Ryanair H1 Profit Climbs On Gain, Higher Traffic; Lifts FY16 View

(RTTNews) - Irish airline Ryanair (RYA.L, RYAAY) reported Monday significant growth in its first-half profit, benefited by gain from Aer Lingus stake sale, and higher traffic and load factor. Looking ahead, the company now expects fiscal 2016 adjusted profit towards the upper end of forecast range and also lifted traffic forecast.

For the first half, profit before tax climbed to 1.56 billion euros from 907.5 million euros last year. The latest results included exceptional accounting gain of 317.5 million euros on sale of Aer Lingus shareholding. Adjusted pre-tax profit was 1.24 billion euros, up 37 percent from last year.

Profit after tax increased to 1.41 billion euros from 795.0 million euros, a year ago. Earnings per ordinary share in euro cent was 102.66 compared to 57.29 prior year.

Adjusted profit after tax for the half-year was 1.09 billion euros, compared to 795 million euros, a year ago. Adjusted earnings per share were 0.80 euro, compared to 0.57 euro last year.

Revenue was 4.04 billion euros, 14 percent higher than 3.54 billion euros, a year ago.

Traffic grew 13 percent to 58.1 million customers from last year's 51.3 million, as load factor jumped 4 percent points to 93 percent. Average fares rose 2 percent as unit costs fell 6 percent, while ex-fuel unit costs were flat.

Ryanair's CEO, Michael O'Leary, said, "We have enjoyed a bumper summer due to a very rare confluence of favourable events including stronger sterling, adverse weather in northern Europe, reasonably flat industry capacity and further savings on our unhedged fuel, as millions of customers switched to Ryanair for our Always Getting Better customer experience programme."

Looking forward, the company now expects its full year net profit, pre-exceptions, to be towards the upper end of its 1.175 billion euros to 1.225 billion euros range. However, the company cautioned that the guidance is heavily dependent on the strength of close-in bookings in fourth-quarter, where it has almost zero visibility yet planning to deliver 22 percent traffic growth.

Further, the company has raised its fiscal 2016 traffic target to 105 million from 104 million customers due to higher load factors in the second half with third-quarter traffic set to grow 17 percent and fourth quarter by 22 percent.

As forward pricing has softened in recent weeks, the company expects third-quarter average fares will be broadly flat against last year, but fourth quarter fares, with almost zero visibility, will fall by approximately 4 percent.

Looking beyond the current year, based on its stronger than expected load factors, the company has raised long term traffic target from 160 million to 180 million customers p.a. by FY24.

In London, Ryanair shares were losing 1.63 percent to trade at 13.27 euros.