Record Profits
Ryanair Holdings PLC
04 November 2002
RYANAIR RESULTS SIGNIFICANTLY EXCEED EXPECTATIONS FOR HALF YEAR END 30TH SEPT'02
Passengers increase by 37%, profits rise by 71%
Ryanair, Europe's low fares airline today (4 Nov'02) released financial results
for the half year ended 30 Sept showing record traffic and profit growth.
Passenger traffic for the six months grew by 37% to 7.84m. Load factors
increased by 6 points to a new high of 88%. Average fares declined by 2%,
however costs per passenger fell at a faster rate with the result that margins
increased 6 points to 32% during the half year. After tax profits have risen in
the period by 71% to a new record of €150.9m.
Summary Table of Results - in Euro's (Irish GAAP)
Half Year Ended Sept 30, 2001 Sept 30, 2002 % Increase
Passengers 5.70 7.84 + 37%
Load Factor 83% 88% +6%
Revenue €344.2m €464.6m + 35%
Profit after tax €88.0m €150.9m + 71%
Basic EPS (Euro Cent) €12.16 €19.99 + 64%
Announcing these results, Ryanair's CEO, Michael O'Leary commented;
Traffic and Revenue
Traffic and revenue growth has been remarkably strong across all markets. The
fleet rose to 44 aircraft, enabling us to operate ten routes from our new
Frankfurt Hahn base, as well as seven new routes from London Stansted. Two new
routes were added to our Brussels base and one each at Glasgow, Shannon and
Dublin. We also increased frequencies on some existing routes which resulted in
substantial market share gains. In August for example Ryanair overtook British
Airways to become the No.1 airline on London-Brussels one of Europe's most
important business travel routes.
At a time when most of our high fare competitors in Europe were reducing
capacity and increasing fares, Ryanair was stepping up its growth, and doing so
profitably. Our profits for the half year already exceed the total profits for
the entire previous year, and this is a remarkable achievement at a time when we
are still opening up new routes and driving down air fares.
We expect this growth in traffic and revenues to continue and our recent
announcement of four new routes from Frankfurt Hahn (to Barcelona, Bologna, Rome
and Stockholm) and our eighth European base in Milan Bergamo (operating 6 routes
to London, Paris, Brussels, Frankfurt, Barcelona and Hamburg) ensures that we
are continuing to grow our business across Continental Europe, at a time when
most other low fare carriers are adding capacity to/from the UK.
Costs continue to decline
The most important feature of these results is our success in continuously
driving down air fares and operating costs. Over the past six months Ryanair's
average fare has fallen by 2%, but our operating costs have fallen by 11% on a
per passenger basis. Ryanair's average fares continue to be over 50% lower than
our nearest competitor and up to 80% lower than Lufthansa and British Airways.
Our increased profitability at these lower fares gives Ryanair even more
capacity to reduce air fares, and further stimulate load factors, traffic and
growth.
At the core of our cost reduction programme is the addition of more Boeing
737-800 aircraft. These aircraft have delivered 45% more seats per flight than
our existing Boeing 737-200 aircraft, whilst maintaining 25 minute turnarounds.
The fact that the maintenance, fuel performance, and technical reliability of
the 737-800 has exceeded even Boeing's initial estimates, means that our costs
will continue to decline over the coming years as we take delivery of 103 more
737 aircraft.
Our disciplined policy of hedging fuel has also provided certainty and savings
over the past six months. The uncertainty in the Middle East has meant that
airlines who were buying fuel on the spot market were paying substantial
penalties. Ryanair has continued to purchase forward fuel at discounts to
current spot rates, and we have 80% of our fuel requirements to the end of
Sept'03 fully hedged at a lower cost than we paid over the past year. As ever
these costs reductions will be passed on to our customers in the form of lower
fares.
Staff productivity continues to improve, much of it as a result of operating the
larger 737-800 series aircraft. Ryanair is set to carry more than 9,000
passengers per employee this year, a figure that is more than twice that of
Southwest and over ten times greater than our principal competitor British
Airways.
Quality and Customer Service
We continue to invest heavily in the quality of our operations. Two new
simulators have been ordered at a cost of US$20m to enhance the quality of our
initial and recurrent pilot training as we double our traffic and fleet. We
have begun construction of our new aircraft maintenance centre at Glasgow
Prestwick Airport, which will give us even more control over our maintenance
costs, as well as further improving our maintenance quality control. Ryanair
will continue to invest heavily in the quality, reliability and serviceability
of our fleet and the people who fly and maintain them.
We did suffer a short-term drop in service levels at Stansted Airport in Q.1 as
a result of changing handling company from Servisair to Groundstar. Ryanair
have worked tirelessly with Groundstar at Stansted, and invested heavily in
additional staffing and training to ensure that Groundstar are now operating to
a standard that is better than that previously achieved by Servisair.
Ryanair remains committed to providing all of our passengers with the lowest
fares at all times, whilst also delivering a programme of continuous improvement
in customer service. In August we published the Ryanair Passenger Service
Charter which is by some considerable distance the toughest customer service
charter applied by any European airline.
This charter commits Ryanair to lower fares, No.1 on-time service, and a
response time to complaints that is four times better than the EU Airline
Charter. From now on Ryanair will also publish monthly customer service
statistics as shown in the table below. Our current rate of on-time departures,
customer complaints and mislaid baggage complaints place us among the very best
airlines for customer service. Ryanair supports the EU's proposal to publish
monthly passenger service statistics for all EU airlines.
PASSENGER SERVICE STATISTICS: SEPTEMBER
2001 2002
1. ON-TIME FLIGHTS 65% 81%
2. COMPLAINTS (per 1,000 passengers carried) 0.77 0.53
3. BAGGAGE COMPLAINTS (per 1,000 passengers carried) 1.19 1.21
4. COMPLAINTS ANSWERED WITHIN 7 DAYS N/A 99.7%
We intend to continue to provide customers with the lowest fares, more
frequencies than our competitors and the No.1 on-time performance, as we believe
that it is this combination of price and customer service that continues to
underpin our very strong traffic growth.
Outlook
Advance bookings on our four new routes from Frankfurt Hahn, our new Strasbourg
route, and the initial response to our new base at Milan Bergamo bodes well for
Ryanair's continued disciplined organic growth. After Christmas we will be
announcing more new routes with the possibility of one further base for Summer
2003, although at this time it is unlikely to include Dublin where the airport
monopoly continues to apply for planning permission for inefficient and
ridiculously expensive facilities instead of working with the airlines to
produce efficient, low cost facilities. We have submitted detailed proposals to
the Irish Government for the construction of a competing second terminal at
Dublin Airport and we urge the Minister to act quickly on these proposals to
ensure that a new Terminal 2 facility is available by 2004. As Irish tourism
continues to decline in the face of high access costs and third world airport
facilities, competition is needed now more than ever to revive tourism.
Over the coming six months we will take delivery of 13 more Boeing 737-800
aircraft. We are in continuing dialogue with Boeing about adding to our
existing order of firm and option aircraft. Our experience is that Boeing 737
is by some considerable distance the best aircraft for short-haul, quick
turnaround, low fares airlines and the fact that it is the aircraft of choice
for both Southwest Airlines in the U.S. and Ryanair in Europe confirms this
belief.
Finally, a word of caution. These half year profits have been exceptional, but
they will not in my opinion be repeated. Yields have only fallen by 2% during
the period which is a lot less than we had expected, particularly on the twenty
new routes we operated. We have already given away 870,000 free seats for Q.3,
we will launch new routes from Frankfurt Hahn in December and Milan Bergamo in
February and we will continue to drive down air fares in all of our existing
markets to widen the price gap between Ryanair and all of our competitors.
Yields in Q.3 and Q.4 will be significantly lower and as a result profit growth
will not be as strong as in the first half, however given our strong performance
in the first half, it is appropriate to raise our guidance for the full year
from €200m to €230m.'
ENDS.
4th November, 2002
For further info. Michael O'Leary, Ryanair, Tel. 353-1-8121212
please contact: Pauline McAlester, Murray Consultants, Tel. 353-1-4980300
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 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 8 bases, 89 low fare routes
across 14 countries. Ryanair has a fleet of 44 Boeing 737's, and firm orders
for up to a further 150 new 737-800's which will be delivered over the next 8
years. Ryanair currently employs a team of 1,700 people and will carry over 15
million scheduled passengers in the current year. All Ryanair's lowest fares
are available only at www.RYANAIR.COM which is Europe's largest travel website.
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
with UK and Irish GAAP(unaudited)
Quarter Quarter Half year Half year
ended ended ended ended
Sept 30, Sept 30, Sept 30, Sept 30,
2002 2001 2002 2001
€'000 €'000 €'000 €'000
Operating Revenues
Scheduled revenues 238,346 171,947 411,107 306,492
Ancillary revenues 31,981 21,436 53,482 37,735
Total operating revenues
-continuing operations 270,327 193,383 464,589 344,227
Operating expenses
Staff costs 23,307 19,542 46,732 38,373
Depreciation and amortisation 19,490 14,478 37,863 30,150
Other operating expenses
Fuel & Oil 34,777 27,890 68,422 54,244
Maintenance, materials and repairs 7,694 6,809 17,143 14,109
Marketing and distribution costs 2,622 3,264 8,107 9,410
Aircraft rentals - 1,006 - 3,879
Route charges 17,259 12,946 33,750 24,456
Airport and Handling charges 28,043 23,170 56,206 44,847
Other 14,995 12,021 28,871 23,741
Total operating expenses 148,187 121,126 297,094 243,209
Operating profit - continuing operations 122,140 72,257 167,495 101,018
Other income/(expenses)
Interest receivable and similar income 9,003 7,412 16,005 12,623
Interest payable and similar charges (7,660) (4,586) (14,054) (9,151)
Foreign exchange (losses)/gains 1,860 (643) (721) (2,581)
Gain/(loss) on disposal of fixed assets 1 519 (21) 526
Total other income/(expenses) 3,204 2,702 1,209 1,417
Profit on ordinary activities
before taxation 125,344 74,959 168,704 102,435
Tax on profit on ordinary activities (13,362) (10,138) (17,758) (14,397)
Profit for the period 111,982 64,821 150,946 88,038
Earnings per ordinary share
-Basic(Euro cent) 14.83 8.95 19.99 12.16
-Diluted(Euro cent) 14.64 8.83 19.72 11.98
Number of ordinary shares(in 000's)*
-Basic 755,031 724,283 755,031 724,196
-Diluted 765,016 734,263 765,377 734,627
*The Company implemented a 2:1 share split on December 7th, 2001. Share capital
and earnings per share figures have been restated to give effect to the share
split.
Page 1
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheets in accordance with
UK and Irish GAAP
Sept 30, March 31,
2002 2002
€'000 €'000
Unaudited
Fixed assets
Tangible assets 1,054,438 951,806
Current Assets
Cash and liquid resources 1,030,204 899,275
Accounts receivable 12,522 10,331
Other assets 19,014 11,035
Inventories 16,064 17,125
Total current assets 1,077,804 937,766
Total assets 2,132,242 1,889,572
Current liabilities
Accounts payable 47,909 46,779
Accrued expenses and other liabilities 250,119 217,108
Current maturities of long term debt 44,479 38,800
Short term borrowings 10,732 5,505
Total current liabilities 353,239 308,192
Other liabilities
Provisions for liabilities and charges 52,680 49,317
Accounts payable due after one year 5,161 18,086
Long term debt 567,942 511,703
625,783 579,106
Shareholders' funds - equity
Called - up share capital 9,587 9,587
Share premium account 553,457 553,457
Profit and loss account 590,176 439,230
Shareholders' funds - equity 1,153,220 1,002,274
Total liabilities and shareholders' funds 2,132,242 1,889,572
Page 2
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statements in accordance
with UK and Irish GAAP (unaudited)
Half Year Half Year
ended ended
Sept 30, Sept 30,
2002 2001
€'000 €'000
Net cash inflow from operating activities 204,908 153,201
Returns on investments and servicing of finance 1,563 2,442
Taxation (2,171) (3,940)
Capital expenditure(including aircraft deposits) (140,516) (57,532)
Net cash inflow before financing
and use of liquid resources 63,784 94,171
Financing 61,918 (14,875)
(Increase) in liquid resources (143,576) (100,034)
(Decrease) in cash (17,874) (20,738)
Analysis of movement in liquid resources
Liquid resources at beginning of year 816,023 564,782
Increase in period 143,576 100,034
Liquid resources at end of period 959,599 664,816
Analysis of movement in cash
At beginning of year 77,747 56,860
Net cash outflow (17,874) (20,738)
Net cash at end of period 59,873 36,122
Page 3
Ryanair Holdings plc and Subsidiaries
Consolidated Statement of Changes in Shareholders' Funds - Equity
in accordance with UK and Irish GAAP (unaudited)
Share Profit
Ordinary premium and loss
shares account account Total
€'000 €'000 €'000 €'000
Balance at April 1, 2002 9,587 553,457 439,230 1,002,274
Profit for the period - - 150,946 150,946
Balance at September 30, 2002 9,587 553,457 590,176 1,153,220
Page 4
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
with US GAAP (unaudited)
Quarter Quarter Half year Half year
ended ended ended ended
Sept 30, Sept 30, Sept 30, Sept 30,
2002 2001 2002 2001
€'000 €'000 €'000 €'000
Operating Revenues
Scheduled revenues 238,346 171,947 411,107 306,492
Ancillary revenues 31,981 21,436 53,482 37,735
Total operating revenues
-continuing operations 270,327 193,383 464,589 344,227
Operating expenses
Staff costs 23,036 19,341 46,222 37,971
Depreciation and amortisation 19,490 14,478 37,863 30,150
Other operating expenses
Fuel & Oil 34,777 27,890 68,422 54,244
Maintenance, materials and repairs 7,694 6,809 17,143 14,109
Marketing and distribution costs 2,622 3,264 8,107 9,410
Aircraft rentals - 1,006 - 3,879
Route charges 17,259 12,946 33,750 24,456
Airport and Handling charges 28,043 23,170 56,206 44,847
Other 14,973 11,999 28,827 23,697
Total operating expenses 147,894 120,903 296,540 242,763
Operating profit - continuing operations 122,433 72,480 168,049 101,464
Other income/(expenses)
Interest receivable and similar income 9,003 7,412 16,005 12,623
Interest payable and similar charges (6,527) (4,586) (11,914) (9,151)
Foreign exchange losses (2,329) (643) (4,910) (2,581)
Gain/(loss) on disposal of fixed assets 1 519 (21) 526
Total other income/(expenses) 148 2,702 (840) 1,417
Profit on ordinary activities
before taxation 122,581 75,182 167,209 102,881
Tax on profit on ordinary activities (12,685) (10,155) (17,222) (14,431)
Net Income 109,896 65,027 149,987 88,450
Net Income per ADS *
-Basic(Euro cent) 72.78 44.89 99.33 61.07
-Diluted(Euro cent) 71.83 44.28 97.98 60.20
Weighted Average number of shares*
-Basic 755,031 724,283 755,031 724,196
-Diluted 765,016 734,263 765,377 734,627
*The Company implemented a 2:1 share split on December 7th, 2001. Share capital and earnings per share figures
have been restated to give effect to the share split.( Each ADS represents five ordinary shares)
Page 5
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between UK, Irish and US generally
accepted accounting principles(unaudited)
(A) Net income under US GAAP
<---Quarter ended----> <----Half year ended------->
Sept 30, Sept 30, Sept 30, Sept 30,
2002 2001 2002 2001
€000 €000 €'000 €'000
Profit as reported in the consolidated profit and
loss accounts in accordance with UK and Irish GAAP 111,982 64,821 150,946 88,038
Adjustments
Pension 155 85 277 170
Derivative financial instruments (4,189) - (4,189) -
Employment grants 116 116 233 232
Capitalised interest re aircraft acquisition programme 1,133 - 2,140 -
Darley Investments Limited 22 22 44 44
Tax effect of adjustments 677 (17) 536 (34)
Net income under US GAAP 109,896 65,027 149,987 88,450
(B) Consolidated Cashflow Statements in accordance
with US GAAP
<-----Half year ended------>
Sept 30, Sept 30,
2002 2001
€'000 €'000
Cash inflow from operating activities 204,300 151,703
Cash (outflow)/inflow from investing activities (130,741) 18,274
Cash inflow/(outflow) from financial activities 67,145 (12,205)
Increase in cash and cash equivalents 140,704 157,772
Cash and cash equivalents at beginning of year 482,492 389,059
Cash and cash equivalents at end of year 623,196 546,831
Cash and cash equivalents under US GAAP 623,196 546,831
Deposits with a maturity of between three and six months 407,008 161,855
Cash and liquid resources under UK and Irish GAAP 1,030,204 708,686
Page 6
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between UK, Irish and US generally
accepted accounting principles(unaudited)
(C) Shareholders' funds - equity
Sept 30, Sept 30,
2002 2001
€'000 €'000
Shareholders' equity as reported in the consolidated
balance sheets (UK and Irish GAAP) 1,153,220 758,054
Adjustments:
Pension 2,691 1,833
Employment grants (236) (701)
Capitalised interest re aircraft acquisition programme 7,167 -
Darley Investments Limited (283) (371)
Derivative financial instruments(net of tax) (47,786) 4,628
Tax effect of adjustments (1,224) (638)
Shareholders' equity as adjusted to accord with US GAAP 1,113,549 762,805
Opening shareholders' equity under US GAAP 1,019,607 674,386
Comprehensive Income adjustments
Investments - (588)
Derivative financial instruments(net of tax) (56,045) 439
(56,045) (149)
Net income in accordance with US GAAP 149,987 88,450
Stock issued for cash - 118
Closing shareholders' equity under US GAAP 1,113,549 762,805
Page 7
Ryanair Holdings plc
Management Discussion and Analysis of Results
Summary - Half Year ended September 30,2002
Profit after tax has increased by 71% to €150.9m, compared to €88.0m in the
previous half year ended September 30, 2001 driven by continued strong growth in
passenger volumes and tight cost control. Operating margins have increased by 7
points to 36% which has resulted in Operating Profit increasing by €66.5m to
€167.5m compared to half year ended September 30, 2001.
Total Operating Revenues grew by 35% to €464.6m whilst passengers numbers have
increased by 37% to 7.8m.
Scheduled Passenger revenues increased by 34% to €411.1m due to strong passenger
volume growth, offset by a 2% decline in average fares during the period.
Passenger growth was particularly strong at our two European bases,
Brussels-Charleroi and Frankfurt Hahn.
Ancillary Revenue grew by 42% to €53.5m, which is greater than the growth in
passenger volumes and reflects very strong growth in non-flight scheduled
revenue and income generated from Ryanair.com. Car hire and on board sales also
increased whilst Charters continued to lag the growth in passenger numbers due
to a reduction in the level of seat capacity allocated to the Charter programme
compared to last year.
Total Operating Expenses increased by 22% to €297.1m due to the increased level
of activity, and the increased costs, primarily fuel, depreciation and airport &
handing costs associated with the growth of the airline. Most of the operating
costs are now reflecting the positive reductions in costs arising from the
introduction of the 737-800 aircraft to the fleet.
Net margins have as a result of above increased from 26% to 32% whilst Net
Profit increased by 71% to €150.9m.
Earnings per share has risen by 64% to 19.99 euro cent, which is lower than the
growth in net profit due to an increased 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
€1,030.2m at September 30, 2002, reflecting the increased cash flows from the
profitable trading performance during the period. An additional three aircraft
were delivered in the period which in addition to aircraft deposits accounted
for the bulk of the €140.5m incurred in capital expenditure. This was part
funded by the draw down of long term debt which increased, net of repayments, by
€61.9m during the period. Shareholders' Funds at September 30, 2002 have
increased to €1,153.2m, compared to €1,002.3m at March 31, 2002.
Detailed Discussion and Analysis - Half Year ended September 30, 2002
Profit after tax has increased by 71% to €150.9m driven by strong growth in
passenger volumes and continued tight cost control and as a result Net margins
have increased by 6 points to 32% from 26% in the comparative period.
Total Operating Revenues increased by 35% to €464.6m whilst passenger volumes
increased by 37% to 7.8m.
Scheduled Passenger Revenues increased by 34% to €411.1m primarily due to
increased passenger numbers on new and existing routes, partly offset by a 2%
decline in average fares.
Ancillary Revenues increased by 42% to €53.5m, which is higher than the growth
in passenger volumes, and reflects increases in car hire revenues, other
ancillary product revenues, and internet-related revenues, offset by a reduction
in Charter revenues due to the continued focus on the scheduled operation.
Total Operating Expenses increased by 22% to €297.1m due to the increased level
of activity, and the increased costs primarily staff, depreciation, fuel and
airport & handling costs associated with the growth of the airline. Marketing
and distribution costs have continued to decline as the level of internet
bookings continued to increase during the period.
Staff costs have increased by 22% to €46.7m. This increase reflects a 7%
increase in average employee numbers to 1,664. Pilots, who earn a higher than
the average salary, accounted for 50% 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 26% to €37.9m due to an increase in
the number of aircraft owned from 36 to 44 and the amortisation of capitalised
maintenance costs offset by savings due to the increase in the number of
aircraft fully depreciated.
Fuel costs rose by 26% to €68.4m due to a 27% increase in the number of hours
flown, and the adverse impact of the strengthening of the US dollar to the Euro
offset by a decrease in the average US$ cost per gallon of fuel.
Maintenance costs increased by 22% to €17.1m 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.
Marketing and Distribution Costs decreased by 14% to €8.1m due to an increase in
the level of direct bookings via the internet, partly offset by a higher spend
on the promotion of new routes and the launch of new bases at Brussels-Charleroi
and Frankfurt-Hahn.
Aircraft Rental Costs declined by €3.9m reflecting the decline in the need to
rent additional seat capacity due to the delivery of new aircraft.
Route Charges increased by 38% to €33.8m due to an increase in the number of
sectors flown, an increase in the average sector length and an increase in the
basic unit cost in some countries.
Airport and Handling Charges increased by 25% to €56.2m due to an increase in
the number of passengers flown, 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 22% to €28.9m, 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 36% due to the reasons outlined above and
this has resulted in Operating Profits increasing by 66% to €167.5m during the
period.
Interest Receivable increased by €3.4m to €16.0m reflecting the strong growth in
cash resources arising from the profitable trading performance during the period
and the receipt of proceeds from the secondary offering in February 2002.
Interest Payable increased by €4.9m to €14.1m due to the increased level of debt
arising from the acquisition of new aircraft.
Foreign exchange losses arose primarily due to the conversion of sterling bank
balances to euro at the period end. The losses have declined during the period
due to the strengthening of Sterling against the Euro.
Taxation has increased by 23% 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 €1,054.4m from €951.8m principally
as a result of the delivery of three additional aircraft since March 31, 2002
and the payment of deposits for new deliveries. The Company generated cash from
operating activities of €204.9m, which funded advance payments on future
deliveries whilst the balance is reflected in the higher cash and liquid
resources figure of €1,030.2m. Total Debt has increased by a further €61.9m, net
of repayments, since March 31, 2002 to €612.4m. Shareholder's Funds at September
30, 2002 have increased to €1,153.2m compared to €1,002.3m at March 31, 2002.
Detailed Discussion and Analysis - Quarter Ended September 30, 2002
Profit after tax has increased by 73% to €112.0m driven by strong growth in
passenger volumes and continued tight cost control. Operating margins have, as a
result, increased to 45% from 38% in the comparative period. Operating Profit
increased by 69% to €122.1m compared to the quarter ended September 30, 2001
whilst Profit before tax increased by 67%.
Total Operating Revenues increased by 40% to €270.3m whilst passenger volumes
increased by 37% to 4.3m.
Scheduled Passenger Revenues increased by 39% to €238.3m, reflecting the
increase in passenger volumes arising from the successful launch of new routes
and the new base at Frankfurt-Hahn. Revenues were further enhanced by a 1% rise
in average fares during the quarter.
Ancillary Revenues increased by 49% to €32.0m, which is higher than the growth
in passenger volumes, and reflects strong growth in all areas of ancillary
revenues particularly car hire, hotel, travel insurance and internet related
activities.
Total Operating Expenses increased by 22% to €148.2m due to the increased level
of activity, and the increased costs primarily staff, depreciation, fuel and
airport & handling costs associated with the growth of the airline.
Staff costs have increased by 19% to €23.3m. This increase reflects a 7%
increase in average employee numbers to 1,676. Pilots, who earn higher than the
average salary, accounted for 61% 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. Furthermore staff
costs rose due to the impact of pay increases granted which were between 3% and
5%.
Depreciation and Amortisation increased by 35% to €19.5m due to an increase in
the number of aircraft owned from 36 to 44 and the amortisation of capitalised
maintenance costs, offset by savings arising from the increase in the number of
fully depreciated aircraft.
Fuel costs rose by 25% to €34.8m due to a 29% increase in the number of hours
flown, the adverse impact of the strengthening of the US dollar to the Euro,
offset by a lower US$ cost per gallon of fuel and an improvement in the fleet
fuel burn rate due to a higher proportion of 737-800 aircraft operated.
Maintenance costs increased by 13% to €7.7m reflecting an increase in the size
of the fleet operated, an increase in the number of flight hours, offset by
maintenance savings arising from the increase in the number of 737-800 aircraft
operated.
Marketing and Distribution Costs decreased by 20% to €2.6m due to an increase in
the level of direct bookings via the internet, offset by increased marketing and
advertising costs associated with the launch of new routes and bases.
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 33% to €17.3m due to an increase in the basic unit
rate in some countries, and a 29% increase in the number of flight hours flown.
Airport and Handling Charges increased by 21% to €28.0m which is less than the
growth in passenger volumes and reflects the lower charges on our new European
routes and at our new bases.
Other Expenses increased by 25% to €15.0m, which is less than the growth in
ancillary revenues reflecting improved margins on some new and existing products
and continued cost control on other indirect costs.
Operating Profits have increased by 69% to €122.1m due to the reasons outlined
above.
Interest Receivable increased by €1.6m to €9.0m reflecting the strong growth in
cash resources arising from the profitable trading performance. Interest
Payable increased by €3.1m to €7.7m due to the increased level of debt arising
from the acquisition of new aircraft.
Foreign exchange gains of €1.9m arose on the conversion of sterling bank
balances at period end rates.
Taxation increased 32% to €13.4m, less than the growth in profits primarily due
to the continued decline in the headline rate of Corporation Tax in Ireland.
Notes to the Financial Statements
1. Accounting Policies
The accounting policies followed in the preparation of these consolidated
financial statements for the half year ended September 30, 2002 are consistent
with those set out in the Annual Report for the year ended March 31, 2002.
2. Approval of the Financial Statements
The Audit Committee approved the consolidated financial statements for the
Quarter and Half Year ended September 30, 2002 on October 31, 2002.
3. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the Quarter and Half Year
ended September 30, 2002 are based on the results reported under Irish and UK
GAAP.
Independent review report by KPMG to Ryanair Holdings plc
Introduction
We have been instructed by the company to review the financial information set
out on pages 1 to 7 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Irish Stock Exchange which require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where they are to be
changed in the next annual accounts in which case any changes, and the reasons
for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board. A review consists principally of making enquiries of group management
and applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise disclosed. A
review is substantially less in scope than an audit performed in accordance with
Auditing Standards and therefore provides a lower level of assurance than an
audit. Accordingly we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2002
KPMG
Chartered Accountants 31 October 2002
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