Ryanair's profit for FY2019 down by 29 pct

Daniel Fowler
May 22, 2019

Shares of the airline, whose board has approved a 700-million-euro share buyback over the next 9 to 12 months, traded nearly 6% lower at the time of writing in London.

Ryanair joined the ranks of other European airlines bracing for a tough year as overcapacity, weaker economies and higher oil prices squeeze profit margins.

"Revenues rose 6% to €7.6bn due to 7% higher traffic, a 6% cut in ave. fares to €37, while Ryanair Labs continues to stimulate ancillary sales growth with spend per guest up 11% to over €17".

The profit forecast is "disappointing" compared to market expectations, Liberum analyst Gerald Khoo said in a note, pointing to continued increases in non-fuel costs, forecast by Ryanair to hit 2 per cent in the coming year, as "the main disappointment".

Profit for the fiscal year 2019 declined 39 per cent to €885m, and the company said earnings could decline further.

"We are guiding broadly flat group profits".

The Dublin-headquartered airline yesterday reported a slump in profits after tax from €1.45 billion in 2017-18 to €885 million in the year to the end of March, including €140 million losses at Laudamotion, its new central European subsidiary founded by Niki Lauda, the former motor racing driver.

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Excluding fuel, unit costs were likely to rise by 2%, mainly as a result of the appreciation in Sterling and delays in taking deliveries of the Boeing 737 MAX, with the first deliveries of the latter now seen in Winter 2019.

"This guidance is heavily dependent on close-in peak summer fares, H2 prices, the absence of security events, and no negative Brexit developments".

The company also said it had delayed the delivery of five Boeing 737-Max aircraft until winter - with no meaningful cost benefit from the delivery expected until the financial year ending in 2021.

The company said it continued to have "utmost confidence in these aircraft", which it said had 4% more seats, were 16% more fuel efficient and generated 40% lower noise emissions.

Ryanair says it remains committed to the purchase of the Boeing 737 MAX despite two crashes of the aircraft in recent months.

The group also unveiled a €700mln share buyback which was due to begin later this week and run over the next 9-12 months.

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