,358 57,107 146,285 113,844 Depreciation 41,285 36,035 76,063 71,622 Fuel & oil 202,348 169,580 392,737 337,042 Maintenance, materials and repairs 14,310 10,613 26,940 21,313 Marketing & distribution costs 6,221 5,885 14,535 11,608 Aircraft rentals 18,525 12,996 36,707 25,394 Route charges 65,802 50,305 128,975 98,384 Airport & handling charges 107,076 71,222 208,883 139,097 Other 31,426 26,942 61,770 52,312 ________ ________ ________ ________ Total operating expenses 557,351 440,685 1,092,895 870,616 ________ ________ ________ ________ Operating profit - continuing operations 303,971 249,104 461,433 385,807 Other income/(expenses) Finance income 21,438 16,069 41,494 28,923 Finance expense (21,941) (20,698) (44,865) (41,311) Foreign exchange gains/(losses) 121 (908) 1,487 (1,229) ________ ________ ________ ________ Total other income/(expenses) (382) (5,537) (1,884) (13,617) ________ ________ ________ ________ Profit before tax 303,589 243,567 459,549 372,190 Tax on profit on ordinary activities (34,907) (30,122) (51,953) (43,063) ________ ________ ________ ________ Profit for the period - all attributable to equity holders of parent 268,682 213,445 407,596 329,127 ======= ======= ======= ======= Basic earnings per ordinary share (in euro cents) 17.72 13.83 26.61 21.33 Diluted earnings per ordinary share (in euro cents) 17.55 13.73 26.34 21.19 Weighted average number of ordinary shares (in 000's)* 1,515,884 1,543,444 1,531,512 1,542,826 Weighted average number of diluted shares (in 000's)* 1,530,912 1,554,982 1,547,162 1,552,912 ======= ======= ======= ======= *Adjusted for share split of 2 for 1 which occurred on February 26, 2007 Ryanair Holdings plc and Subsidiaries Condensed Consolidated Interim Cash Flow Statement measured in accordance with IFRS (unaudited) Half year ended Half Year ended Sep 30, 2007 Sep 30, 2006 €'000 €'000 Operating activities Profit before tax 459,549 372,190 Adjustments to reconcile profits before tax to net cash provided by operating activities Depreciation 76,063 71,622 (Increase) in inventories (466) (205) (Increase)/decrease in trade receivables (5,491) 5,702 Decrease/(increase) in other current assets 26,083 (16,320) Increase in trade payables 2,627 8,620 (Decrease) in accrued expenses (103,964) (55,320) Increase in other creditors 7,349 35,489 Increase in maintenance provisions 6,563 6,001 (Increase) in interest receivable (3,549) (3,069) Increase in interest payable (1,617) 4,212 Retirement costs 656 329 Share based payments 9,135 2,012 Income tax (216) 328 ________ ________ Net cash provided by operating activities 472,722 431,591 ________ ________ Investing activities Capital expenditure (purchase of property, plant and equipment) (329,926) (88,797) Purchase of equities classified as available for sale (57,039) (185,363) Divestiture of restricted cash 87,766 - Reduction/(investment) in financial assets: cash > 3 months 29,550 (495,387) ________ ________ Net cash used in investing activities (269,649) (769,547) ________ ________ Financing activities Cost associated with repurchase of shares (253,075) - Net proceeds from shares issued 6,578 6,450 Increase/(decrease) in long term borrowings 36,187 (42,806) ________ ________ Net cash provided by financing activities (210,310) (36,356) ________ ________ (Decrease) in cash and cash equivalents (7,237) (374,312) Cash and cash equivalents at beginning of the period 1,346,419 1,439,004 ________ ________ Cash and cash equivalents at end of the period 1,339,182 1,064,692 ========= ========= Ryanair Holdings plc and Subsidiaries Condensed Consolidated Interim Statement of Recognised Income and Expense measured in accordance with IFRS (unaudited) Quarter Quarter Half year Half year ended ended ended ended Sep 30, 2007 Sep 30, 2006 Sep 30, 2007 Sep 30, 2006 €'000 €'000 €'000 €'000 Cash flow hedge reserve - effective portion of fair value changes to derivatives: Effective portion of changes in fair value of cash flow hedges - - 25,462 115 Net change in fair value of cash flow hedges transferred to the profit and loss (32,720) (32,921) (32,720) (32,921) ________ ________ ________ ________ Net movements (out of)/into cashflow hedge reserve (32,720) (32,921) (7,258) (32,806) Net decrease in fair value of available for sale assets (43,872) - (84,915) - ________ ________ ________ ________ Income and expenditure recognised directly in equity (76,592) (32,921) (92,173) (32,806) ________ ________ ________ ________ Profit for the period 268,682 213,445 407,596 329,127 Total recognised income and expense 192,090 180,624 315,423 296,321 ________ ________ ________ ________ Ryanair Holdings plc and Subsidiaries Condensed Consolidated Interim Income Statement measured in accordance with US GAAP (unaudited) Quarter Quarter Half year Half year ended ended ended ended Sep 30, Sep 30, Sep 30, Sep 30, 2007 2006 2007 2006 €'000 €'000 €'000 €'000 Operating revenues Scheduled revenues 726,050 602,089 1,301,998 1,092,102 Ancillary revenues 135,272 87,700 252,330 164,321 ________ ________ ________ ________ Total operating revenues - continuing operations 861,322 689,789 1,554,328 1,256,423 ________ ________ ________ ________ Operating expenses Staff costs 70,406 57,214 146,333 114,059 Depreciation 41,891 36,450 77,216 72,419 Fuel & oil 202,348 169,580 392,737 337,042 Maintenance, materials and repairs 14,310 10,613 26,940 21,313 Marketing & distribution 6,221 5,885 14,535 11,608 costs Aircraft rentals 18,525 12,996 36,707 25,394 Route charges 65,802 50,305 128,975 98,384 Airport & handling charges 107,076 71,222 208,883 139,097 Other 31,426 26,942 61,770 52,312 ________ ________ ________ ________ Total operating expenses 558,005 441,207 1,094,096 871,628 ________ ________ ________ ________ Operating profit - continuing operations 303,317 248,582 460,232 384,795 Other income/(expenses) Finance income 21,438 16,069 41,494 28,923 Finance expense (16,409) (17,659) (34,835) (36,073) Derivative financial instruments 4,331 - 1,593 - Foreign exchange gains/(losses) 121 (908) 1,487 (1,229) ________ ________ ________ ________ Total other income/ (expenses) 9,481 (2,498) 9,739 (8,379) ________ ________ ________ ________ Profit before tax 312,798 246,084 469,971 376,416 Tax on profit on ordinary activities (36,058) (30,018) (53,254) (43,591) ________ ________ ________ ________ Profit for the period - all attributable to equity holders of parent 276,740 216,066 416,717 332,825 ======= ======= ======= ======= Basic earnings per ADS (in euro cents) 91.28 69.99 136.05 107.86 Diluted earnings per ADS (in euro cents) 90.38 69.48 134.67 107.16 Weighted average number of ordinary shares (in 000's)* 1,515,884 1,543,444 1,531,512 1,542,826 Weighted average number of diluted shares (in 000's)* 1,530,912 1,554,982 1,547,162 1,552,912 ======= ======= ======= ======= (Five ordinary shares equal 1 ADS) *Adjusted for share split of 2 for 1 which occurred on February 26, 2007 Ryanair Holdings plc and Subsidiaries Summary of significant differences between IFRS and US generally accepted principles (unaudited) (a) Net income under US GAAP Quarter ended Quarter ended Half year ended Half year ended Sep 30, Sep 30, Sep 30, Sep 30, 2007 2006 2007 2006 €'000 €'000 €'000 €'000 Net income in accordance with IFRS 268,682 213,445 407,596 329,127 Adjustments Pensions (48) (107) (48) (215) Capitalised interest re aircraft acquisition programme 4,926 2,624 8,878 4,441 Derivative financial instruments 4,331 - 1,593 - Taxation - effect of above adjustments (1,151) 104 (1,302) (528) ________ _______ ________ ________ Net income in accordance with U.S. GAAP 276,740 216,066 416,717 332,825 ======= ====== ======= ======= (b) Shareholders' equity in accordance with U.S. GAAP At Sep 30, At Sep 30, 2007 2006 €'000 €'000 Shareholders' equity as reported in the consolidated balance sheets and in accordance IFRS 2,617,834 2,296,768 Adjustments: Pensions (48) 9,026 Capitalised interest re: aircraft acquisition program, net 49,200 33,889 Minimum pension liability (net of tax) - (4,295) Unrealised (losses) on derivative financial instruments (10,392) - Tax effect of adjustments (excluding pension) (4,845) (6,459) _______ _______ Shareholders' equity as adjusted in accordance with U.S. GAAP 2,651,749 2,328,929 ======= ======= The movements in shareholders' equity in accordance with U.S. GAAP are summarized as follows: Opening shareholders' equity under U.S. GAAP 2,567,522 2,020,448 Comprehensive Income: Unrealised (losses) on derivative financial instruments (net of tax) (10,213) (32,806) Unrealised (losses) on available for sale financial assets (84,915) - Net income in accordance with U.S. GAAP 416,717 332,825 ________ ________ Total comprehensive income 321,589 300,019 Share based payments 9,135 2,012 Stock issued for cash 6,578 6,450 Repurchase of stock (253,075) - ________ ________ Closing shareholders' equity under U.S. GAAP 2,651,749 2,328,929 ======= ======= (c) Total assets in accordance with U.S. GAAP At Sept 30, At Mar 31, 2007 2007 €000 €000 Total assets as reported in the Consolidated balance sheets and in accordance with IFRS adjustments: 5,775,166 5,691,245 Capitalized interest re aircraft acquisition program 49,200 40,322 ________ ________ Total assets as adjusted in accordance with U.S. GAAP 5,824,366 5,731,567 ======= ======= Ryanair Holdings plc and Subsidiaries Operating and Financial Overview Summary Half Year Ended September 30, 2007 Profit after tax increased by 24% to €407.6m, compared to €329.1m in the previous half year ended September 30, 2006 reflecting a 20% increase in passenger numbers, a 1% decrease in fares (including checked in baggage revenues) and strong growth in ancillary revenues. The growth in revenues was offset by a combination of higher fuel, airport and staff costs. Total operating revenues increased by 24% to €1,554.3m, which was faster than the 20% growth in passenger volumes, as average fares decreased by 1% and ancillary revenues grew by 54% to €252.3m. Total revenue per passenger as a result increased by 3%, whilst Passenger Load Factor decreased by 1 point to 86% during the period. Total operating expenses increased by 26% to €1,092.9m, due to the increased level of activity, and the increased costs, associated with the growth of the airline. Fuel, which represents 36% of total operating costs compared to 39% last year, increased by 17% to €392.7m due to an increase in the number of hours flown, offset by, a decrease in the US dollar cost per gallon, a positive movement in the US dollar exchange rate versus the euro, and a reduction in fuel consumption arising from the installation of winglets. Staff costs rose by 29% reflecting the growth in the airline, a share option charge of €9.1m, and an increase in cabin crew ratios. Excluding the charge of €9.1m for the share option grant, staff costs would have increased by 21% Airport and Handling charges increased by 50% to €208.9m arising from the doubling of airport charges at Stansted and higher charges at Dublin Airport. As a result unit costs increased by 5% and operating margins decreased by 1 point to 30%, whilst operating profit increased by 20% to €461.4m. Net Margins remained flat at 26% for the reasons outlined above. Earnings per share increased by 25% to 26.61 cent for period. Balance Sheet Total costs decreased by €124.5m to €2,073.4m as the growth in profitability was offset by the funding of a €253.1m share buy back programme, €57.0m increased investment in Aer Lingus and €329.9m in capital expenditure largely from internal resources. Total debt, net of repayments, increased during the period by €36.2m. Shareholders' Equity at September 30, 2007 increased by €78.1m to €2,617.8m, compared to March 31, 2007 due to the €407.6m increase in profitability during the period and by €6.6m due to the exercise of share options, offset by, €83.0m due to the impact of IFRS accounting treatment for derivative financial assets, available for sale financial assets, stock options and a share buy back of €253.1m. Detailed Discussion and Analysis Half Year Ended September 30, 2007 Profit after tax, increased by 24% to €407.6m due to a 20% increase in passenger numbers, a 1% decrease in fares (including checked in baggage revenues) and strong growth in ancillary revenues. The growth in revenues was offset by a combination of increased airport costs which rose by 50% to €208.9m arising from the doubling of airport charges at Stansted, higher charges at Dublin Airport, and increased staff costs, primarily due to higher cabin crewing ratios, which rose by 29% by €146.3m. Operating margins, as a result, decreased by 1 point to 30%, which in turn resulted in operating profit increasing by 20% to €461.4m compared to the previous half year ended September 30, 2006. Total operating revenues increased by 24% to €1,554.3m whilst passenger volumes increased by 20% to 26.6m. Total revenue per passenger increased by 3% due to strong ancillary revenue growth. Scheduled passenger revenues increased by 20% to €1,302.0m reflecting a 1% decrease in fares and a 20% increase in traffic due to increased passenger numbers on existing routes and the successful launch of new routes and bases. Load factor decreased by 1 point to 86% during the period due to a combination of softer market conditions and a 21% increase in seat capacity. Ancillary revenues continue to outpace the growth of passenger volumes and rose by 54% to €252.3m in the period. This performance reflects the strong growth in onboard sales, excess baggage revenues, non-flight scheduled revenues, and other ancillary products. Total operating expenses rose by 26% to €1,092.9m due to the increased level of activity, and the increased costs associated with the growth of the airline, particularly higher airport charges and staff costs. Total operating expenses were also adversely impacted by a 7% increase in average sector length. Staff costs have increased by 29% to €146.3m. This primarily reflects a 29% increase in average employee numbers to 4,875, the impact of pay increases granted during the period, and a €9.1m charge for a share option grant made to eligible employees. Excluding the charge of €9.1m for the share option grant, staff costs would have increased by 21%. Employee numbers rose due to the growth of the business and an increase in cabin crewing ratios as a result of a new EU working directive. Depreciation and amortisation increased by 6% to €76.1m. This reflects an additional 22 lower cost 'owned' aircraft in the fleet this period compared to September 30, 2006, offset by a revision of the residual value of the fleet to reflect current market valuations and the positive impact on amortisation of the stronger euro versus the US dollar. Fuel costs rose by 17% to €392.7m due to a 29% increase in the number of hours flown offset by a 10% decrease in euro equivalent cost per gallon of fuel hedged in addition to a reduction in fuel consumption due to the installation of winglets. Maintenance costs increased by 26% to €26.9m, due to a combination of the increase in the number of leased aircraft from 24 to 35, and the positive impact of a stronger euro versus the US dollar exchange rate. Marketing and distribution costs increased by 25% to €14.5m due to a combination of the growth of the airline, and the increased commissions payable to airports arising from the growth in baggage revenues. Aircraft rental costs increased by 45% to €36.7m reflecting an additional 11 leased aircraft operating during the period compared to the same period last year. Route charges rose by 31% to €129.0m due to an increase in the number of sectors flown and a 7% increase in the average sector length. Airport and handling charges increased by 50% to €208.9m, significantly higher than the growth in passenger volumes, and reflects the impact of the doubling of unit costs at Stansted Airport and higher charges at Dublin Airport, offset by lower costs at new airports and bases. Other expenses increased by 18% to €61.8m, which is lower than the growth in ancillary revenues due to improved margins on some existing products and cost reductions on some indirect costs. Operating margins have declined by 1 point to 30% due to the reasons outlined above whilst operating profits have increased by 20% to €461.4m during the period. Interest receivable has increased by 43% to €41.5m for the period primarily due to the increase in average deposit rates earned in the period, partially offset by a lower average cash balance. Interest payable increased by 9% to €44.9m due to the drawdown of debt to part fund the purchase of new aircraft and the adverse impact of higher interest dates. Foreign exchange gains during the period of €1.5m are primarily due to the positive impact of changes in the US dollar exchange rate against the euro. The Company's Balance Sheet continues to strengthen due to the strong growth in profits during the period. The Company generated cash from operating activities of €472.7m which part funded the €253.1m share buy back programme, €57.0m increased investment in Aer Lingus, and capital expenditure incurred during the period with the remaining balance reflected in Total Cash of €2,073.4m. Capital expenditure amounted to €329.9m which largely consisted of advance aircraft payments for future aircraft deliveries and the delivery of eight aircraft and two simulators. Long term debt, net of repayments, increased by €36.2m during the period. Shareholders' Equity at September 30, 2007 increased by €78.1m to €2,617.8m, compared to March 31, 2007 due to the €407.6m increase in profitability during the period, €6.6m arising from the exercise of share options, offset by €83.0m reflecting the impact of IFRS accounting treatment for derivative financial assets, available for sale financial assets, stock options and share buy back of €253.1m. Detailed Discussion and Analysis Quarter Ended September, 30 2007 Profit after tax, increased by 26% to €268.7m due to a 22% increase in passenger numbers, a 1% decrease in fares (including checked in baggage revenues) and strong growth in ancillary revenues. The growth in revenues was offset by a combination of increased airport costs which rose by 50% to €107.1m arising from the doubling of airport charges at Stansted and higher charges at Dublin Airport, and a one off step up in staff costs, primarily due to higher cabin crewing ratios, which rose by 23% to €70.4m. Operating margins, as a result, decreased by 1 point to 35%, which in turn resulted in operating profit increasing by 22% to €304.0m compared to the previous quarter ended September 30, 2006. Total operating revenues increased by 25% to €861.3m whilst passenger volumes increased by 22% to 14.0m. Total revenue per passenger increased by 3% due to strong ancillary revenue growth. Scheduled passenger revenues increased by 21% to €726.1m due to a 22% increase in traffic reflecting increased passenger numbers on existing routes and the successful launch of new routes and bases. During the period average fares (including checked baggage revenues) were down by 1% whilst load factor remained flat at 89% during the quarter. Ancillary revenues continue to grow faster than passenger volumes with revenues increasing by 54% to €135.3m in the quarter. This performance reflects the strong growth in on board sales, excess baggage revenues, non-flight scheduled revenue and other ancillary products. Total operating expenses rose by 26% to €557.3m due to the increased level of activity, and the increased costs associated with the growth of the airline particularly higher airport charges and staff costs. Total operating expenses were also adversely impacted by a 7% increase in average sector length. Staff costs have increased by 23% to €70.4m. This primarily reflects a 29% increase in average employee numbers to 5,024 and the impact of pay increases granted during the year. Employee numbers rose due to an increase in cabin crewing ratios as a result of a new EU working directive. Depreciation and amortisation increased by 15% to €41.3m. This reflects an additional 22 lower cost 'owned' aircraft in the fleet this quarter compared to September 30, 2006, offset by a revision of the residual value of the fleet to reflect current market valuations and the positive impact on amortisation of the stronger euro versus the US dollar. Fuel costs rose by 19% to €202.3m due to a 30% increase in number of hours flown offset by a 10% decrease in the average euro equivalent cost per gallon of fuel hedged and a reduction in fuel consumption due to the installation of winglets. Maintenance costs increased by 35% to €14.3m, due to a combination of the increase in the number of leased aircraft from 24 to 35, and the positive impact of a stronger euro versus the US dollar exchange rate. Marketing and distribution costs increased by 6% to €6.2m due to the growth of the airline and the increased commissions payable to airports arising from the growth in baggage revenues. Aircraft rental costs increased by 43% to €18.5m reflecting an additional 11 leased aircraft operating during the quarter compared to the same quarter last year. Route charges rose by 31% to €65.8m due to an increase in the number of sectors flown and an increase of 7% in the average sector length. Airport and handling charges increased by 50% to €107.1m. This is higher than the growth in passenger volumes and reflects the impact of the doubling of costs at Stansted Airport and higher charges at Dublin Airport, offset by lower costs at new airports and bases. Other expenses increased by 17% to €34.1m, which is lower than the growth in ancillary revenues due to improved margins on some existing products and cost reductions on some indirect costs. Operating margins fell by 1 point to 35% for to the reasons outlined above whilst operating profits have increased by 22% to €304.0m during the quarter. Interest receivable has increased by 33% to €21.4m for the quarter primarily due to the increase in average deposit rates earned in the period, offset somewhat by a lower average cash balance. Interest payable increased by 6% to €21.9m due to the drawdown of further debt to part fund the purchase of new aircraft and the adverse impact of higher interest rates. Statement of the directors in respect of the half-yearly financial report We confirm our responsibility for the half yearly financial statements and that to the best of our knowledge: * the condensed set of financial statements comprising the condensed income statement, the condensed statement of recognised income and expense, the condensed balance sheet and the related notes have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU; * the interim management report includes a fair review of the information required by: a. Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations 2007, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and b. Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations 2007, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so. On behalf of the Board David Bonderman Michael O'Leary Chairman Chief Executive November 5, 2007 Ryanair Holdings plc and Subsidiaries Notes 1. Reporting entity Ryanair Holdings plc (the 'Company') is a company domiciled in Ireland. The condensed consolidated interim financial statements of the Company for the six months ended September 30, 2007 comprise the Company and its subsidiaries (together referred to as the 'Group'). The consolidated financial statements of the Group as at and for the year ended March 31, 2007 are available at www.ryanair.com. 2. Statement of compliance These unaudited condensed consolidated interim financial statements ('the interim financial statements') have been prepared in accordance with International Accounting Standards ('IAS') 'Interim Financial Reporting' as endorsed by the European Union. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the most recent published consolidated financial statements of the Group. The comparative figures included for the year ended March 31, 2007 do not constitute statutory financial statements of the Group within the meaning of regulation 40 of the European Communities (companies, group accounts) regulations, 1992. Statutory financial statements for the year ended March 31, 2007 have been filed with the companies' office. The auditors' report on these financial statements was unqualified. The Audit Committee approved the interim financial statements for the half year ended September 30, 2007 on November 2, 2007. 3. Significant accounting policies Except as stated otherwise below, this quarter's financial information has been prepared in accordance with the accounting policies set out in the Group's most recent published consolidated financial statements, which were prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the EU. 4. Generally Accepted Accounting Policies The Management Discussion and Analysis of Results (Operating and Financial Overview) for the half year ended September 30, 2007 and the comparative half year are based on the results reported under the Group's IFRS accounting policies. 5. Estimates The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. Except as described below, in preparing these consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied in the most recent published consolidated financial statements. During the period ended September 30, 2007 management reassessed its estimates of the recoverable amount of aircraft residual values following certain recent aircraft disposals and trends in the market. 6. Seasonality of operations The Group's results of operations have varied significantly from quarter to quarter, and management expects these variations to continue. Among the factors causing these variations are the airline industry's sensitivity to general economic conditions and the seasonal nature of air travel. Accordingly the first half-year typically results in higher revenues and results. 7. Income tax expense The Group's consolidated effective tax rate in respect of operations for the six months ended September 30, 2007 was approximately 11.5 percent, in line with the same period last year. 8. Capital and reserves Share buy back programme. The Company commenced a share buy back programme in June 2007. To date 53.5m shares, at an approximate cost of €267m, have been purchased for cancellation. This represents approximately 3.5% of the pre existing share capital of the Company. The shareholder authority to complete the balance of the buy back of approximately €33m was extended by AGM on September 20, 2007 for a period of one year. 9. Share based payments The terms and conditions of the share option programme are disclosed in the most recent published consolidated financial statements. In June 2007 a further grant on similar terms was made to eligible employees, with a consequent charge to the income statement in the period of approximately €9.1m. 10. Contingencies The Group is engaged in litigation arising in the ordinary course of its business. The Group does not believe that any such litigation will individually or in aggregate have a material adverse effect on the financial condition of the Group. Should the Group be unsuccessful in these litigation actions, management believes the possible liabilities then arising cannot be determined but are not expected to materially adversely affect the Group's results of operations or financial position. 11. Capital commitments During the half year ended September 30, 2007 the Group announced the purchase of 27 additional Boeing 737-800s. This brings Ryanair's total firm orders for B737-800s to 308 and the total fleet size (net of planned disposals) to 262 by 2012. These additional aircraft are due for delivery in financial year ended March 31, 2010. 12. Available for sale financial assets (Aer Lingus) The following is the movement in available for sale financial assets in the six month period. €000 Balance at April 1, 2007 406,075 Purchase of equities 57,039 Reversal of Capital Gains tax provision (12,231) Net change in fair value (84,915) ________ Balance at September 30, 2007 365,968 ======= As of September 30, 2007 the average cost per share of Aer Lingus was €2.58 and the market value was €2.35, a decline of 9% Accordingly the view at this time under accounting rules is that this is neither 'significant' nor 'prolonged' and therefore these is no impairment loss. However in the event that the asset becomes impaired the difference between the cost of the shares and the market value is recorded as an impairment loss in the profit and loss. At September 30, 2007 this amounted to €35.9m. The Group will review this matter at the end of each quarter. 13. Post balance sheet events Disposal of Aircraft In October 2007 the Group disposed of three Boeing 737-800 aircraft under its planned disposal programme. Agreements in relation to the forward sale of a further seventeen Boeing 737-800 aircraft have been signed. The group continue to market additional aircraft in line with its planned disposal of up to forty six aircraft. 14. Loans and borrowings The following is the movement in loans and borrowings (non-current and current) during the half year. €000 Balance at April 1, 2007 1,862,066 Loans raised to finance aircrafts/simulator purchase 144,054 Repayments of amounts borrowed (107,867) ________ Balance at September 30, 2007 1,898,253 ======= 15. Changes in shareholders' equity Other Reserves Share Capital Ordinary premium Retained Treasury redemption Other shares account earnings shares reserve reserves Total €000 €000 €000 €000 €000 €000 €000 Balance at March 31, 2006 9,790 596,231 1,467,623 - - (81,659) 1,991,985 _______ _______ _______ _______ _______ _______ _______ Issue of ordinary equity shares 32 11,202 - - - - 11,234 Effective portion of changes in fair value of cash flow hedges - - - - - 46,105 46,105 Net change in fair value of available for sale assets - - - - - 48,926 48,926 Share-based payments - - - - - 3,935 3,935 Profit for the financial year - - 435,600 - - - 435,600 Retirement benefits - - 1,988 - - - 1,988 _______ _______ _______ _______ _______ _______ _______ Balance at March 31, 2007 9,822 607,433 1,905,211 - - 17,307 2,539,773 _______ _______ _______ _______ _______ _______ ________ Repurchase of ordinary equity shares - - (229,066) (24,009) - - (253,075) Issue of ordinary equity shares 16 6,562 - - - - 6,578 Capital redemption reserve fund (293) (18,924) - - 19,217 - - Effective portion of changes in fair value of cash flow hedges - - - - - (7,258) (7,258) Net change in fair value of available for sale assets - - - - - (84,915) (84,915) Share-based payments - - - - - 9,135 9,135 Profit for the period - - 407,596 - - - 407,596 _______ _______ _______ _______ _______ _______ _______ Balance at September 30, 2007 9,545 595,071 2,083,741 (24,009) 19,217 (65,731) 2,617,834 _______ _______ _______ _______ _______ _______ _______ 16. Fin 48 'Accounting for uncertainty in income taxes' (US GAAP) The Group adopted the provisions of FIN 48 on April 1, 2007. The implementation of FIN 48 did not have a material impact on the Group's financial statements. 17. Analysis of operating revenues and segmental analysis All revenues derive from the Group's principal activity and business segment as a low fares airline and includes scheduled services, car hire, internet income and related sales to third parties. Revenue is analysed by geographical area (by country of origin) as follows: Half year ended Half year ended Sep 30, Sept 30, 2007 2006 €000 €000 United Kingdom 645,046 584,236 Other European countries 909,280 672,187 ________ _______ 1,554,328 1,256,423 ======= ======= All of the Group's operating profit arises from low fares airline-related activities, its only business segment. The major revenue earning assets of the Group are comprised of its aircraft fleet, which is registered in Ireland and therefore principally all profits accrue in Ireland. Since the Group's aircraft fleet is flexibly employed across its route network in Europe, there is no suitable basis of allocating such assets and related liabilities to geographical segments. Internet income comprises revenue generated from Ryanair.com, excluding internet car hire revenue, which is included under the heading car hire. Non-flight scheduled revenue arises from the sale of rail and bus tickets, hotel reservations and other revenues generated, including excess baggage charges, all directly attributable to the low fares business. 18. Property, plant and equipment Acquisitions and disposals During the six months ended September 30, 2007, the Group acquired assets with a cost of €329.9m (six months ended September 30, 2006: €88.7 million). There were no assets disposed of during the six month period. Independent review report to Ryanair Holdings plc Introduction We have been engaged by Ryanair Holdings plc ('Ryanair', 'the Company') to review the condensed set of financial statements in the half-yearly financial report for the six months ended September 30, 2007, which comprises the condensed consolidated interim balance sheet at September 30, 2007 and the related condensed consolidated interim statements of income, cash flows and recognised income and expense, for the six-month period then ended, and the related notes to the interim financial statements. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. Directors' Responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Republic of Ireland's Financial Regulator. As disclosed in note 3, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards, as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity', issued by the Auditing Practices Board for use in the UK and Ireland. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended September 30, 2007 is not prepared, in all material respects, in accordance with International Accounting Standard 34, as adopted by the European Union and the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Republic of Ireland's Financial Regulator. KPMG Chartered Accountants Dublin November 5, 2007. This information is provided by RNS The company news service from the London Stock Exchange

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