A strong first-half showing from Ryanair (RYA) was a given after it hiked full-year profit expectations by a quarter in September to between €1.175bn and €1.225bn, citing higher fares, solid passenger growth and lower fuel costs. This last point certainly helped during the period. The cost of operating its planes was flat year on year without fuel, but dropped 6 per cent including fuel. And the benefits should continue now that management has hedged 95 per cent of its fuel for the year to March 2017 at $62 per barrel.
The removal of unpopular charges as part of its 'always getting better' strategy seems to be having the desired effect. Passenger traffic rose 13 per cent to reach 58m customers, which, coupled with lower costs, helped push operating profit up a whopping 35 per cent to €1.26bn.
Oddly, the shares fell 4 per cent in early trading, but more than recouped those losses to finish the day up 3 per cent. Perhaps the market does believe management's new target for full-year passenger numbers of 105m, up from previous guidance of 104m and 16 per cent higher than last year's 90.6m. Between now and 2024, the company plans to buy 380 new Boeing 737 aircraft, with the eventual aim of carrying 180m passengers a year.
Prior to these results, analysts at JPMorgan Cazenove expected pre-tax profit of €1.36bn for the full year, leading to EPS of 89¢, compared with €982m and 62¢ in FY2015.
| RYANAIR (RYA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,339¢ | MARKET VALUE: | €17.7bn | |
| TOUCH: | 1,337-1,339¢ | 12-MONTH HIGH: | 1,430¢ | LOW: 783¢ |
| DIVIDEND YIELD: | nil* | PE RATIO: | 12 | |
| NET ASSET VALUE: | 343¢ | NET CASH: | €976m | |
| Half-year to 30 Sep | Turnover (€bn) | Pre-tax profit (€bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 3.54 | 0.91 | 57.4 | nil |
| 2015 | 4.04 | 1.56 | 103.2 | nil |
| % change | +14 | +72 | +80 | - |
*Does not include the €398m company plans to return to shareholders from Aer Lingus sale | ||||
