6-K
1
a8696g.htm
RYANAIR REPORTS Q1 PROFITS OF 663M
a8696g
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 July 2023
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 REPORTS Q1 PROFITS OF €663M
STRONG EASTER & WEAK PRIOR YEAR COMPS.
DUE TO UKRAINE INVASION
Ryanair Holdings today (24 July) reported Q1 profits of
€663m, compared to a Ukraine affected prior year Q1 PAT of
€170m thanks to a strong Easter, the extra UK (Coronation)
public holiday in May and weak PY comps. due to Russia's invasion
of Ukraine in Feb. 2022 which damaged last year's Q1 traffic and
fares.
30 Jun. 2022
30 Jun. 2023
Change
Customers
45.5m
50.4m
+11%
Load Factor
92%
95%
+3pts
Revenue
€2.60bn
€3.65bn
+40%
Op. Costs
€2.38bn*
€2.94bn
+23%
PAT
€170m*
€663m
+290%
EPS (euro cent)
16.53
58.22
+252%
* Non-IFRS financial measure, excl. €18m except. unrealised
mark-to-market net gain on jet fuel caps.
● 119x
B737-8200 "Gamechangers".
Total fleet of 558 aircraft at 30 Jun.
● 3
new bases & 190 new routes opened for S.23.
● Fuel
hedging extended - 75% FY24 at $89bbl & 27% FY25 at $74bbl (via
swaps).
● Net
cash of €0.98bn (31 Mar.: €0.56bn). Ratings upgraded to
BBB+.
● 300x
MAX-10 order in May to renew fleet & grow traffic to 300m p.a.
by FY34.
Ryanair's Michael O'Leary, said:
ENVIRONMENT:
"Every customer switching to Ryanair from high fare EU legacy
carriers can reduce their emissions by up to 50% per flight.
We continue to invest heavily in new technology aircraft.
During Q1 we took delivery of 21 fuel efficient, B737-8200
"Gamechangers"
(4% more seats, 16% less fuel & CO2 and
40% quieter). In May, we signed a deal with Repsol to supply
SAF to Ryanair bases in Spain. This builds on similar SAF
arrangements with OMV, Neste & Shell and puts the Group on
track to achieve its ambitious 2030 goal of powering 12.5% of
Ryanair flights with SAF - with 9.5% already
secured.
The most significant environmental initiative Ryanair can deliver
near term, is to press for urgent reform of Europe's inefficient
ATC system. In May we submitted a petition to the European
Commission, signed by over 1m of our customers, calling on the EU
to protect "overflights" during
national ATC strikes. We believe this would reduce flight
delays, cut flight times, and unnecessary CO2 emissions.
Over the past 6 months, French ATC alone, has held 60 days of
strikes, during which the French Govt. used min. service laws to
protect local/domestic flights while disproportionately cancelling
overflights. We, and our customers, call on the EC President,
Ursula von der Leyen, to protect the single market for air travel
and minimise the impact of ATC strikes on EU citizens (while
respecting the right of ATC unions to strike) by insisting that
national Govt.'s protect overflights, as is already the case in
Greece, Italy and Spain.
Today, we are proud to launch Ryanair's 2023 Sustainability Report
("Aviation with Purpose"). Our recent $40bn order for 300
Boeing MAX-10 aircraft (21% more seats, 20% less fuel and 50%
quieter) will enable us to pursue even more ambitious environmental
targets over the next decade. We have reset our
CO2 per
pax/km target at a very ambitious 50 grams by 2031 (previously 60
grams by 2030). We have also published the Group's 1.5 degree
Climate Transition Plan.
SOCIAL:
As the Ryanair Group traffic grows to 300m p.a. by FY34, we expect
to create over 10,000 new, well-paid, jobs for highly trained
aviation professionals. To facilitate this growth as we take
delivery of 90 more Gamechangers and 300 MAX-10s, we recently
ordered 12 new CAE simulators (6 firm and 6 options worth over
$120m). Building on the success of our new state-of-the-art
aviation training centre in Dublin, we have finalised plans to
develop 2 similar excellence centres to accelerate crew training in
both Central Europe (Krakow) and the Iberian Peninsula. We
are also upgrading our UK training centre in
East-Midlands.
This summer, in anticipation of increased ATC disruptions, we
invested heavily in operational resilience (increased crew ratios,
doubled the size of our Dublin and Warsaw ops centres, enhanced our
day-of-travel app. and continuously improving our live customer
comms.) to ensure that our passengers and crew continue to enjoy
Ryanair's industry leading OTP and reliability. This
investment has been rewarded with a strong Q1 CSAT score of 85% (up
2pts on our PY Q1), with "crew
friendliness" continuing to be
our top score (rated over 90%).
GROWTH:
We are operating our largest ever summer schedule (over 3,200
flights and up to 600,000 passengers daily). We have opened 3
new bases (Belfast, Lanzarote & Tenerife) and over 190 new
routes, further growing our No.1 or No. 2 share in the Italian,
Polish, Spanish and UK markets. We have recently announced plans to
fly to/from Albania this winter, expanding our CEE footprint
offering competition, choice and lower fares than the incumbent
carrier. Structural EU capacity reductions following numerous
EU airline failures or fleet reductions during Covid, volatile oil
prices (discouraging weaker, unhedged, airlines from adding
capacity), a shortage of aircraft (new and leased), the return of
Asian traffic and this year's very strong influx of American
visitors to Europe (helped by a strong US$) means that European
short-haul capacity remains constrained this summer. H1
demand is robust and fares remain ahead of last year as we move
into peak S.23 although this trend seems weaker in Q2 than it was
in Q1.
European airlines will continue to consolidate over the next 2-3
years, with the takeover of ITA (Italy) and the sale of TAP
(Portugal) already underway. The large backlog of OEM
aircraft deliveries is likely to constrain capacity growth in
Europe for at least the next 4 years, which will enable Ryanair to
further extend our market share gains as we take delivery of almost
100 Gamechangers over the next 3 summers. Our unit cost
advantage over EU competitors, fuel hedging, strong balance sheet
and low-cost aircraft orders out to 2033, coupled with our industry
leading operational resilience, creates significant growth
opportunities for Ryanair over the coming years as we grow traffic
to 300m p.a. by FY34.
Q1 FY24 BUSINESS REVIEW:
Revenue & Costs
Q1 scheduled revenues increased 57% to €2.47bn. Traffic
grew 11% to 50.4m and ave. fares rose 42% to €49 thanks to a
strong Easter (the PY Q1 was badly damaged by the Ukraine invasion
of Feb. 2022) and an extra UK (Coronation) public holiday in
May. Ancillary revenue increased 15% to €1.18bn
(c.€23.30 per passenger). Total Q1 FY24 revenue
therefore rose 40% to €3.65bn. Total operating costs
increased 23% to €2.94bn, primarily due to higher fuel (+30%
to €1.34bn), staff costs (reflecting restoration of pay cuts,
pre-agreed pay increases and higher crewing ratios as we invest in
op. resilience) and higher ATC fees (incl. in airport &
handling charges). Despite a modest increase in unit
costs (ex-fuel) to just under €32 in Q1, Ryanair's cost
advantage over EU competitors continues to
widen.
FY24
fuel requirements are almost 85% hedged at approx. $89bbl (with a
mix of swaps and caps) and FY25 hedging has increased to 27% at
approx. $74bbl. Over 90% of FY24 €/$ opex is hedged at
1.08 and approx. 50% of FY25 is hedged at 1.12. Our
B-8200 "Gamechanger" order book is fully hedged at €/$1.24
(locking in significant cost savings as we take delivery of these
more fuel efficient and quieter aircraft).
Balance Sheet & Liquidity
Ryanair's balance sheet is one of the strongest in the industry
with a BBB+ credit rating and over €4.8bn gross cash at
quarter end, despite over €1bn capex. Net cash
increased to €0.98bn at 30 June (€0.56bn at 31
Mar.). Substantially all of the Group's B737 fleet is
unencumbered, which significantly widens our cost advantage as
interest rates and leasing costs continue to rise for competitors.
We are on track to repay our second 2023 bond of
€750m as it falls due in Aug. and €2.8bn FY24 capex
(incl. peak Gamechanger capex and a MAX-10 signing deposit) from
internal cash resources.
Our Board strategy, as our business recovers, is to firstly
prioritise pay restoration and multi-year pay increases for our
people. Secondly, we will pay down maturing debt as it falls
due over the next 3 years, while at the same time funding our
ambitious aircraft capex, from internally generated
cashflows. Once we are confident that we can fully fund these
large commitments, the Board will then consider restarting modest
returns to shareholders, who supported Ryanair during the Covid
pandemic. We are conscious that our shareholders invested
just over €400m during our Sept. 2020 share placing (during
the depth of the Covid crisis), and this was key to Ryanair
subsequently issuing an €850m bond which helped us to survive
the devastating impact of the Covid pandemic on
travel.
FLEET:
Our Gamechanger fleet stood at 119 at quarter end and we expect to
increase this to 124 by the end of July. We expect to take
delivery of 49 B-8200s (173 in total) by year-end (Mar.
2024). As previously noted, Boeing has suffered multiple
supply chain challenges, causing repeated delivery delays. We
have worked closely with Boeing to minimise these delays, and the
disruption to our schedules and traffic targets. We had
originally expected 51 aircraft deliveries on/before 30 April, but
the last of these deliveries was delayed into July. We hope
that our winter 2023/spring 2024 deliveries will be less impacted,
but already there are indications from Boeing that some deliveries
may be delayed from April 2024 to June 2024.
In May, Ryanair signed an order with Boeing to purchase 300 Boeing
MAX-10 aircraft (150 firm and 150 options) which, subject to
shareholder approval at our Sept. AGM, will deliver between 2027
and 2033. These aircraft have 39 more seats (228 v 189 on the
Boeing 737NG), but deliver 20% lower fuel consumption, 20% less
CO2 emissions
and are 50% quieter. The additional seats, apart from
increasing revenue growth, will further widen Ryanair's unit-cost
advantage over European competitors for the next 20 years. We
expect up to 50% of the order will be used to replace older NGs,
while the remainder will facilitate controlled (but slower) traffic
growth to approx. 300m p.a. by FY34. Given the strength of
the Group's balance sheet, we anticipate that most of this capex
will be funded primarily from internal resources (although the
Group will remain opportunistic in its financing
strategy).
OUTLOOK:
We expect FY24 traffic to grow to approx. 183.5m (up 9%), which is
slower than the 185m originally expected, due to Boeing delivery
delays in spring and in autumn 2023. While the cost gap
between Ryanair and competitor airlines continues to widen, as
previously guided, we expect to see an increase of approx. €2
in ex-fuel unit costs this year due to annualised crew pay
restoration, higher crew ratios, increased ATC & route charges
and the impact of Gamechanger delivery delays. While Q2
bookings are strong, the fare increase in Q2 will be much lower
than in Q1 due to much stronger PY Q2 pricing in FY23 when peak
summer travel snapped back strongly following the Ukraine
invasion. We currently expect Q2 fares will be higher than
the prior year Q2 but by a low double digit percentage. We
noted a softening in close-in fares in late June and early
July. The final H1 outcome is, therefore, highly dependent on
close-in Aug. and Sept. bookings. As is normal at this time
of year, we have very limited Q3 visibility and zero Q4
visibility. Having enjoyed a bumper Christmas and New Year
travel period last year (the first festive travel season that
wasn't curtailed by the Covid pandemic), we are conscious that
consumers may require some fare stimulation to fill our 25% greater
seat capacity this winter (compared to pre-Covid) following months
of rising mortgage rates and consumer price inflation. If this
transpires, then Ryanair's load active/yield passive strategy,
coupled with our industry leading cost base, will uniquely position
our Group to capture further market share, albeit at lower fares
this winter.
Despite uncertainty over H2 Boeing deliveries, accentuated recently
by the collapse of a Yellowstone River bridge in Montana, a
significantly higher fuel bill (up €1bn over last year),
volatile oil prices for our unhedged fuel, very limited H2
visibility and the risk of tighter consumer spending this winter,
we remain cautiously optimistic that FY24 PAT will be modestly
ahead of last year. It is, however, still too early to
provide meaningful FY24 PAT guidance. We hope to be in a
position to do so at our H1 results in Nov."
ENDS
Ryanair Holdings plc, Europe's
largest airline group, is the parent company of Buzz, Lauda, Malta
Air, Ryanair & Ryanair UK. Carrying up to 184m guests p.a. on
approx. 3,200 daily flights from 91 bases, the Group connects 230
airports in 36 countries on a fleet of 560 aircraft, with almost
390 Boeing 737s on order, which will enable the Ryanair Group to
grow traffic to 225m p.a. by FY26 & 300m p.a. by FY34. Ryanair
has a team of over 22,000 highly skilled aviation professionals
delivering Europe's No.1 operational performance, and an industry
leading 38-year safety record. Ryanair is Europe's
greenest, cleanest, major
airline group and customers switching to fly Ryanair can reduce
their CO₂ emissions by up to 50% compared to major European
legacy airlines.
For further information
please contact:
www.ryanair.com
Neil Sorahan
Ryanair Holdings plc
Tel: +353-1-9451212
Paul Clifford
Drury
Tel: +353-1-260-5000
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 the
replacement of 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, post-Brexit uncertainties, weather related disruptions,
ATC strikes and staffing related disruptions, delays in the
delivery of contracted aircraft, 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 U.K. and Continental
Europe, the general willingness of passengers to travel and other
economics, social and political factors, global pandemics such as
Covid-19 and unforeseen security events.
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.
