Covid-19
grounded the Group’s entire fleet from mid-March to the end
of June as EU Govts imposed flight or travel bans and widespread
population lockdowns. During this crisis, Group airlines
repatriated customers and operated rescue flights for many EU
Govts. The Group implemented extensive health measures, especially
onboard aircraft, to comply with EU guidelines (ECDC & EASA)
and on 1 July successfully resumed flights across most of our route
network operating up to 60% of prior year capacity in Q2 achieving
over 70% load factors. Passenger confidence and forward bookings
into W.20 were negatively impacted by the return of uncoordinated
EU Govt flight restrictions in Sep. and Oct. which heavily
curtailed travel to/from much of Central Europe, the UK, Ireland,
Austria, Belgium and Portugal. As a result, Ryanair recently cut
its FY21 traffic guidance to approx. 38m guests. This takes the
Group’s W.20 (Nov-Mar) capacity down from the previously
guided 60% to at most 40% of prior year traffic.
Ryanair’s
Customer Service teams (supported by Ryanair Labs) have cleared an
unprecedented volume of customer flight changes and Covid-19
cancellations, while processing a record backlog of refunds caused
by almost 4 months of EU Govt imposed flight cancellations. This
process was frustrated by unlicensed OTAs, many of who provided
false customer contact and fake payment details at the time of
booking. Despite the enormity of the task, almost all non-OTA
refund requests have now been dealt with either via cash refunds or
vouchers.
The
Covid-19 crisis has already caused the closure of a number of EU
airlines including Flybe, Germanwings and Level as well as deep
long-term capacity reductions at many others. It has sparked a
flood of illegal State Aid from EU Governments to their flag
carriers including Alitalia, Air France/KLM, LOT, Lufthansa, SAS,
TAP and others. This illegal State Aid will distort competition and
allow failed flag carriers to engage in below cost selling for many
years. We expect intra-European air travel capacity to remain
subdued for the next few years. This will create opportunities for
Ryanair (Europe’s lowest cost airline) to grow its network,
and expand its fleet, to take advantage of lower cost airport and
aircraft opportunities that will inevitably arise.
H1 BUSINESS REVIEW:
Revenue & Costs
Revenue
fell by 78% to €1.18bn as traffic fell 80% to 17.1m. With
almost zero Q1 traffic, the vast majority of H1 revenue was earned
in Q2. Ancillary revenue performed strongly as more guests chose
priority boarding and reserved seating.
During
the half-year substantial work has been undertaken to successfully
improve Ryanair’s long term cost leadership. The Group has
agreed modest pay cuts with our people and their unions which
helped minimise job losses. Lauda has been completely restructured,
better terms were agreed with our maintenance providers, lessors,
marketing & other suppliers and many airport deals were
renegotiated. Our Route Development teams are working with airports
partners across Europe who have suffered steep traffic declines and
discussions are ongoing with aircraft suppliers to amend pricing to
reflect the new Covid-19 reality. Due to significantly reduced W.20
traffic forecasts and ongoing aircraft delivery delays, the Group
recorded a €214m ineffectiveness charge on fuel and currency
hedges in H1.
Balance Sheet & Liquidity
Ryanair’s
balance sheet is one of the strongest in the industry with a BBB
credit rating (S&P and Fitch) and over €4.5bn cash at 30
Sep. Almost 80% of the Group’s fleet is unencumbered (with a
book value of over €7bn). Since March, the Group lowered cash
burn by cutting costs, participating in EU Govt payroll support
schemes, cancelling share buybacks and deferring non-essential
capex. In Sep., the Group raised €400m of equity and a 5-year
(unsecured) €850m eurobond with a 2.875% coupon (both
transactions were multiple times oversubscribed and keenly priced).
Cash was also boosted by €250m supplier reimbursements
received in Q2. This ensures that the Group is well financed to
deal with the Covid-19 crisis and removes refinancing risk as it
prepares to repay maturing debt over the coming year (CCFF
£600m in Mar. & €850m bond in Jun. 2021). This
financial strength enables the Group to capitalise on the many
growth opportunities that are available post Covid-19.
Boeing MAX update
It is
over 18-months since the Group was due to take delivery of its
first Boeing 737-MAX-200 aircraft. Boeing expect a calendar Q4
return to service for the MAX-8, allowing Ryanair to, hopefully,
accept delivery of its first MAX-200 in early 2021. We expect to
take delivery of approx. 30 MAXs before peak S.2021. While the
Group received supplier reimbursements in Q2, compensation
discussions will not be finalised or concluded with Boeing until
the MAX returns to service and revised delivery schedules can be
finalised and agreed. We remain committed to the Boeing 737,
particularly the new 200 series “gamechanger” aircraft
which have 4% more seats, 16% lower fuel burn and 40% lower noise
emissions. These new aircraft will enable Ryanair to grow to 200m
passengers p.a. over the next 5 or 6 years while lowering the cost
base and significantly reducing its environmental
footprint.
BREXIT:
The
risk of a no-deal Brexit remains high. We hope, before the end of
the Transition Period in Dec., that the UK and Europe will agree a
trade deal to cover air travel which will allow the free movement
of people and the deregulated airline market between the UK and
Europe to continue. As an EU airline group, Ryanair should be less
affected by a no-deal Brexit than our UK registered competitors.
However, we still expect Brexit to cause adverse trading
consequences. Ryanair has put the necessary measures in place to
ensure that the Group remains majority EU owned, including
restricting voting rights of non-EU shareholders, in the event of a
“hard-Brexit”. We therefore expect the Group’s
AOCs in Austria, Ireland, Malta and Poland to continue to operate
freely. In addition, Ryanair’s UK AOC (Ryanair UK) will be
able to benefit from any bilateral agreements negotiated between
the UK and non-EU countries while facilitating the operation of
domestic UK flights.
OUTLOOK:
FY21
will continue to be a hugely challenging year for Ryanair. Given
the current Covid-19 uncertainty, Ryanair cannot provide FY21 PAT
guidance at this time. The Group expects to carry approx. 38m
passengers in FY21, although this guidance could be further revised
downwards if EU Govts continue to mismanage air travel and impose
more uncoordinated travel restrictions or lock downs this winter.
The Group expects to record higher losses in H2 than in
H1.
As we
look beyond the Covid-19 crisis, and the emergence of effective
vaccines in early 2021, the Ryanair Group expects to have a lower
cost base, a stronger balance sheet, which will enable it to fund
lower fares, and add new lower cost aircraft to capitalise on the
many growth opportunities that will be available in all markets
across Europe, especially where competitor airlines have
substantially cut capacity or failed.
ENDS
For
further information
please
contact:
www.ryanair.com
Neil
Sorahan
Ryanair
Holdings plc
Tel: +353-1-9451212
Piaras
Kelly
Edelman
Tel: +353-1-6789333
Ryanair Holdings plc, Europe’s largest airline group, is the
parent company of Buzz, Lauda, Malta Air & Ryanair. Carrying
149m guests p.a. (pre Covid-19) on more than 2,100 daily flights
from 72 bases, the Group connects over 240 destinations in 40
countries on a fleet of 470 aircraft, with a further 210 Boeing
737s on order, which will enable the Ryanair Group to lower fares
and grow traffic to 200m p.a. over the next 5 or 6 years. Ryanair
has a team of over 16,000 highly skilled aviation professionals
delivering Europe’s No.1 on-time performance, and an industry
leading 35-year safety record. Ryanair is Europe’s greenest
cleanest airline group and customers switching to fly Ryanair can
reduce their CO₂ emissions by up to 50% compared to the other
Big 4 EU major airlines.
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, uncertainties surrounding Brexit, 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 UK 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.
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Balance Sheet as at September 30,
2020 (unaudited)
At Sep 30,
At Mar 31,
2020
2020
Note
€M
€M
Non-current assets
Property,
plant and equipment
10
9,266.2
9,438.0
Right-of-use
asset
217.7
236.8
Intangible
assets
146.4
146.4
Derivative
financial instruments
13
146.5
378.5
Deferred
tax
12.7
53.6
Total non-current assets
9,789.5
10,253.3
Current assets
Inventories
3.7
3.3
Other
assets
152.3
178.7
Current
tax
36.0
44.5
Assets
held for sale
11
72.5
98.7
Trade
receivables
32.7
67.5
Derivative
financial instruments
13
95.4
293.2
Restricted
cash
34.1
34.4
Financial
assets: cash > 3 months
1,516.1
1,207.2
Cash
and cash equivalents
2,952.1
2,566.4
Total current assets
4,894.9
4,493.9
Total assets
14,684.4
14,747.2
Current liabilities
Provisions
60.1
43.3
Trade
payables
1,390.7
1,368.2
Accrued
expenses and other liabilities
1,708.1
2,589.4
Current
lease liability
62.6
75.0
Current
maturities of debt
1,869.5
382.3
Derivative
financial instruments
13
568.1
1,050.0
Total current liabilities
5,659.1
5,508.2
Non-current liabilities
Provisions
30.9
36.6
Derivative
financial instruments
13
63.3
180.5
Deferred
tax
299.3
353.5
Non-current
lease liability
151.4
170.9
Non-current
maturities of debt
3,501.7
3,583.0
Total non-current liabilities
4,046.6
4,324.5
Shareholders' equity
Issued
share capital
14
6.7
6.5
Share
premium account
14
1,144.1
738.5
Other
undenominated capital
14
3.5
3.5
Retained
earnings
14
3,833.1
4,245.0
Other
reserves
(8.7)
(79.0)
Shareholders' equity
4,978.7
4,914.5
Total liabilities and shareholders' equity
14,684.4
14,747.2
Ryanair Holdings plc and
Subsidiaries
Condensed Consolidated Interim Income Statement for the Half-Year
ended September 30, 2020 (unaudited)
(Loss)/Profit for the quarter - attributable to equity holders of
parent
(22.6)
(202.9)
(225.5)
910.2
(Loss)/earnings per
ordinary share (€)
Basic
9
-125%
(0.2053)
0.8139
Diluted
9
-125%
(0.2053)
0.8107
Weighted ave. no.
ord. shares (in Ms)
Basic
9
1,098.6
1,118.3
Diluted
9
1,098.6
1,122.7
*’+’
is favourable and ‘-‘ is adverse
year-on-year.
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim
Statement of Comprehensive Income for the Half-Year ended September
30, 2020 (unaudited)
Half-Year
Ended
Sep 30,
Half-Year
Ended
Sep 30,
2020
2019
€M
€M
(Loss)/profit for the half-year
(410.5)
1,152.7
Other comprehensive income:
Items that are or may be reclassified to profit or
loss:
Movements in hedging reserve, net of tax:
Net
movements in cash-flow hedge reserve
69.1
216.5
Other comprehensive income for the half-year, net of income
tax
69.1
216.5
Total comprehensive (loss)/income for the half-year - all
attributable to equity holders of parent
(341.4)
1,369.2
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim
Statement of Comprehensive Income for the quarter ended September
30, 2020 (unaudited)
Quarter
Ended
Sep 30,
Quarter
Ended
Sep 30,
2020
2019
€M
€M
(Loss)/profit for the quarter
(225.5)
910.2
Other comprehensive income:
Items that are or may be reclassified to profit or
loss:
Movements in hedging reserve, net of tax:
Net
movement in cash-flow hedge reserve
103.1
293.2
Other comprehensive income for the quarter, net of income
tax
103.1
293.2
Total comprehensive (loss)/income for the quarter - all
attributable to equity holders of parent
(122.4)
1,203.4
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Statement of Cash Flows for the
Half-Year ended September 30, 2020 (unaudited)
Half-Year
Half-Year
Ended
Ended
Sep 30,
Sep 30,
2020
2019
*Restated
Note
€M
€M
Operating activities
(Loss)/profit after tax
(410.5)
1,152.7
Adjustments to reconcile profit after tax to net cash from
operating activities
Depreciation
296.5
381.1
Increase in inventories
(0.4)
(2.0)
Tax (credit)/expense on profit
(21.8)
106.8
Share based payments
2.1
4.0
Decrease/(increase) in trade receivables
34.5
(16.1)
Decrease/(increase) in other assets
19.1
(27.4)
(Decrease)/increase in trade payables
(108.6)
168.6
(Decrease) in accrued expenses
(868.8)
(909.1)
Increase in provisions
11.1
0.7
Decrease in finance income
2.2
-
Increase in finance expense
(14.9)
(6.9)
Hedge ineffectiveness
(97.4)
-
Income tax paid
(1.0)
(49.3)
Net cash (outflow)/inflow from operating activities
(1,157.9)
803.1
Investing activities
Capital expenditure purchase of property, plant and equipment net
of supplier proceeds
142.5
(334.2)
Decrease in restricted cash
0.3
0.5
(Increase) in financial assets: cash > 3 months
(308.9)
(295.5)
Net cash (used in) investing activities
(166.1)
(629.2)
Financing activities
Shareholder returns (net of tax)
-
(226.0)
Net proceeds from shares issued
14
403.5
3.6
Proceeds from long term borrowings
1,540.0
750.0
Repayments of long term borrowings
(132.3)
(230.8)
Lease liabilities paid
(38.2)
(28.1)
Net cash from in financing activities
1,773.0
268.7
Increase in cash and cash equivalents
449.0
442.6
Net foreign exchange
differences
(63.3)
-
Cash and cash equivalents at
beginning of the period
2,566.4
1,675.6
Cash and cash equivalents at end of the period
2,952.1
2,118.2
*Includes
reclassification between trade payables and capital expenditure.
See note 1 for further detail.
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Statement of Changes in
Shareholders’ Equity for the Half-Year ended September 30,
2020 (unaudited)
Issued
Share
Other
Ordinary
Share
Premium
Retained
Undenom.
Other
Shares
Capital
Account
Earnings
Capital
Hedging
Reserves
Total
M
€M
€M
€M
€M
€M
€M
€M
Balance at March 31, 2019
1,133.4
6.8
719.4
4,181.9
3.2
274.6
29.0
5,214.9
Adjustment on initial application of IFRS 16
-
-
-
(9.7)
-
-
-
(9.7)
Adj. balance at March 31, 2019
1,133.4
6.8
719.4
4,172.2
3.2
274.6
29.0
5,205.2
Profit for the half-year
-
-
-
1,152.7
-
-
-
1,152.7
Other comprehensive income
Net movements in cash flow reserve
-
-
-
-
-
216.5
-
216.5
Total other comprehensive income
-
-
-
-
-
216.5
-
216.5
Total comprehensive income
-
-
-
1,152.7
-
216.5
-
1,369.2
Transactions with owners of the Company recognised directly in
equity
Issue of ordinary equity shares
0.6
-
3.6
-
-
-
3.6
Share-based payments
-
-
-
-
-
-
4.0
4.0
Repurchase of ordinary equity shares
-
-
-
(226.0)
-
-
-
(226.0)
Other
-
-
0.9
-
-
-
0.9
Cancellation of repurchased ordinary shares
(21.8)
(0.1)
-
-
0.1
-
-
-
Transfer of exercised and expired share based awards
-
-
-
0.5
-
-
(0.5)
-
Balance at September 30, 2019
1,112.2
6.7
723.0
5,100.3
3.3
491.1
32.5
6,356.9
Loss for the half-year
-
-
-
(504.0)
-
-
-
(504.0)
Other comprehensive income
Net movements in cash flow reserve
-
-
-
-
-
(602.4)
-
(602.4)
Total other comprehensive income
-
-
-
-
-
(602.4)
-
(602.4)
Total comprehensive income
-
-
-
(504.0)
-
(602.4)
-
(1,106.4)
Transactions with owners of the Company recognised directly in
equity
Issue of ordinary equity shares
2.4
-
15.5
-
-
-
-
15.5
Share-based payments
-
-
-
-
-
-
3.0
3.0
Repurchase of ordinary equity shares
-
-
-
(354.5)
-
-
-
(354.5)
Cancellation of repurchased ordinary shares
(25.4)
(0.2)
-
-
0.2
-
-
-
Transfer of exercised and expired share based awards
-
-
-
3.2
-
-
(3.2)
-
Balance at March 31, 2020
1,089.2
6.5
738.5
4,245.0
3.5
(111.3)
32.3
4,914.5
Loss for the half-year
-
-
-
(410.5)
-
-
-
(410.5)
Other comprehensive income
Net movements in cash flow reserve
-
-
-
-
-
69.1
-
69.1
Total other comprehensive income
-
-
-
-
-
69.1
-
69.1
Total comprehensive income
-
-
-
(410.5)
-
69.1
-
(341.4)
Transactions with owners of the Company recognised directly in
equity
Issue of ordinary equity shares
36.1
0.2
405.6
(2.3)
-
-
-
403.5
Share-based payments
-
-
-
-
-
-
2.1
2.1
Transfer of exercised and expired share based
awards
-
-
-
0.9
-
-
(0.9)
-
Balance at September 30, 2020
1,125.3
6.7
1,144.1
3,833.1
3.5
(42.2)
33.5
4,978.7
Ryanair Holdings plc and Subsidiaries
MD&A Half-Year Ended September 30, 2020
Introduction
For the
purposes of the Management Discussion and Analysis
(“MD&A”) (with the exception of the balance sheet
commentary below) all figures and comments are by reference to the
adjusted results excluding the exceptional item referred to
below.
Ongoing
EU Government travel & flight restrictions as a result of
Covid-19 means that the Group will operate a significantly reduced
flying schedule in H2 FY21 compared to what was originally
expected. Therefore, the Group is recording an exceptional hedge
ineffectiveness charge of €167M (net of a tax credit) in
relation to H2 FY21 jet fuel hedges and a €47M charge (net of
a tax credit) in relation to ineffective currency cashflow hedges
primarily from delayed capex.
Income Statement
Scheduled revenues:
Scheduled
revenues decreased by 79% to
€790.8M due to an 80% decline in traffic to 17M as EU
Governments imposed flight and/or travel bans due to the Covid-19
pandemic. This grounded approx. 99% of the Group’s fleet for
almost 4 months (from mid-March to late June). The Group operated
approximately 50% of its normal Q2 schedule with a 72% load
factor.
Ancillary
revenues:
Ancillary
revenues decreased by 77% to
€385.4M due to an 80% decline in traffic (as
highlighted above) to 17M offset by a strong performance in
priority boarding and reserved seating.
Total revenues:
As a
result of the above, total revenues decreased by 78% to €1,176.2M.
Operating Expenses:
Fuel
and
oil:
Fuel
and oil decreased by 78% to
€343.0M due to a 73% reduction in sectors flown,
arising from Covid-19 fleet groundings and improved fuel
burn.
Depreciation:
Depreciation
was 22% lower at
€296.5M, primarily due to lower amortisation as a
result of reduced aircraft utilisation.
Staff
costs:
Staff
costs decreased by 60% to
€234.7M due to reduced flight hours, a recruitment
freeze, Group wide pay cuts and participation in EU Government
payroll support schemes.
Airport
and handling
charges:
Airport
and handling charges decreased by 74% to €169.7M due to lower
sectors and reduced charges.
Route
charges:
Route
charges decreased by 73% to
€115.3M primarily due to significantly reduced sectors
arising from Covid-19 fleet groundings
Marketing,
distribution and
other:
Marketing,
distribution and other decreased by 64% to €106.4M due to lower
discretionary spending across the Group airlines and fewer flights
qualifying for EU261 compensation due to improved on-time
performance in H1 (97% OTP).
Maintenance,
materials and
repairs:
Maintenance,
materials and repairs decreased by 40% to €82.6M due to reduced
aircraft utilisation.
Aircraft rentals:
Aircraft
rentals fell by 83% to
€4.8M due to 14 fewer leased B737 aircraft in the
fleet.
Other
expense:
Finance
expenses decreased by €11.3M
to €15.3M as a result of higher USD denominated cash
on deposit and the maturity of more expensive secured
debt.
Balance sheet:
Gross
cash increased by €694.3M to €4,502.3.0M at September
30, 2020.
Gross
debt rose by €1,374.0M to €5,585.2M primarily due to a
€850M Eurobond issuance in September 2020 and £600M
unsecured debt under the HMT and Bank of England CCFF, offset by
€132.3M debt repayments and €38.2M lease liability
payments.
Net
debt was €1,082.9M at period end.
Shareholders’
equity:
Shareholders’
equity increased by €64.2M to €4,978.7M in the period
primarily due to a €400.0M of equity placing in September
2020 offset by a net loss of €410.5M and IFRS hedge
accounting unrealised gain for derivatives of
€69.1M.
MD&A Quarter Ended September 30, 2020
Introduction
For the
purposes of the Management Discussion and Analysis
(“MD&A”) (with the exception of the balance sheet
commentary below) all figures and comments are by reference to the
adjusted results excluding the exceptional item referred to
below.
Ongoing
EU Government travel & flight restrictions as a result of
Covid-19 means that the Group will operate a significantly reduced
flying schedule in H2 FY21 compared to what was originally
expected. Therefore, the Group is recording an exceptional hedge
ineffectiveness charge of €153M (net of a tax credit) in
relation to H2 FY21 jet fuel hedges and a €50M charge (net of
a tax credit) in relation to ineffective currency cashflow hedges
primarily from delayed capex.
Income Statement
Scheduled revenues:
Scheduled
revenues decreased by 69% to
€690.1M due to a 62% decline in traffic to just 16.7M
as EU Governments imposed flight and/or travel bans due to the
Covid-19 pandemic. The Group operated approximately 50% of its
normal Q2 schedule with a 72% load factor.
Ancillary
revenues:
Ancillary
revenues decreased by 58% to
€360.9M due to a 62% decline in traffic (as
highlighted above) to just 16.7M offset by a strong performance in
priority boarding and reserved seating.
Total Revenue:
As a
result of the above, total revenues decreased by 66% to €1,051.0M.
Operating Expenses:
Fuel
and
oil:
Fuel
and oil decreased by 58% to
€334.1M due to a 49% reduction in sectors flown,
arising from Covid-19 fleet groundings and improved fuel
burn.
Depreciation:
Depreciation
is 14% lower at
€162.5M, primarily due to lower amortisation as a
result of reduced aircraft utilisation.
Staff
costs:
Staff
costs decreased 42% to
€166.2M due to reduced flight hours, a recruitment
freeze, Group wide pay cuts and participation in EU Government
payroll support schemes.
Airport
and handling
charges:
Airport
and handling charges decreased by 55% to €151.6M due to lower
sectors and reduced charges.
Route
charges:
Route
charges decreased by 48% to
€113.0M primarily due to significantly reduced sectors
arising from Covid-19 fleet groundings.
Marketing,
distribution and
other:
Marketing,
distribution and other decreased by 59% to €64.0M due to lower
discretionary spending across the Group airlines and fewer flights
qualifying for EU261 compensation due to improved on-time
performance in Q2 (97% OTP).
Maintenance,
materials and
repairs:
Maintenance,
materials and repairs decreased by 33% to €46.4M due to reduced
aircraft utilisation.
Aircraft rentals:
Aircraft
rentals fell by 81% to
€2.4M due to 14 fewer leased B737 aircraft in the
fleet.
Other
expense:
Finance
expenses decreased by €7.2M
to €5.9M as a result of higher USD denominated cash on
deposit and the maturity of more expensive secured
debt.
Ryanair
Holdings plc and Subsidiaries
Interim
Management Report
Introduction
This
financial report for the half-year ended September 30, 2020 meets
the reporting requirements pursuant to the Transparency (Directive
2004/109/EC) Regulations 2007 and Transparency Rules of the Central
Bank of Ireland.
This
interim management report includes the following:
●
Principal risks and
uncertainties relating to the remaining six months of the
year;
●
Related party
transactions; and
●
Post balance sheet
events.
Results
of operations for the six-month period ended September 30, 2020
compared to the six month period ended September 30, 2019,
including important events that occurred during the half-year, are
set forth above in the MD&A.
Principal risks and uncertainties for the remainder of the
year
The
Covid-19 pandemic and measures to reduce its spread have had, and
will likely continue to have, a material adverse impact on the
Group’s business, results of operations, financial condition
and liquidity. Since February 2020, governments globally have
implemented a range of travel restrictions including lockdowns,
“do not travel” advisories, restrictions on travel from
certain international locations, enhanced airport screenings,
mandatory quarantine requirements, and other similar measures.
Other governmental restrictions and regulations in the future in
response to Covid-19 could include additional travel restrictions,
quarantines of additional populations (including the Group’s
personnel), restrictions on our ability to access our facilities or
aircraft or requirements to collect additional passenger data. In
addition, governments, non-governmental organizations and entities
in the private sector have issued and may continue to issue
non-binding advisories or recommendations regarding air travel or
other social distancing measures, including limitations on the
number of persons that should be present at public gatherings. In
addition, Ryanair has incurred, and will continue to incur,
significant Covid-19 related costs for enhanced aircraft cleaning
and additional procedures to limit transmission among its personnel
and customers. Although these procedures are currently elective,
the industry may in the future be subject to further cleaning and
safety measures, which may be costly and take a significant amount
of time to implement. These measures, individually and combined,
could have a material adverse impact on the Group’s
business.
The
full extent of the ongoing impact of Covid-19 on the Group’s
longer-term operational and financial performance will depend on
future developments, many of which are outside of the Group’s
control, including the duration and spread of Covid-19 and related
travel advisories and restrictions, the impact of Covid-19 on
overall long-term demand for air travel, the impact of Covid-19 on
the financial health and operations of the Group’s business
partners (particularly Boeing), and future governmental actions,
all of which are highly uncertain and cannot be
predicted.
Among
other factors that are subject to change and could significantly
impact Ryanair’s expected results for the remainder of the
year are the airline pricing environment, capacity growth in
Europe, 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, UK, European Union (“EU”) and other governments
and their respective regulatory agencies, delays in the delivery of
contracted aircraft, weather related disruptions, ATC strikes and
staffing related disruptions, uncertainties surrounding Brexit,
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, other economic, social and political factors
and unforeseen security events.
Board of Directors
David
Bonderman and Kyran McLaughlin retired from the Board on May 31,
2020. Stan McCarthy was appointed Chairman of the Board of
Directors following David Bonderman’s retirement. Details of
the members of the Group’s Board of Directors are set forth
on page 17 of the Group’s 2020 annual report.
Related party transactions – Please see note 15.
Post balance sheet events – Please see note 17.
Going concern
The
directors, having made inquiries, including consideration of the
possible future financial effects associated with the Covid-19
pandemic, believe that the Group has adequate resources (including
the €1.25BN funds raised through a €400M share placing
and an €850M unsecured Eurobond in September 2020) to
continue in operational existence for at least the next 12 months
and that it is appropriate to adopt the going concern basis in
preparing the financial statements. While there is uncertainty as
to the full extent of the impact on the Ryanair Holdings plc Group,
the continued preparation of the Group’s consolidated
financial statements on the going concern basis is supported by the
financial projections prepared by the Group.
Ryanair
Holdings plc and Subsidiaries
Notes
forming Part of the Condensed Consolidated
Interim Financial Statements
1. Basis
of preparation and significant accounting policies
Ryanair
Holdings plc (the “Company”) is a company domiciled in
Ireland. The unaudited condensed consolidated interim financial
statements of the Company for the half-year ended September 30,
2020 comprise the Company and its subsidiaries (together referred
to as the “Group”).
These
unaudited condensed consolidated interim financial statements
(“the interim financial statements”), which should be
read in conjunction with our 2020 Annual Report for the year ended
March 31, 2020, have been prepared in accordance with International
Accounting Standard No. 34 “Interim Financial Reporting” as
adopted by the EU (“IAS 34”). They do not include all
of the information required for full annual financial statements
and should be read in conjunction with the most recent published
consolidated financial statements of the Group. The consolidated
financial statements of the Group as at and for the year ended
March 31, 2020, are available at http://investor.ryanair.com/.
The
September 30, 2020 figures and the September 30, 2019 comparative
figures do not constitute statutory financial statements of the
Group within the meaning of the Companies Act, 2014. The
consolidated financial statements of the Group for the year ended
March 31, 2020, together with the independent auditor’s
report thereon, were filed with the Irish Registrar of Companies
following the Company’s Annual General Meeting and are also
available on the Company’s Website. The auditor’s
report on those financial statements was unqualified.
The
Audit Committee, upon delegation of authority by the Board of
Directors, approved the condensed consolidated interim financial
statements for the half-year ended September 30, 2020 on October
30, 2020.
Except
as stated otherwise below, this year’s financial information
has been prepared in accordance with the accounting policies set
out in the Group’s most recent published consolidated
financial statements, which were prepared in accordance with IFRS
as adopted by the EU and also in compliance with IFRS as issued by
the International Accounting Standards Board (IASB).
Government grants
Grants
that compensate the Group for expenses incurred are recognised in
the income statement on a systematic basis in the periods in which
the expenses are recognised.
New IFRS standards and amendments adopted during the
year
The
following new and amended IFRS standards, amendments and IFRIC
interpretations, have been issued by the IASB, and have also been
endorsed by the EU. These standards are effective for the first
time for the Group’s financial year beginning on April 1,
2020 and therefore have been applied by the Group in these
condensed consolidated interim financial statements:
●
Amendments to
References to the Conceptual Framework in IFRS Standards (effective
for fiscal periods beginning on or after January 1,
2020)
●
Amendments to IFRS
3 – Definition of a Business (effective for fiscal periods
beginning on or after January 1, 2020)
●
Amendments to IAS 1
and IAS 8 - Definition of Material (effective for fiscal periods
beginning on or after January 1, 2020)
●
Amendments to IFRS
9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform
(effective for fiscal periods beginning on or after January 1,
2020)
●
Amendment to IFRS
16 – Covid-19-Related Rent Concessions (effective for fiscal
periods beginning on or after January 1, 2020)
The
Group has evaluated the extent to which its cashflow hedging
relationships are subject to uncertainty driven by IBOR reform as
at 31 December 2020. The Group’s hedged items and hedging
instruments continue to be indexed to Euribor. These benchmark
rates are quoted each day and the IBOR cash flows are exchanged
with counterparties as usual.
The
calculation methodology of Euribor changed during 2019. In July
2019, the Belgian Financial Services and Markets Authority granted
authorisation with respect to Euribor under the European Union
Benchmarks regulation. This allows market participants to continue
to use Euribor for both existing and new contracts and the Group
expects that Euribor will continue to exist as a benchmark for the
foreseeable future.
The
adoption of these new or amended standards did not have a material
impact on the Group’s financial position or results from
operations in the half-year ended September 30, 2020.
New IFRS standards and amendments issued but not yet
effective
The
following new or revised IFRS standards and IFRIC interpretations
will be adopted for the purposes of the preparation of future
financial statements, where applicable. While under review, we do
not anticipate that the adoption of the other new or revised
standards and interpretations will have a material impact on our
financial position or results from operations:
●
IFRS 17 –
Insurance Contracts (effective for fiscal periods beginning on or
after January 1, 2023)
●
Amendments to IAS 1
– Classification of Liabilities as Current or Non-Current
(effective for fiscal periods beginning on or after January 1,
2023)
●
Amendments to IFRS
3 – Reference to the Conceptual Framework (effective for
fiscal periods beginning on or after January 1
2022)
●
Amendments to IAS
16 – Property, Plant and Equipment – Proceeds before
Intended Use (effective for fiscal periods beginning on or after
January 1, 2022)
●
Amendments to IAS
37 – Onerous Contracts – Costs of Fulfilling a Contract
(effective for fiscal periods beginning on or after January 1,
2022)
●
Annual Improvements
to IFRS Standards 2018-2020 (effective for fiscal periods beginning
on or after January 1, 2022)
●
Amendments to IFRS
17 (effective for fiscal periods beginning on or after January 1,
2023)
●
Amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate
Benchmark Reform (effective for fiscal periods beginning on or
after January 1, 2021)
Statement of Cash Flows restatement
Operating
cash inflows and investing cash outflows for the six month period
ended 30 September 2019 have been reclassified. They both have been
reduced by €274M to reflect accrued supplier payables which
had previously been presented as capital expenditure in the
consolidated cash flows.
2. Judgements
and estimates
In
preparing these condensed interim financial statements, management
has made judgements and estimates that affect the application of
accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from
these estimates.
In
preparing these condensed consolidated interim financial
statements, the significant judgements and key sources of
estimation uncertainty were the same as those that applied in the
most recent published consolidated financial
statements.
Derivative financial instruments
The
Group uses various derivative financial instruments to manage its
exposure to market risks, including the risks relating to
fluctuations in commodity prices and currency exchange rates.
Ryanair uses forward contracts for the purchase of its jet fuel
(jet kerosene) requirements to reduce its exposure to commodity
price risk. It also uses foreign currency forward contracts to
reduce its exposure to risks related to foreign currencies,
principally the U.S. dollar exposure associated with the purchase
of new Boeing 737 aircraft and the U.S. dollar exposure associated
with the purchase of jet fuel.
The
Group recognises all derivative instruments as either assets or
liabilities in its consolidated balance sheet and measures them at
fair value. At September 30, 2020, a net liability of €601.5M
(2019 net asset €73.5M) was recognised on balance sheet in
respect of the Group’s jet fuel derivative instruments and a
net asset of €226.6M (2019 net asset €508.8M) was
recognised in respect of its foreign currency derivative
instruments associated with future aircraft purchases.
In
determining the hedge effectiveness of derivative instruments used
to hedge Ryanair’s fuel requirements, there is significant
judgement involved in assessing whether the volumes of jet fuel
hedged are still expected to be highly probable forecast
transactions. Specifically, significant judgement is required in
respect of the assumptions related to the timing of the full
removal of flight restrictions imposed by governments relating to
the Covid-19 pandemic, the expected recovery of passenger demand
and the subsequent flight schedules. All of these assumptions
impact upon forecast fuel consumption, and minor changes to these
assumptions could have a significant effect on the assessment of
hedge effectiveness.
At
March 31, 2020 the Group expected to operate much of its normal
Winter 2020/2021 schedule. The Group now believes it will operate
approximately 40% of its Winter 2020/2021 schedule.
In
respect of foreign currency hedge effectiveness for future aircraft
purchases, there is a high degree of judgement involved in
assessing whether the future aircraft payments are still considered
highly probable of occurring, and the timing of these future
payments for aircraft. The timing of future payments for aircraft
is dependent on the aircraft manufacturer’s ability to meet
forecast aircraft delivery schedules.
The
Boeing 737-MAX was grounded in 2019, Boeing are currently working
with the FAA and EASA regarding a return to service. At March 31,
2020 the aircraft was expected to return to service in the United
States in the third quarter of 2020, the current expectation is
that the aircraft will return to service in the United States in
the fourth quarter of 2020 with a return to service in Europe a
number of months thereafter.
3. Seasonality
of operations
The
Group’s results of operations have varied significantly from
quarter to quarter, and management expects these variations to
continue. Among the factors causing these variations are the
airline industry’s sensitivity to general economic conditions
and the seasonal nature of air travel. Accordingly, the first
half-year has traditionally resulted in higher revenues and
results.
4. Income
tax expense
The
Group’s consolidated effective tax rate in respect of
operations for the half-year ended September 30, 2020 was 5.0%
(September 30, 2019: 8.5%). The tax credit for the half-year ended
September 30, 2020 of €21.8M (tax charge September 30, 2019:
€106.8M) comprises a current tax charge of €9.5M and, a
deferred tax credit of €31.3M primarily relating to the
temporary differences for property, plant and equipment and net
operating losses.
5. Share
based payments
The
terms and conditions of the Group’s share based remuneration
programmes are disclosed in the most recent, published,
consolidated financial statements. The charge of €2.1M in the
half-year ended September 30, 2020 (September 30, 2019:
€4.0M) is the fair value of options granted in prior periods,
which is being recognised within the income statement in accordance
with employee services rendered.
6. Contingencies
The
Group is engaged in litigation arising in the ordinary course of
its business. The Group does not believe that any such litigation
will individually, or in aggregate, have a material adverse effect
on the financial condition of the Group. Should the Group be
unsuccessful in these litigation actions, management believes the
possible liabilities then arising cannot be determined but are not
expected to materially adversely affect the Group’s results
of operations or financial position.
7. Capital
commitments
At
September 30, 2020 the Group had an operating fleet of 438 (2019:
455) Boeing 737 and 28 (2019: 21) Airbus A320 aircraft. The Group
has agreed to purchase up to 210 (135 firm and 75 options) Boeing
737-MAX-200 aircraft from the Boeing Corporation which will deliver
(subject to EASA & FAA regulatory approval) over the next five
or more years.
8. Analysis
of operating revenues and segmental analysis
The
Group determines and presents operating segments based on the
information that internally is provided to the Group CEO, who is
the Chief Operating Decision Maker (CODM).
The
CODM assesses the performance of the business based on the
profit/(loss) after tax of each airline for the reporting period.
Resource allocation decisions for all airlines are based on airline
performance for the relevant period, with the objective in making
these resource allocation decisions being to optimize consolidated
financial results.
Ryanair
DAC (“Ryanair”) is a reportable segment for financial
reporting purposes. Buzz, Lauda and Malta Air do not exceed the
quantitative thresholds for reporting purposes and accordingly have
been presented on an aggregate basis in the table
below.
There
are varying levels of integration between the operating segments.
Inter-segment revenue is not material and thus not subject to
separate disclosure.
Reportable
segment information is presented as follows:
Ryanair DAC
Other
Total
Ryanair DAC
Other
Total
Half-year
ended
At Sep 30, 2020
At Sep 30, 2020
At Sep 30, 2020
At Sep 30, 2019
At Sep 30, 2019
At Sep 30, 2019
€M
€M
€M
€M
€M
€M
Segment revenue
1,160.6
15.6
1,176.2
5,149.0
240.6
5,389.6
Segment (loss)/PAT
(317.9)
(92.6)
(410.5)
1,209.2
(56.5)
1,152.7
Other segment information:
Depreciation
264.2
32.3
296.5
356.0
25.1
381.1
Capex net of supplier proceeds
(142.5)
-
(142.5)
334.2
-
334.2
Ryanair DAC
Other
Total
Ryanair DAC
Other
Total
Quarter ended
At Sep 30,
2020
At Sep 30,
2020
At Sep 30,
2020
At Sep 30,
2019
At Sep 30,
2019
At Sep 30,
2019
€M
€M
€M
€M
€M
€M
Segment revenue
1,039.3
11.7
1,051.0
2,934.3
143.2
3,077.5
Segment (loss)/PAT
(190.9)
(34.6)
(225.5)
931.4
(21.2)
910.2
Other segment information:
Depreciation
146.8
15.7
162.5
174.8
13.4
188.2
Capex net of supplier proceeds
(279.9)
-
(279.9)
97.6
-
97.6
At Sep 30,
At Sep 30,
At Sep 30,
At Mar 31,
At Mar 31,
At Mar 31,
2020
2020
2020
2020
2020
2020
€M
€M
€M
€M
€M
€M
Segment assets
14,100.7
583.7
14,684.4
14,194.5
552.7
14,747.2
Segment liabilities
8,780.3
925.4
9,705.7
8,995.2
837.5
9,832.7
9.
Earnings
per share
Half-Year
Half-Year
Quarter
Quarter
Ended
Ended
Ended
Ended
Sep 30,
Sep 30,
Sep 30,
Sep 30,
2020
2019
2020
2019
Basic (loss)/earnings per ordinary share (€)
(0.3752)
1.0247
(0.2053)
0.8139
Diluted earnings per ordinary share (€)
(0.3752)
1.0204
(0.2053)
0.8107
Weighted average number of ordinary shares (in M’s) –
basic
1,094.0
1,124.9
1,098.6
1,118.3
Weighted average number of ordinary shares (in M’s) –
diluted
1,094.0
1,129.7
1,098.6
1,122.7
Diluted
earnings per share takes account solely of the potential future
exercises of share options granted under the Company’s share
option schemes and the weighted average number of shares includes
weighted average share options assumed to be converted of 4.1M
(2019: 2.8M) and weighted issued share capital of 4.8M (2019:
Nil).
10.
Property,
plant and equipment
Acquisitions and disposals
Capital
expenditure in the half-year ended September 30, 2020 amounted to a
credit of €143M this includes €250M supplier proceeds
and capital expenditure of €108M that primarily relates to
heavy maintenance checks.
11.
Assets
held for sale
In
August 2019, the Group entered into an agreement to sell 10 Boeing
737 aircraft in the years ending March 31, 2020 and 2021. 3 of
these aircraft were sold during the year ended March 31, 2020. A
further 2 aircraft were sold during the half-year ended September
30, 2020. The remaining 5 aircraft are presented as assets held for
sale as at September 30, 2020 and are stated at the lower of their
carrying amount and fair value less costs to sell.
12.
Derivative
financial instruments
As a
result of the widespread grounding of aircraft due to the Covid-19
pandemic, the Group expects to operate a significantly reduced
flying schedule for the year ending March 31, 2021 compared to what
was originally expected. Accordingly, as at September 30, 2020, the
Group’s exposures for jet fuel and foreign currency were
significantly reduced, causing a proportion of derivative financial
instruments which previously qualified for hedge accounting to
become ineffective, resulting in the discontinuance of certain
cash-flow hedge arrangements. A net expense of €214M was
recognised within the income statement for the half-year ended
September 30, 2020, comprising a charge of €167M (net of tax)
in respect of jet fuel exposures and a charge of €47M (net of
tax), primarily associated with ineffective currency cash-flow
hedges for fiscal year 2021 jet fuel and delayed capital
expenditure. As of September 30, 2020, a balance of €153M
(loss) is recognised in the cash flow reserve in respect of
continuing hedges and €111M (gain) in respect of hedging
relationships for which hedge accounting is no longer
applied
13.
Financial
instruments and financial risk management
The
Group is exposed to various financial risks arising in the normal
course of business. The Group’s financial risk exposures are
predominantly related to commodity price, foreign exchange and
interest rate risks. The Group uses financial instruments to manage
exposures arising from these risks.
These
interim financial statements do not include all financial risk
management information and disclosures required in the annual
financial statements and should be read in conjunction with the
2020 Annual Report. There have been no changes in our risk
management policies in the year.
Fair value hierarchy
Financial
instruments measured at fair value in the balance sheet are
categorised by the type of valuation method used. The different
valuation levels are defined as follows:
●
Level 1: quoted
prices (unadjusted) in active markets for identical assets or
liabilities that the Group can access at the measurement
date.
●
Level 2: inputs
other than quoted prices included within Level 1 that are
observable for that asset or liability, either directly or
indirectly.
●
Level 3:
significant unobservable inputs for the asset or
liability.
Fair value estimation
Fair
value is the price that would be received to sell an asset, or paid
to transfer a liability, in an orderly transaction between market
participants at the measurement date. The following methods and
assumptions were used to estimate the fair value of each material
class of the Group’s financial instruments:
Financial instruments measured at fair value
● Derivatives – interest rate swaps:
Discounted cash flow analyses have been used to determine the fair
value, taking into account current market inputs and rates. (Level
2)
● Derivatives – currency forwards, aircraft
fuel contracts and EUA contracts: A comparison of the
contracted rate to the market rate for contracts providing a
similar risk profile at September 30, 2020 has been used to
establish fair value. (Level 2)
The
Group policy is to recognise any transfers between levels of the
fair value hierarchy as of the end of the reporting period during
which the transfer occurred. During the quarter ended September 30,
2020, there were no reclassifications of financial instruments and
no transfers between levels of the fair value hierarchy used in
measuring the fair value of financial instruments.
Financial instruments not measured at fair value
● Long-term debt: The repayments which the
Group is committed to make have been discounted at the relevant
market rates of interest applicable (including credit spreads) at
September 30, 2020 to arrive at a fair value representing the
amount payable to a third party to assume the
obligations.
There
were no significant changes in the business or economic
circumstances during the quarter ended September 30, 2020 that
affect the fair value of our financial assets and financial
liabilities.
13.
Financial
instruments and financial risk management (continued)
The
fair value of financial assets and financial liabilities, together
with the carrying amounts in the condensed consolidated balance
sheet, are as follows:
At Sep 30,
At
Sep 30,
At Mar
31,
At Mar
31,
2020
2020
2020
2020
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
Non-current financial assets
€M
€M
€M
€M
Derivative
financial instruments:
- U.S.
dollar currency forward contracts
144.0
144.0
372.5
372.5
-
Interest rate swaps
2.5
2.5
6.0
6.0
146.5
146.5
378.5
378.5
Current financial assets
Derivative
financial instruments:
- U.S.
dollar currency forward contracts
87.2
87.2
291.2
291.2
-
Interest rate swaps
1.1
1.1
2.0
2.0
- EUA
Assets
7.1
7.1
-
-
95.4
95.4
293.2
293.2
Trade
receivables*
32.7
67.5
Cash
and cash equivalents*
2,952.1
2,566.4
Financial
asset: cash > 3 months*
1,516.1
1,207.2
Restricted
cash*
34.1
34.4
Other
assets*
0.1
2.3
4,630.5
95.4
4,171.0
293.2
Total
financial assets
4,777.0
241.9
4,549.5
671.7
At Sep 30,
At
Sep 30,
At Mar
31,
At Mar
31,
2020
2020
2020
2020
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
Non-current
financial liabilities
€M
€M
€M
€M
Derivative
financial instruments:
- U.S.
dollar currency forward contracts
4.5
4.5
-
-
- Jet
fuel contracts
58.8
58.8
180.5
180.5
63.3
63.3
180.5
180.5
Long-term
debt
1,061.2
1,068.9
1,138.9
1,148.5
Bonds
2,440.5
2,380.4
2,444.1
1,965.0
3,565.0
3,512.6
3,763.5
3,294.0
Current financial liabilities
Derivative
financial instruments:
- Jet
fuel & carbon derivative contracts
498.8
498.8
1,047.8
1,047.8
- U.S.
dollar currency forward contracts
44.0
44.0
2.2
2.2
- GBP
currency swap
25.3
25.3
-
-
568.1
568.1
1,050.0
1,050.0
Current
maturities of debt
1,869.5
1,869.5
382.3
382.3
Trade
payables*
1,390.7
1,368.2
Accrued
expenses*
1,139.7
1,553.1
4,968.0
2,437.6
4,353.6
1,432.3
Total
financial liabilities
8,533.0
5,950.2
8,117.1
4,726.3
*The fair value of each of these financial instruments approximate
their carrying values due to the short-term nature of the
instruments
13.
Financial
instruments and financial risk management (continued)
In
April 2020, the Group raised approximately £600M unsecured
debt for general corporate purposes under the HMT and Bank of
England CCFF.
The
Group issued senior, unsecured bonds with a face value of
€850M on September 15, 2020. The bond has a coupon rate of
2.875% and a maturity date of September 15, 2025
14.
Shareholders
equity and shareholder returns
In
September 2020, 35.2M ordinary shares were issued via an ordinary
share placing at a price of €11.35 per share generating
€400M proceeds.
During
the period 0.9M ordinary shares were issued at a strike price
between €6.25 and €6.74 per share following the
exercise of vested options.
There
were no shareholder returns during the half-year ended September
30, 2020.
In FY20
the Company bought back 47.2M shares at a total cost of
€581M. This buyback was equivalent to approximately 4.2% of
the Company’s issued share capital at March 31, 2020. All of
these repurchased ordinary shares were cancelled at March 31,
2020.
As a
result of the share buybacks in the year ended March 31, 2020,
share capital decreased by 47.2M ordinary shares with a nominal
value of €581M and the other undenominated capital reserve
increased by a corresponding €0.3M. The other undenominated
capital reserve is required to be created under Irish law to
preserve permanent capital in the Parent Company.
15.
Related
party transactions
The
Company’s related parties comprise its subsidiaries,
Directors and senior key management personnel. All transactions
with subsidiaries eliminate on consolidation and are not
disclosed.
There
were no related party transactions in the quarter ended September
30, 2020 that materially affected the financial position or the
performance of the Company during that period and there were no
changes in the related party transactions described in the 2020
Annual Report that could have a material effect on the financial
position or performance of the Company in the same
period.
16.
Government
grants and assistance
During
the six months to September 30, 2020, many European countries in
which the Ryanair Group operates made available payroll support
schemes. The Ryanair Group utilised a number of these employment
retention schemes to protect jobs within the Group. These schemes
were a mix of short term Covid-19 specific programmes and long term
schemes linked to social security that existed pre Covid-19. The
total amount of payroll supports received by the Group under the
various schemes amounted to approximately €44M and are offset
against staff costs in the Consolidated Income
Statement.
In
April 2020, the Group raised £600M unsecured (12 months) debt
for general corporate purposes under the HMT and Bank of England
CCFF. The 0.44% interest rate was the prevailing rate for strong
BBB rated companies.
17.
Post
balance sheet events
On 15
October the Group reduced its Winter schedule (November to March
2021) taking capacity down from 60% to 40% of prior
year.
18.
Going
concern
Due to
its ongoing cost reductions, recent €1.25BN fundraising which
underpinned the Group’s strong BBB rated balance sheet, and
cost preservation measures, the Board are satisfied that it remains
appropriate to adopt the going concern concept.
Ryanair
Holdings plc and Subsidiaries
Responsibility
Statement
Statement of the Directors in respect of the interim financial
report
The
Directors are responsible for preparing the half-yearly financial
report in accordance with the Transparency (Directive 2004/109/EC)
Regulations 2007 (“Transparency Directive”), and the
Transparency Rules of the Central Bank of Ireland.
In
preparing the condensed set of consolidated interim financial
statements included within the half-yearly financial report, the
Directors are required to:
●
prepare and present
the condensed set of financial statements in accordance with IAS 34
Interim Financial Reporting as adopted by the EU, the Transparency
Directive and the Transparency Rules of the Central Bank of
Ireland;
●
ensure the
condensed set of financial statements has adequate
disclosures;
●
select and apply
appropriate accounting policies; and
●
make accounting
estimates that are reasonable in the circumstances.
The
Directors are responsible for designing, implementing and
maintaining such internal controls as they determine is necessary
to enable the preparation of the condensed set of financial
statements that is free from material misstatement whether due to
fraud or error.
We
confirm that to the best of our knowledge:
(1)
the condensed set
of consolidated interim financial statements included within the
half-yearly financial report of Ryanair Holdings plc for the six
months ended September 30, 2020 (“the interim financial
information”) which comprises the condensed consolidated
interim balance sheet, the condensed consolidated interim income
statement, the condensed consolidated interim statement of
comprehensive income, the condensed consolidated interim statement
of cash flows and the condensed consolidated interim statement of
changes in shareholders’ equity and the related explanatory
notes, have been presented and prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by the EU, the Transparency
Directive and Transparency Rules of the Central Bank of
Ireland.
(2)
The interim
financial information presented, as required by the Transparency
Directive, includes:
a.
an indication of
important events that have occurred during the first 6 months of
the financial year, and their impact on the condensed set of
consolidated interim financial statements;
b.
a description of
the principal risks and uncertainties for the remaining 6 months of
the financial year
c.
related
parties’ transactions that have taken place in the first 6
months of the current financial year and that have materially
affected the financial position or the performance of the
enterprise during that period; and
d.
any changes in the
related parties’ transactions described in the last annual
report that could have a material effect on the financial position
or performance of the enterprise in the first 6 months of the
current financial year.
On
behalf of the Board
Stan
McCarthy
Michael
O’Leary
Chairman
Chief Executive
October
30, 2020
Independent review report to Ryanair Holdings plc and
Subsidiaries
Introduction
We have
been engaged by the Company to review the condensed set of
consolidated interim financial statements in the half-yearly
financial report for the six months ended September 30, 2020 which
comprises the condensed consolidated interim balance sheet, the
condensed consolidated interim income statement, the condensed
consolidated interim statement of comprehensive income, the
condensed consolidated interim statement of cash flows, and the
condensed consolidated interim statement of changes in
shareholders’ equity and the related explanatory notes. Our
review was conducted having regard to the Financial Reporting
Council’s (“FRCs”) International Standard on
Review Engagements (“ISRE”) (UK and Ireland) 2410,
‘Review of Interim Financial
Information Performed by the Independent Auditor of the
Entity’.
Conclusion
Based
on our review, nothing has come to our attention that causes us to
believe that the condensed set of consolidated interim financial
statements in the half-yearly report for the six months ended
September 30, 2019 is not prepared in accordance with IAS 34
‘Interim Financial
Reporting’ as adopted by the EU, the Transparency
(Directive 2004/109/EC) Regulations 2007 (“Transparency
Directive”), and the Transparency Rules of the Central Bank
of Ireland.
Directors’ responsibilities
The
half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for
preparing the half-yearly financial report in accordance with the
Transparency Directive and the Transparency Rules of the Central
Bank of Ireland. As disclosed in note 1, the annual financial
statements of the Company are prepared in accordance
with International
Financial Reporting Standards as issued by the International
Accounting Standards Board and as adopted by the EU. The Directors
are responsible for ensuring that the condensed set of consolidated
interim financial statements included in this half-yearly financial
report has been prepared in accordance with IAS 34
‘Interim Financial
Reporting’ as adopted by the EU.
Our responsibility
Our
responsibility is to express to the Company a conclusion on the
condensed set of consolidated interim financial statements in the
half-yearly financial report based on our review.
Scope of review
We
conducted our review having regard to the Financial Reporting
Council’s International Standard on Review Engagements (UK
and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
We read
the other information contained in the half-yearly financial report
to identify material inconsistencies with the information in the
condensed set of consolidated interim financial statements and to
identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge acquired
by us in the course of performing the review. If we become aware of
any apparent material misstatements or inconsistencies, we consider
the implications for our report.
The purpose of our review work and to whom we owe our
responsibilities
This
report is made solely to the Company in accordance with the terms
of our engagement to assist the Company in meeting the requirements
of the Transparency Directive and the Transparency Rules of the
Central Bank of Ireland. Our review has been undertaken so that we
might state to the Company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Sean
O’Keefe
October 30,
2020
For and
on behalf of
KPMG
Chartered Accountants
1
Stokes Place,
St
Stephen’s Green,
Dublin
2,
Ireland
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.
