SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of January, 2005
RYANAIR HOLDINGS PLC
(Translation of registrant's name into English)
c/o Ryanair Ltd Corporate Head Office
Dublin Airport
County Dublin Ireland
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F..X.. Form 40-F.....
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934.
Yes ..... No ..X..
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ________
RYANAIR BEATS ITS EXPECTATIONS.
Q3 NET PROFIT OF EUR35m - TRAFFIC GROWS 13% TO 6.9M
Ryanair, Europe's No.1 low fares airline today (Monday, 31st January 2005)
announced a Net Profit after tax of EUR35.0m for the 3rd Quarter ended 31
Dec 2004. Passenger volumes grew by 13% to 6.9m whilst yields were in line
with the same Quarter last year, and as a result, total revenues rose by
15% to EUR294.4m. Unit costs rose by 26% due to the increase in the level
of activity and in particular higher fuel and route charges. During the
Quarter, maintenance provisions of EUR4.5m (net of tax) were released to
the profit and loss due to the earlier than scheduled return of 6 leased
737-300's. As a result Q3 net profit declined by 26% and the Q3 profit
margin after tax declined by 7 points to 12%.
Summary Table of Results (Irish GAAP) - in Euro
Quarter Ended Dec 31, Dec 31, %
2003 2004 Increase
Passengers 6.1m 6.9m +13%
Revenue EUR255.0m EUR294.4m +15%
Profit after tax EUR47.5m EUR35.0m - 26%
(Note 1)
Basic EPS (Euro EUR6.27c EUR4.61c - 26%
Cents) (Note 1)
Note 1:Adjusted profit after tax and EPS excludes the exceptional costs of
EUR6m (net of tax) arising from the earlier than planned retirement of 6
Boeing 737-200 aircraft during the Quarter to 31 December 2003, and a
goodwill charge of EUR0.6m in 2003 and EUR0.5m in 2004.
Announcing these results Ryanair's Chief Executive, Michael O'Leary, said:
"These quarterly results are a testimony to the strength of the Ryanair
"lowest cost" model which - even during the most difficult trading
conditions (including record fuel prices and intense competition) - delivers
strong passenger growth and profits. We continue, like Southwest, to
maintain our record of 31 consecutive quarters of unbroken profitability
(before exceptionals) since we floated in May 1997.
"As predicted, casualties continue in the European industry, most notably
Volare, VBird and Air Polonia. Hapag Lloyd Express, MyTravel Lite and Basiq
Air have announced significant reversals of capacity back into their charter
operations, while many of Europe's flag carriers (most notably Alitalia and
SAS) have announced record losses. This is not a temporary phenomenon
resulting from high oil prices, but a permanent market shift towards low
cost air travel, led by Ryanair. Only the lowest cost airlines like
Southwest in the US and Ryanair in Europe will prosper over the medium term
and we expect further casualties, cut backs and withdrawals among our loss
making competitors.
"Despite intense competition, yields were similar to those achieved last
year and better than our previous guidance of a decline of between 5% to
10%. We believe this is due to capacity removals by competitors and the
continuing impact of multiple fuel surcharges imposed by many of our high
fare competitors, which have made Ryanair's low fares even more attractive
to European consumers.
"Fuel prices remain high and will continue to impact our future guidance.
Our fuel hedges expired at the end of October 2004 and we were unhedged
during November, however as forward prices fell, we restarted our hedging
programme for this Winter season. We are almost 100% hedged at an average of
$41 per barrel for Brent crude for the 4th Quarter and are unhedged
thereafter. Lower than expected fuel prices also had a positive impact on
our Quarter 3 results when fuel costs were EUR4m better than our previous
guidance. We expect our Q4 fuel costs to be EUR5m lower than the previous
guidance. We still see value in hedging to remove uncertainty from our
business and will continue to review our hedging policy as forward oil
prices return to more "normal" levels.
"Advance bookings for Q4 indicate that traffic growth is in line with
expectations. With some 50% of the seats sold (and assuming no adverse
movement in exchange rates) we expect yields may now rise by up to 5% for
the Quarter. We would caution investors that this upturn in yield is more a
reflection of the precipitous 22% decline in the comparable Q4 yields last
year, slower capacity growth and an earlier Easter, rather than some
significant current price recovery. As we review Q4 of last year, it appears
to have been an exceptional result with yields collapsing due to the
combined effect of the war in Iraq, the threat of terrorism, high oil
prices, our own enormous capacity growth (+50%) and the market entry of many
irrational low fare (but not low cost) airlines in Europe, many of whom have
disappeared as quickly as they entered.
"Ryanair continues to grow strongly and profitably in spite of adverse
market conditions. The airline is now carrying 74% more traffic than it did
just two years ago (in Q3 of 2002). Ryanair is the No.1 or No.2 airline in
terms of market share in over 90% of our markets and we continue to maintain
world record profit margins despite significantly higher oil prices and
route charges. Our new bases in Luton, Liverpool and Shannon are booking
well for 2005, and we believe that our 21 new Spanish routes will also
perform strongly, particularly during the Summer months. We have (last week)
announced six new routes from Dublin to Biarritz and Carcassonne in France,
Frankfurt in Germany, Eindhoven in Holland, Doncaster in the UK and Rome in
Italy as a foretaste of what is on offer from Dublin if we get a second
competing terminal. Once again, we strongly urge the Taoiseach to press
ahead with the second terminal at Dublin airport. In addition, this morning
Ryanair will unveil its first 3 Italian domestic routes. The destinations
and fares will be announced at a press conference in Rome, which will herald
the end of Alitalia's domestic high fare monopoly in Italy.
"We support the development of a second runway at Stansted Airport, but are
united with all other Stansted users in opposing the GBP4bn. folly being
advocated by the BAA. The fact that price sensitive consumers are being
asked to cross subsidise almost GBP2bn. worth of unnecessary rail links and
motorways demonstrates how completely out of touch the BAA airport monopoly
has become. Ryanair and other Stansted users support the type of low cost,
second terminal and runway facilities developed by Manchester at a cost of
some GBP400m. But only a regulated monopoly like the BAA could possibly
propose spending ten times this sum on gold plating facilities that our
passengers neither need nor want. We call on the UK Government to break up
the BAA airport monopoly, which is now the world's most profitable airport
operator, because passengers need competition between the London airports if
British consumers and visitors are to continue to enjoy the lowest cost air
travel in Europe.
"The initial trial of our inflight entertainment system has been
disappointing. Whilst the trial period was hampered by the lack of content
in non-English languages, the uptake among passengers has been lower than
expected. We have now resolved these service issues with the content
provider, but unless we see a significant improvement in customer take up,
we will not roll out the system across the entire fleet as planned. We
remain believers in the potential of inflight entertainment however, as
initially with CD's and the IPod, it may take some time for the travelling
public in Europe to catch on to the technology. Should we decide to
discontinue with IFE at the end of our extended trial period, Ryanair will
suffer no financial loss whatsoever.
"We continue our cautious outlook for Quarter 4 and the full year outturn.
Whilst yields and fuel prices are now somewhat better than originally
forecast, Sterling has weakened appreciably and this will have a downward
impact on yields. In Quarter 4 last year we suffered a 22% collapse in
average fares, however based on current booking trends we now expect that Q4
yields this year might be as much as 5% higher than last year. Despite
higher route and fuel charges, we continue to deliver the highest net
margins in the industry and we therefore believe that Ryanair's lowest cost
model will continue to grow and prosper across Europe to the benefit of our
passengers, people and our shareholders".
ENDS. Monday, 31st January 2005
For results and further Howard Millar Pauline McAlester
information 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 217 low fare routes
across 19 countries. Ryanair operates a fleet of 79 aircraft, and firm
orders for up to a further 85 new 737-800's which will be delivered over the
next 5 years. Ryanair currently employs a team of 2,600 people and expect to
carry approximately 27.5 million scheduled passengers in the current year.
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance with UK and Irish GAAP
(unaudited)
Quarter Quarter Nine months Nine months
ended ended Ended ended
Dec 31, 2004 Dec 31, 2003 Dec-31, 2004 Dec-31, 2003
EUR'000 EUR'000 EUR'000 EUR'000
Operating Revenues
Scheduled revenues 246,712 216,424 864,356 739,964
Ancillary revenues 47,732 38,575 151,180 111,409
Total operating
revenues
-continuing
operations 294,444 254,999 1,015,536 851,373
Operating
expenses
Staff costs 34,824 29,506 104,083 90,984
Depreciation
and amortisation 26,056 25,009 70,960 71,728
Other operating
expenses
Fuel & Oil 72,486 43,128 186,236 127,474
Maintenance,
materials and repairs 2,323 8,796 27,221 30,983
Marketing and
distribution costs 2,625 1,045 13,400 11,028
Aircraft rentals 7,400 2,730 23,636 6,450
Route charges 33,389 27,442 101,315 80,331
Airport and
Handling charges 44,243 38,123 134,565 110,202
Other 22,428 19,083 69,933 58,769
Total operating
expenses 245,774 194,862 731,349 587,949
Operating
profit before
exceptional
costs, and goodwill 48,670 60,137 284,187 263,424
Aircraft
retirement costs - (6,773) - (9,491)
Buzz re-organisation costs - - - (3,012)
Amortisation of
goodwill (530) (586) (1,702) (1,757)
(530) (7,359) (1,702) (14,260)
Operating
profit after exceptional
costs, and goodwill 48,140 52,778 282,485 249,164
Other income/
(expenses)
Foreign
exchange
(losses)/gains (2,076) (581) (2,835) 852
Gain/(loss) on
disposal of
fixed assets - - 6 (8)
Interest
receivable and
similar income 7,379 5,115 20,197 17,642
Interest
payable
and similar
charges (15,071) (12,499) (40,992) (35,302)
Total other
income/ (9,768) (7,965) (23,624) (16,816)
(expenses)
Profit before
taxation 38,372 44,813 258,861 232,348
Tax on profit
on
ordinary activities (3,877) (3,852) (24,257) (22,446)
Profit for the
period 34,495 40,961 234,604 209,902
Earnings per
ordinary share
-Basic(Eurocent) 4.54 5.40 30.89 27.72
-Diluted(Euro
cent) 4.51 5.33 30.70 27.41
Adjusted earnings per ordinary share*
-Basic(Euro 4.61 6.27 31.11 29.46
cent)
-Diluted(Euro
cent) 4.58 6.19 30.92 29.13
Number of
ordinary shares
(in 000's)
-Basic 759,775 758,608 759,499 757,143
-Diluted 764,438 767,928 764,127 765,779
* Calculated on Profit for the period before exceptional costs (net of tax), and
Goodwill.
Page 1
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheets in accordance with
UK and Irish GAAP (unaudited)
Dec 31, March 31,
2004 2004
EUR'000 EUR'000
Fixed assets
Intangible Assets 30,872 44,499
Tangible assets 1,845,452 1,576,526
Total fixed assets 1,876,324 1,621,025
Current assets
Cash and liquid resources 1,447,850 1,257,350
Accounts receivable 14,467 14,932
Other assets 18,608 19,251
Inventories 27,160 26,440
Total current assets 1,508,085 1,317,973
Total assets 3,384,409 2,938,998
Current liabilities
Accounts payable 89,439 67,936
Accrued expenses and other liabilities 317,049 338,208
Current maturities of long term debt 106,841 80,337
Short term borrowings 2,325 345
Total current liabilities 515,654 486,826
Other liabilities
Provisions for liabilities and charges 107,741 94,192
Other creditors 22,958 30,047
Long term debt 1,046,546 872,645
Total other liabilities 1,177,245 996,884
Shareholders' funds - equity
Called - up share capital 9,652 9,643
Share premium account 562,015 560,406
Profit and loss account 1,119,843 885,239
Shareholders' funds - equity 1,691,510 1,455,288
Total liabilities and shareholders' funds 3,384,409 2,938,998
Page 2.
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statements in accordance with UK and Irish GAAP
(unaudited)
Nine months Nine months
ended ended
Dec 31, Dec 31,
2004 2003
EUR'000 EUR'000
Net cash inflow from operating activities 346,724 295,459
Returns on investments and servicing of (19,266) (17,086)
finance
Taxation 3,418 207
Capital expenditure (including aircraft (342,161) (338,329)
deposits)
Acquisitions including onerous lease (2,218) (20,795)
payments
Net cash (outflow) before financing
and management of liquid resources (13,503) (80,544)
Financing 202,023 141,859
(Increase) in liquid resources (190,822) (108,139)
(Decrease) in cash (2,302) (46,824)
Analysis of movement in liquid resources
At beginning of year 1,231,572 982,352
Increase in period 190,822 108,139
At end of period 1,422,394 1,090,491
Analysis of movement in cash
At beginning of year 25,433 76,550
Net cash (outflow) during period (2,302) (46,824)
At end of period 23,131 29,726
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
EUR'000 EUR'000 EUR'000 EUR'000
Balance at 9,643 560,406 885,239 1,455,288
April 1, 2004
Issue of
ordinary equity 9 1,609 - 1,618
shares
Profit for the - - 234,604 234,604
period
Balance at Dec 9,652 562,015 1,119,843 1,691,510
31, 2004
Reconciliation of adjusted earnings per share (unaudited)
Quarter Quarter Nine months Nine months
ended ended ended ended
Dec 31, Dec 31, Dec 31, Dec 31,
2004 2003 2004 2003
EUR'000 EUR'000 EUR'000 EUR'000
Profit for the
period under UK 34,495 40,961 234,604 209,902
and Irish GAAP
Adjustments
Aircraft - 6,773 - 9,491
retirement
costs
Buzz - - - 3,012
re-organisation
costs
Amortisation of 530 586 1,702 1,757
goodwill
Taxation - (779) - (1,084)
adjustment for
above
Adjusted profit
under UK and 35,025 47,541 236,306 223,078
Irish GAAP
Number of
ordinary shares
(in 000's)
-Basic 759,775 758,608 759,499 757,143
-Diluted 764,438 767,928 764,127 765,779
Adusted
earnings per
ordinary
share
-Basic(EUR cent) 4.61 6.27 31.11 29.46
-Diluted(EUR cent) 4.58 6.19 30.92 29.13
Page 4
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance with US GAAP (unaudited)
Quarter Quarter Nine months Nine months
ended ended ended ended
Dec 31, 2004 Dec 31, 2003 Dec-31, 2004 Dec-31, 2003
EUR'000 EUR'000 EUR'000 EUR'000
Operating
Revenues
Scheduled 246,712 216,424 864,356 739,964
revenues
Ancillary 47,732 38,575 151,180 111,409
revenues
Total operating
revenues
-continuing
operations 294,444 254,999 1,015,536 851,373
Operating
expenses
Staff costs 34,784 29,286 103,963 90,344
Depreciation and
amortisation 26,857 25,009 72,539 71,728
Other operating
expenses
-Fuel & 72,486 43,128 186,236 127,474
Oil
Maintenance,
materials and 2,323 8,796 27,221 30,983
repairs
Marketing
and 2,625 1,045 13,400 11,028
distribution
costs
-Aircraft 7,400 2,730 23,636 6,450
rentals
-Route 33,389 27,442 101,315 80,331
charges
-Airport
and 44,243 38,123 134,565 110,202
Handling
charges
-Other 22,406 19,061 69,867 58,703
Total operating
expenses 246,513 194,620 732,742 587,243
Operating profit
before
exceptional 47,931 60,379 282,794 264,130
items
Aircraft
retirement costs - (6,773) - (9,491)
Buzz
re-organisation
costs - - - (3,012)
Operating profit
after exceptional
items 47,931 53,606 282,794 251,627
Other income/
(expenses)
Foreign exchange
(losses)/gains (2,076) (581) (2,835) 852
Gain/(loss) on
disposal of fixed
assets - - 6 (8)
Interest
receivable and
similar income 7,379 5,115 20,197 17,642
Interest payable
and similar
charges (12,972) (10,493) (35,057) (29,605)
Total other
income/(expenses) (7,669) (5,959) (17,689) (11,119)
Profit on
ordinary
activities
before taxation 40,262 47,647 265,105 240,508
Tax on profit on
ordinary
activities (4,145) (4,130) (25,014) (23,238)
Net income 36,117 43,517 240,091 217,270
Net income per
ADS
-Basic(Euro cent) 23.77 28.68 158.06 143.48
-Diluted(Euro
cent) 23.62 28.33 157.10 141.86
Adjusted net
income per ADS *
-Basic(Euro cent) 23.77 32.63 158.06 151.02
-Diluted(Euro
cent) 23.62 32.24 157.10 149.32
Weighted Average
number of
shares
-Basic 759,775 758,608 759,499 757,143
-Diluted 764,438 767,928 764,127 765,779
* Calculated on Net Income before non-recurring items (net of tax).
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 Nine months ended
Dec 31, Dec 31, Dec 31, Dec 31,
2004 2003 2004 2003
EUR'000 EUR'000 EUR'000 EUR'000
Profit as reported in
the consolidated profit
and loss accounts in
accordance with UK
and Irish GAAP 34,495 40,961 234,604 209,902
Adjustments
Pension 40 220 120 640
Amortisation of goodwill 530 586 1,702 1,757
Capitalised interest
(net of amortisation)
regarding aircraft
acquisition programme 1,298 2,006 4,356 5,697
Darley Investments 22 22 66 66
Limited
Taxation- effect of (268) (278) (757) (792)
above adjustments
Net income under US GAAP 36,117 43,517 240,091 217,270
(B) Consolidated
Cashflow Statements in
accordance with US
GAAP
Nine months ended
Dec 31, Dec 31,
2004 2003
EUR'000 EUR'000
Cashflow from operating
activities 330,876 278,580
Cash (outflow) from
investing activities (178,961) (932,690)
Cash inflow from
financial activities 204,003 144,997
Increase/(decrease) in
cash and cash
equivalents 355,918 (509,113)
Cash and cash
equivalents at beginning
of year 744,605 537,476
Cash and cash
equivalents at end of
period 1,100,523 28,363
Cash and cash equivalents under US
GAAP 1,100,523 28,363
Restricted cash 204,040 198,300
Deposits with a maturity
of between three and six
months 143,287 898,008
Cash and liquid
resources under UK and 1,447,850 1,124,671
Irish GAAP
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between UK, Irish and US generally
accepted accounting principles(unaudited)
(C) Shareholders' funds - equity
Dec 31, Dec 31,
2004 2003
EUR'000 EUR'000
Shareholders' equity as reported in the
consolidated balance
sheets (UK and Irish GAAP) 1,691,510 1,457,884
Adjustments:
Pension 3,320 3,751
Amortisation of goodwill 4,044 1,757
Capitalised interest (net of amortisation)
regarding 21,858 15,986
aircraft acquisition programme
Darley Investments Limited (85) (173)
Minimum pension liability (net of tax) (2,631) (2,656)
Unrealised losses on derivative financial
instruments (150,700) (54,968)
(net of tax)
Tax effect of adjustments (excluding pension &
derivative adjustments) (3,345) (2,467)
Shareholders' equity as adjusted to accord
with US 1,563,971 1,419,114
GAAP
Opening shareholders' equity under US GAAP 1,356,281 1,177,187
Comprehensive Income
Unrealised (losses)/gains on derivative
financial (34,019) 18,403
instruments(net of tax)
Net income in accordance with US GAAP 240,091 217,270
Total Comprehensive Income 206,072 235,673
Stock issued for cash 1,618 6,254
Closing shareholders' equity under US GAAP 1,563,971 1,419,114
Ryanair Holdings plc
Management Discussion and Analysis of Results
Introduction
For the purposes of the MD&A all figures and comments are by reference to the
adjusted profit and loss account excluding the exceptional costs and goodwill
referred to below.
Exceptional costs in the quarter ended December 31, 2003 consisted of EUR5.5m in
lease costs and additional depreciation of EUR0.6m arising from the earlier than
planned retirement of a sixth aircraft necessitated by the 'scribing' of these
aircraft (Note 4). Goodwill of EUR0.5m was amortised in the quarter compared to
EUR0.6m in the quarter ended December 31, 2003.
Profit after tax decreased by 16% to EUR34.5m during the quarter compared to the
same period last year. The adjusted profit for the quarter, excluding
exceptional costs and goodwill, decreased by 26% to EUR35.0m.
Summary Quarter ended December 31, 2004
Profit after tax decreased by 26% to EUR35.0m, compared to EUR47.5m in the
previous quarter ended Dec 31, 2003. Total operating revenues increased by 15%
to EUR294.4m, which was faster than the 13% growth in passenger volumes, as
fares were almost in line with last year and a continuation of the strong growth
in ancillary revenues. Total revenue per passenger has as a result increased by
2%, whilst the successful launch of new routes and the slower rate of growth
resulted in load factors increasing from 83% to 84% during the period.
Total operating expenses increased by 26% to EUR245.8m, due to the increased
level of activity, and the increased costs, primarily fuel, route charges and
airport & handling costs associated with the growth of the airline. Fuel, our
largest cost item, increased by 68% due to substantial increases in the US$ cost
per gallon, partially offset by the strengthening of the Euro to the Dollar.
Operating margins declined 7 points to 17%, which in turn resulted in Operating
profit decreasing by 19% to EUR48.7m. Excluding fuel costs operating margins
would have remained constant in both quarters. Profit before tax has declined by
25%, greater than the decline in operating profit due to the higher net interest
charge arising from the increased level of debt, and foreign exchange losses
which arose from the translation of sterling and US$ bank balances to euro at
the period end exchange rates. As a result, Net Margins declined by 7 points to
12% for the reasons outlined above.
Adjusted earnings per share have also declined by 26% to 4.61 cent for the
period.
Balance Sheet The Company continues to generate strong cashflow from operations
and year to date amounted to EUR346.7m. This cashflow part funded twelve
aircraft deliveries (six in the current quarter), additional aircraft deposits,
and the balance remaining is in turn reflected in the EUR190.5m increase in Cash
and Liquid Resources since March 31, 2004. Capital expenditure amounted to
EUR342.2m during the period whilst Long Term Debt, net of repayments, increased
by EUR200.4m. Shareholders' Funds at Dec 31, 2004 have increased by EUR236.2m to
EUR1,691.5m, compared to March 31, 2004.
Detailed Discussion and Analysis Quarter Ended December 31, 2004 Profit after
tax, decreased by 26% to EUR35.0m due to fuel costs increasing by 68% reflecting
the higher US$ cost per gallon, which was partially offset by stable fares and
strong growth in passenger volumes. Operating margins, in turn, have fallen by 7
points to 17% during the quarter, which has resulted in Operating profit
decreasing by EUR11.5m to EUR48.7m compared to quarter ended December 31, 2003.
Total operating revenues increased by 15% to EUR294.4m whilst passenger volumes
increased by 13% to 6.9m. Total revenue per passenger has increased by 2% in the
quarter due to a combination of higher average fares and strong ancillary
revenue growth.
Scheduled passenger revenues increased by 14% to EUR246.7m due to a combination
of a 1% improvement in average fares, increased passenger volumes on existing
routes, and the success of new bases at Rome-Ciampino and Barcelona-Girona. The
slower growth in seat capacity is also reflected in improved load factors, which
rose by 1% to 84% in the quarter.
Ancillary revenues increased 24% to EUR47.7m, a faster rate of growth than
passenger volumes, reflecting a strong performance in non-flight scheduled
revenues, car hire and other ancillary products. Ancillary revenues now account
for 16% of total revenues compared to 15% for the same period last year. Total
operating expenses increased by 26% to EUR245.8m due to the increased level of
activity, and the increased costs primarily fuel, aircraft rentals, route
charges, and airport and handling costs associated with the growth of the
airline. Total operating costs were also adversely impacted by a 9% increase in
the average sector length whilst higher US$ fuel prices were partly offset by
the strength of the euro exchange rate against the US$.
Staff costs have increased by 18% to EUR34.8m primarily due to a 13% increase in
average employee numbers to 2,671 and the impact of pay increases of 3% granted
during the period.
Depreciation and amortisation increased by 4% to EUR26.1m. Depreciation charges
increased due to an increase in the size of the 737-800 fleet from 41 to 53
('owned' fleet rose from 61 to 64), offset by lower amortisation charges due to
the retirement of 737-200 aircraft and the positive impact of a new engine
maintenance agreement on the cost of amortisation of 737-800 aircraft. The
strengthening of the euro to US$ also had a positive impact on the depreciation
and amortisation charge.
Fuel costs rose by 68% to EUR72.5m due to an increase in the number of sectors
flown, a 9% increase in the average sector length, and a significantly higher
average US$ cost per gallon of fuel partially offset by the positive impact of
the strengthening of the Euro to the US dollar during the period. Fuel costs
were also positively impacted by the recommencement of the Company's hedging
strategy for December and lower than expected fuel prices which resulted in a
saving of EUR4m.
Maintenance costs decreased by 74% to EUR2.3m reflecting the improved
reliability arising from the higher proportion of 737-800's operated and a lower
level of maintenance costs incurred due to the return of four BAE 146 aircraft
to KLM and the release of maintenance overhaul provisions of EUR5.2m during the
quarter associated with the earlier than scheduled return of six leased
737-300's. Marketing and distribution costs increased by EUR1.5m to EUR2.6m due
to increases in expenditure arising from the higher level of activity during the
quarter. Aircraft rental costs increased by EUR4.7m to EUR7.4m reflecting the
increased costs arising from the lease of thirteen 737-800 aircraft, of which
three were delivered in the current quarter, offset by the return of four BAE
146s to KLM earlier in the year and the return of six leased 737-800 aircraft
during the period.
Route charges increased by 22% to EUR33.4m due to an increase in the number
sectors flown, an increase in the average sector length and an increase in the
weight of the aircraft operated (which incur a higher charge).
Airport and handling charges increased by 16% to EUR44.2m, faster than the
increase in passenger volumes due to increased costs at certain existing
airports offset by lower costs at new airports, and the adverse impact of the
strength of the sterling exchange rate against the euro during the period.
Other expenses increased by 18% to EUR22.4m, which is less than the growth in
ancillary revenues due to improved margins on some new and existing products,
and cost reductions achieved on indirect costs.
Operating margins have declined by 7 points to 17%. Due to the reasons outlined
above operating profits decreased by EUR11.5m to EUR48.7m during the quarter.
Interest receivable has increased by EUR2.3m due to the combined impact of
higher levels of cash and liquid resources and an improvement in average deposit
interest rates earned in the quarter compared to last year. Interest payable
increased by EUR2.6m due to the drawdown of debt to part fund the purchase of
new aircraft.
Detailed Discussion and Analysis for Nine months ended December 31, 2004 Profit
after tax, increased by 6% to EUR236.3m driven by strong growth in passenger
volumes, whilst revenues per passenger were unchanged. This was offset by higher
costs specifically fuel (our largest cost item) which increased by 46%.
Operating profit increased by EUR20.8m to EUR284.2m compared to the nine months
ended December 31, 2003 despite Operating margins declining by 3 points to 28%
during the period.
Total operating revenues increased by 19% to EUR1,015.5m whilst passenger
volumes increased by 20% to 20.9m. Total revenue per passenger was unchanged
compared with the same period last year.
Scheduled passenger revenues increased by 17% to EUR864.4m due to a combination
of increased passenger volumes on existing routes, the successful launch of new
bases at Rome-Ciampino and Barcelona-Girona, and the commencement of 20 new
routes during the period, partly offset by a 2% reduction in average fares. The
strong growth in passenger volumes is also reflected in the improvement in the
load factor achieved, which rose from 83% to 86% during the period. Ancillary
revenues continue to perform strongly with revenues growing by 36% to EUR151.2m
in the period. This performance reflects the strong growth in non-flight
scheduled revenues, car hire and other ancillary products. Ancillary revenues
continue to grow at a faster rate than passenger volumes and now account for 15%
of total revenues compared to 13% last year.
Total operating expenses increased by 24% to EUR731.3m due to the increased
level of activity, and the increased costs primarily fuel, aircraft rentals,
route charges and airport and handling costs associated with the growth of the
airline. The increase in total operating expenses was also due to the
strengthening of the Sterling to Euro exchange rate partly offset by a stronger
Euro to US$ exchange rate.
Staff costs have increased by 14% to EUR104.1m. This increase primarily reflects
a 13% increase in average employee numbers to 2,578 and the impact of 3% pay
increases granted during the period.
Depreciation and amortisation declined by 1% to EUR71.0m. An additional twelve
737-800 aircraft were purchased during the period, however during the same
period the company retired 10 737-200 aircraft. The resultant higher
depreciation charge was offset by a combination of a lower amortisation charge
due to the retirement of 737-200 aircraft and the positive impact of a new
engine maintenance agreement on the cost of amortisation of 737-800 aircraft.
The strengthening of the euro to US$ also had a positive impact on both the
depreciation and amortisation charge.
Fuel costs rose by 46% to EUR186.2m due to a 21% increase in the number of hours
flown, a significant increase in the average US$ cost per gallon of fuel partly
offset by the positive impact of the strengthening of the Euro to the US$ during
the period.
Maintenance costs decreased by 12% to EUR27.2m reflecting an increase in the
size of the fleet operated, and an increase in the number of hours flown offset
by maintenance savings due to improved reliability arising from the higher
proportion of 737-800 operated. Four BAE 146 aircraft, which incurred higher
maintenance charges per aircraft operated compared to the remainder of the
fleet, were returned to KLM earlier this year. During the last quarter, six
leased 737-300 aircraft were returned earlier than scheduled, which in turn
enabled the company to release maintenance overhaul provisions of EUR5.2m.
Marketing and distribution costs increased by 22% to EUR13.4m due to higher
spend on promoting new routes and an increase in the level of activity during
the period.
Aircraft rental costs increased by EUR17.2m to EUR23.6m reflecting the increased
costs associated with the lease of thirteen 737-800 aircraft since December
31,2003 offset by the return to KLM of four BAE 146 aircraft earlier this year.
Six leased 737-300 aircraft were also returned to the lessor during quarter the
3rd quarter.
Route charges increased by 26% to EUR101.3m due to an increase in the number of
sectors flown, an increase in the average sector length, an increase in the
weight of the aircraft operated, (which incur a higher charge), and the negative
impact of the strengthening of sterling against the Euro during the period.
Airport and handling charges increased by 22% to EUR134.6m, slightly more than
the increase in passenger volumes due to increased costs at certain existing
airports offset by lower costs at new airports, and the adverse impact of the
strength of the sterling exchange rate against the euro during the period. Other
expenses increased by 19% to EUR69.9m, which is less than the growth in
ancillary revenues due to improved margins on some new and existing products,
and cost reductions achieved on indirect costs.
Operating margins have declined by 3% to 28% for the period reflecting the
substantial higher fuel prices increased and due to the reasons outlined above
operating profits increased by 8% to EUR284.2m.
Interest receivable has increased by 14% to EUR20.2m due to an increase in the
level of cash and liquid resources and an improvement in deposit interest rates
earned during the period compared to last year. Interest payable increased by
EUR5.7m due to the drawdown of debt to part fund the purchase of new aircraft
during the period.
The Company's Balance Sheet continues to strengthen due to the growth in profits
during the period. Capital expenditure amounted to EUR342.2m part funded by cash
generated from operating activities, whilst the excess cash of EUR190.5m is
reflected in the increase in cash and liquid resources to EUR1,447.9m at 31
December 2004. Long term Debt, net of repayments increased by EUR200.4m, which
was drawn down to part fund aircraft deliveries during the period.
Shareholders' Funds at December 31, 2004 have increased to EUR1,691.5m compared
to EUR1,455.3m at March 31, 2004.
Notes to the Financial Statements
1. -Accounting Policies
The accounting policies followed in the preparation of these consolidated
financial statements for the nine months ended December 31, 2004 are
consistent with those set out in the financial statements for the year ended
March 31, 2004.
2. -Approval of the Financial Statements
The Audit Committee approved the consolidated financial statements for the
Nine months ended December 31, 2004 on January 28th, 2005.
3. -Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the Quarter and Nine
months ended December 31, 2004 are based on the results reported under Irish
and UK GAAP.
4. -Aircraft retirement costs
Six aircraft were retired earlier than projected in 2003 due to the
detection of scratch marks ('scribing') that occurred during an aircraft
painting programme on these aircraft in 1995. It had been determined
that the cost of repairing these aircraft was uneconomic due to the
short remaining life of the aircraft. Accordingly the Company had
determined that the residual value of US$1m(EUR794k) for these aircraft
was excessive and as a result reduced it to EUR250k per aircraft. The
cost of this adjustment charge for five aircraft was reflected in the
results for the quarter ended September 30,2003, and the charge for a
sixth aircraft is expensed in quarter ended December 31, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
RYANAIR HOLDINGS PLC
Date: 31 January, 2005
By:___/s/ Howard Millar____
H Millar
Company Secretary & Finance Director