Exceptionals take Ryanair operating profit into first annual loss

Ryanair has reported a full year net profit of €105 million before exceptional items for the year ended 31 March 2009. Inclusion of the exceptional items leaves an annual loss of €169.2 million, a first for the carrier.

In a year where fuel costs rose by €466m (+59%) to €1,257 million, revenues rose by 8% to €2,942 million as air fares fell by 8% and traffic grew 15% to 58.5 million. Ryanair is now Europe’s largest airline having overtaken Air France, BA and Lufthansa in terms of passenger numbers and market capitalisation.

The exceptional items in the year ended 31 March 2009 amounted to €274.1m (2008: €90.2m). These comprised a €222.5m (2008: €91.6m) impairment of the company’s Aer Lingus shareholding and an accelerated depreciation charge of €51.6m (2008: €10.6m) on aircraft disposed in the financial year 2008 and 2009 and for agreements to dispose of aircraft  in the financial year 2010, plus a gain of €12.1m in the year ended 31 March 2008 on aircraft disposed in the financial year 2008.

So while the adjusted profit excluding exceptional items decreased by 78% to €105.0m, the exceptional items created the loss for the year of €169.2m compared to a profit of €390.7m in the year ended 31 March 2008.

Announcing these results Ryanair’s CEO, Michael O’Leary, commented, “Despite the global recession and record high oil prices Ryanair’s lowest-fare/lowest-cost airline services again delivered traffic growth and profitability which demonstrates the fundamental strength of the Ryanair model.

“The principal highlights of the past year included: after tax profit of €105m; traffic growth of 15% to 59m; 18 net new aircraft (the year-end fleet being 181 Boeing 737-800s); six new bases at Alghero, Birmingham, Bologna, Bournemouth, Cagliari, and Edinburgh; 223 new routes; the EU’s Charleroi state aid decision dismissed by the European courts; and passenger service further improved (No 1 on time major airline).

“To deliver a net profit of €105m (although a disappointing €376m decline over last year’s figure) was a robust performance during a year of record high oil prices when our fuel bill jumped by €466m (up 59%). In a year when most airline competitors announced large losses, Ryanair’s profit exceeded our previous guidance. The recession and declining consumer confidence is proving to be good for Ryanair’s growth, as millions of passengers switch to our lower fares. Ryanair will continue to lower fares to stimulate traffic growth, maintain high load factors and win more shorthaul traffic from our high fare competitors.

“Ancillary revenues grew by 23% to €598m. We have now achieved our target of 20% of revenues (18% last year) one year ahead of schedule. Our onboard mobile telephony service trial commenced at the end of February and is now available on over 40 aircraft based in Ireland and Italy. Early indications prove that consumers love this service and penetration rates continue to rise. While initial revenues will be small, we believe that inflight communications will make a meaningful contribution to ancillary profit growth in future years if this trial proves successful.”