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 November, 2004
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 PROFITS RISE 15% TO RECORD EUR201m
TRAFFIC GROWTH OF 24%, NET MARGIN OF 28%
Ryanair, Europe's No.1 low fares airline today (2 Nov 2004) announced record
half year profits of EUR201.3m. Traffic grew by 24% to 14.1m passengers,
yields declined by 5% and consequently total revenues rose by 21% to
EUR721.1m. Unit costs (excluding fuel and route charges) fell by 4% and
(including fuel and route charges unit costs remained flat) and as a result
the profit margin after tax declined by 1% to an industry leading 28%.
Summary Table of Results (Irish GAAP) - in Euro
Half Year Ended Sept 30, 2003 Sept 30, 2004 % Increase
Passengers 11.3m 14.0m +24%
Revenue EUR596.4m EUR721.1m +21%
Adjusted Profit after
tax (Note 1) EUR175.5m EUR201.3m +15%
Adjusted Basic EPS
(Euro Cents) 23.21 26.51 +14%
(Note 1)
Note 1:Adjusted profit after tax and EPS for 2003, excludes non-recurring
costs of EUR2.7m (net of tax) arising from the earlier than planned
retirement of 6 Boeing 737-200 aircraft, the re-organisation of "Buzz" in
April'03 of EUR2.7m (net of tax), and finally a Goodwill charge of EUR1.2m
in both periods.
Announcing these results, Ryanair's Chief Executive, Michael O'Leary said:
"These record traffic and profit figures show just how robust Ryanair's
"lowest fares" model remains even in a very difficult economic environment
characterised by record fuel prices and intense price competition. Like
Southwest, this is Ryanair's 30th consecutive quarter of unbroken
profitability (before exceptionals) since we floated in May 1997.
"Central to these record profits is Ryanair's continuing disciplined route
growth. Our two new bases in Barcelona and Rome have exceeded expectations,
as have the 41 other new routes launched this Summer. Our expansion
continues this Winter with our Rome and Milan bases each getting two more
aircraft. Our Frankfurt, Stockholm and Glasgow bases welcome one additional
plane each, and our London Luton base rises from one 737-200 to four
737-800's. This Winter will also see Ryanair open five new destinations with
low fare flights to Riga (Latvia), Santander, Seville and Valencia (Spain)
and Porto (Portugal).
"Despite intense price competition and our own considerable growth, the
yield decline of 5% for the half year was at the better end of our -5% to
-10% guidance. We attribute this to a combination of slightly better peak
Summer yields and the initial impact of the multiple fuel surcharges imposed
by many of our high fare competitors which has increased the price
differential, making Ryanair's low fares even more attractive to consumers.
"Unit costs remained flat for the first half due to higher fuel and route
charges which rose at a much faster rate than traffic growth. Excluding fuel
and route charges, all other unit costs were reduced by 4% thanks to the
addition of more cost efficient Boeing 737-800s, new lower cost airport
agreements, and continuing tight control over all other costs. We continue
to aggressively attack costs and have recently agreed the forward sale of
our remaining 737-200 fleet for $10m as well as a new 10 year engine
maintenance contract with General Electric (GE) which locks away significant
cost reductions.
"Our focus on continuously improving our No.1 customer service package
remains relentless. We have again reduced Europe's lowest fares by 5% whilst
delivering our passengers the best punctuality with the least cancellations
and fewest lost bags in the industry. The UK CAA recently released on time
statistics confirmed Ryanair as the No.1 on-time major airline operating to/
from the main UK airports. In addition Ryanair customers are enjoying these
benefits on a fleet of brand new Boeing 737-800 aircraft, with all leather
seating, through convenient local airports using Europe's largest travel
website. Ryanair will shortly be the first low fares airline in the world to
introduce an Inflight Entertainment System (IFE) for all passengers
featuring latest Hollywood movies, chart topping music videos, kids
cartoons, sitcoms and audio CDs. Ryanair's customer service offering is now
superior to all of our high fare competitors and our rapid growth in traffic
and market share testifies to this fact.
"In Ireland we regret that the Minister for Transport who has spent two
years trying to introduce real competition at the Government owned airport
monopoly was moved to a different portfolio. We hope the new Minister will
move quickly to promote the development of competing independent terminals
at Dublin Airport. The 31st October last marks the second anniversary of
this Government's receipt of 13 separate offers to develop a competing
second terminal at Dublin. Despite enormous support from the entire tourism
industry not one inch of progress has been made in two years to introduce
competition to the Dublin Airport monopoly. We are concerned that the new
Dublin Airport Authority has taken over where the old monopoly left off with
an unnecessary proposal to build a second runway and waste EUR120m. The two
existing runways at Dublin have just 16m passengers annually compared to the
40m passenger traffic on the single runway at Gatwick. What Dublin needs is
competing terminals not "Cartier runways". The Dublin Airport monopoly has
repeatedly failed its customers, and we urge the Government to fix this by
introducing competing terminals at Dublin which will revolutionise Irish
tourism.
"The enormous impact of record fuel prices on the airline industry will
impact future guidance. In November last year (during the run up to the Iraq
War) when the cost per barrel surged we stopped our forward hedging policy.
From November 2004 we are unhedged and will continue to remain so until
forward rates return towards their previous "normal" levels. As usual much
of the commentary on fuel prices in Ryanair has been hyperbolic. Ryanair can
absorb much higher oil prices than its competitors and still offer the
lowest air fares. We remain by some distance the most profitable airline in
Europe. $50 a barrel for Brent crude for the remainder of this fiscal year
will add some EUR55m to our total budgeted costs. However the multiple fuel
surcharging policy of our competitors has seen our rate of yield decline
ease. These stronger than expected yields will partially offset our higher
fuel costs.
"Furthermore, many of our competitor airlines who were losing money
heroically when fuel was $25 per barrel are doomed the longer it stays at
$50. Our prediction of a bloodbath and airline casualties this Winter may be
accelerated by record high oil prices as well as irrational competition.
Just two weeks ago V-Bird in Germany closed, and we believe it will be
followed by other failures this Winter and beyond. Despite this environment
Ryanair's world record margins enables us to absorb higher fuel prices -
without resorting to surcharges - and still remain Europe's fastest growing
most profitable airline.
"We remain cautious in our outlook for the remainder of the fiscal year. We
expect to achieve significant increases in passenger volume growth this
fiscal year and increased load factors. We anticipate that yield attrition
in Q3 and Q4 will now be better than our original -10% to -20% forecast and
based on current financial booking trends should finish in the -5% to -10%
range. This will help to partially offset higher fuel prices for the second
half. We anticipate that there will be further airline casualties as the
"perfect storm" of declining fares and record high oil prices force loss
making carriers out of the industry. Despite increases in route charges and
fuel prices we continue to generate better margins than all of our
competitors. With the lowest cost base, the lowest fares and industry
leading customer service, we believe that Ryanair will continue to grow
profitably to the benefit of our customers, our people and our
shareholders".
ENDS. Tuesday, 2nd November 2004
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 189 low fare routes
to 91 airports across 17 countries. Ryanair operates a fleet of 78
aircraft, and firm orders for up to a further 96 new 737-800's which
will be delivered over the next 5 years. Ryanair currently employs a
team of 2,300 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 Half Year Half Year
ended ended ended ended
Sept 30, Sept 30, Sept 30, Sept 30,
2004 2003 2004 2003
EUR'000 EUR'000 EUR'000 EUR'000
Operating Revenues
Scheduled revenues 358,585 309,509 617,644 523,540
Ancillary revenues 59,759 41,709 103,448 72,834
Total operating revenues
-continuing operations 418,344 351,218 721,092 596,374
Operating expenses
Staff costs 35,184 31,576 69,259 61,478
Depreciation
and amortisation 21,333 23,682 44,904 46,719
Other operating expenses
Fuel & Oil 61,908 43,688 113,750 84,346
Maintenance, 10,825 11,003 24,898 22,187
materials and
repairs
Marketing and 3,509 2,300 10,775 9,983
distribution
costs
Aircraft rentals 8,152 2,214 16,236 3,720
Route charges 34,721 27,740 67,926 52,889
Airport and 46,052 37,562 90,322 72,079
Handling charges
Other 25,931 21,240 47,505 39,686
Total
operating expenses 247,615 201,005 485,575 393,087
Operating
profit before
non-recurring
items, and goodwill 170,729 150,213 235,517 203,287
Aircraft
retirement costs - (2,718) - (2,718)
Buzz
re-organisation costs - - - (3,012)
Amortisation
of goodwill (586) (587) (1,172) (1,171)
(586) (3,305) (1,172) (6,901)
Operating
profit after
non-recurring
items, and goodwill 170,143 146,908 234,345 196,386
Other income/(expenses)
Foreign
exchange (losses)/gains (874) 1,240 (759) 1,433
Gain/(loss) on
disposal of fixed assets - (8) 6 (8)
Interest
receivable and
similar income 6,759 6,057 12,818 12,527
Interest
payable and
similar charges (13,291) (11,727) (25,921) (22,803)
Total other
income/(expenses) (7,406) (4,438) (13,856) (8,851)
Profit before
taxation 162,738 142,470 220,489 187,535
Tax on profit
on ordinary
activities (15,183) (14,049) (20,380) (18,594)
Profit for the
period 147,555 128,421 200,110 168,941
Earnings per ordinary share
-Basic(Euro cent) 19.43 16.95 26.35 22.34
-Diluted(Euro cent) 19.31 16.76 26.18 22.09
Adjusted earnings per ordinary share*
-Basic(Euro cent) 19.51 17.39 26.51 23.21
-Diluted(Euro 19.39 17.19 26.33 22.95
cent)
Number of ordinary shares(in 000's)
-Basic 759,351 757,477 759,315 756,341
-Diluted 764,183 766,342 764,343 764,799
* Calculated on Profit for the period before non-recurring items (net of tax),
and Goodwill.
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheets in
accordance with
UK and Irish GAAP(unaudited)
Sept 30, March 31,
2004 2004
EUR'000 EUR'000
Fixed assets
Intangible Assets 43,327 44,499
Tangible assets 1,738,458 1,576,526
Total fixed assets 1,781,785 1,621,025
Current assets
Cash and
liquid resources 1,421,703 1,257,350
Accounts receivable 16,806 14,932
Other assets 21,259 19,251
Inventories 26,469 26,440
Total current assets 1,486,237 1,317,973
Total assets 3,268,021 2,938,998
Current liabilities
Accounts payable 75,362 67,936
Accrued
expenses and
other liabilities 356,957 338,208
Current
maturities of long term debt 91,932 80,337
Short term
borrowings 657 345
Total current
liabilities 524,907 486,826
Other liabilities
Provisions for
liabilities and charges 107,980 94,192
Other creditors 27,551 30,047
Long term debt 951,985 872,645
Total
other liabilities 1,087,516 996,884
Shareholders' funds - equity
Called - up share capital 9,644 9,643
Share premium account 560,605 560,406
Profit and
loss account 1,085,349 885,239
Shareholders'
funds - equity 1,655,598 1,455,288
Total
liabilities
and shareholders' funds 3,268,021 2,938,998
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statements in
accordance
with UK and Irish GAAP (unaudited)
Half Year Half Year
ended ended
Sept 30, Sept 30,
2004 2003
EUR'000 EUR'000
Net cash inflow from operating
activities 296,297 253,122
Returns on investments and servicing
of finance (12,640) (7,774)
Taxation (38) 814
Capital expenditure (including
aircraft deposits) (208,496) (283,630)
Acquisitions including onerous lease
payments (2,218) (20,795)
Net cash inflow/(outflow) before
financing and management of liquid
resources 72,905 (58,263)
Financing 91,136 159,450
(Increase) in liquid resources (164,675) (141,306)
(Decrease) in cash (634) (40,119)
Analysis of movement in
liquid resources
At beginning of year 1,231,572 982,352
Increase in period 164,675 141,306
At end of period 1,396,247 1,123,658
Analysis of movement in
cash
At beginning of year 25,433 76,550
Net cash (outflow) during (634) (40,119)
period
At end of period 24,799 36,431
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
April 1, 2004 9,643 560,406 885,239 1,455,288
Issue of
ordinary equity
shares 1 199 - 200
Profit for
the period - - 200,110 200,110
Balance at Sept
30, 2004 9,644 560,605 1,085,349 1,655,598
Reconciliation of adjusted
earnings per share (unaudited)
Quarter Quarter Half Year Half Year
ended ended ended ended
Sept 30, Sept 30, Sept 30, Sept 30,
2004 2003 2004 2003
EUR'000 EUR'000 EUR'000 EUR'000
Profit for the
period under UK
and Irish GAAP 147,555 128,421 200,110 168,941
Adjustments
-------------
Aircraft
retirement
costs 2,718 - 2,718
Buzz
re-organisation
costs - - - 3,012
Amortisation of
goodwill 586 587 1,172 1,171
Taxation
adjustment for
above - - - (305)
Adjusted profit
under UK and
Irish GAAP 148,140 131,726 201,282 175,537
Number of ordinary
shares(in 000's)
-Basic 759,351 757,477 759,315 756,341
-Diluted 764,183 766,342 764,343 764,799
Adusted earnings
per ordinary
share
-Basic(EUR 19.51 17.39 26.51 23.21
cent)
-Diluted(EUR 19.39 17.19 26.33 22.95
cent)
Ryanair Holdings plc and Subsidiaries
Consolidated Profit and Loss Accounts in accordance
with US GAAP (unaudited)
Quarter Quarter Half Year Half Year
ended ended ended ended
Sept 30, Sept 30, Sept 30, Sept 30,
2004 2003 2004 2003
EUR'000 EUR'000 EUR'000 EUR'000
Operating Revenues
Scheduled
revenues 358,585 309,509 617,644 523,540
Ancillary
revenues 59,759 41,709 103,448 72,834
Total
operating
revenues
-continuing
operations 418,344 351,218 721,092 596,374
Operating
expenses
Staff costs 35,144 31,376 69,179 61,058
Depreciation
and
amortisation 22,111 23,682 45,682 46,719
Other operating expenses
Fuel & Oil 61,908 43,688 113,750 84,346
Maintenance, 10,825 11,003 24,898 22,187
materials and
repairs
Marketing and 3,509 2,300 10,775 9,983
distribution
costs
Aircraft 8,152 2,214 16,236 3,720
rentals
Route 34,721 27,740 67,926 52,889
charges
Airport and 46,052 37,562 90,322 72,079
Handling
charges
Other 25,909 21,218 47,461 39,642
Total
operating
expenses 248,331 200,783 486,229 392,623
Operating
profit before
non-recurring
items 170,014 150,435 234,863 203,751
Aircraft
retirement
costs - (2,718) - (2,718)
Buzz
re-organisatio
n costs - - - (3,012)
Operating
profit after
non-recurring
items 170,014 147,717 234,863 198,021
Other income/(expenses)
Foreign
exchange
(losses)/gains (874) 1,240 (759) 1,433
Gain/(loss) on
disposal of
fixed assets - (8) 6 (8)
Interest
receivable and
similar income 6,759 6,057 12,818 12,527
Interest
payable and
similar
charges (11,355) (9,859) (22,085) (19,112)
Total other
income/(expenses) (5,470) (2,570) (10,020) (5,160)
Profit on
ordinary
activities
before
taxation 164,544 145,147 224,844 192,861
Tax on profit
on ordinary
activities (15,431) (14,308) (20,869) (19,108)
Net income 149,113 130,839 203,975 173,753
Net income per
ADS
-Basic(Euro 98.18 86.36 134.32 114.86
cent)
-Diluted(Euro 97.56 85.37 133.43 113.59
cent)
Adjusted net income per ADS *
-Basic(Euro 98.18 88.16 134.32 118.45
cent)
-Diluted(Euro 97.56 87.14 133.43 117.14
cent)
Weighted Average number of shares
-Basic 759,351 757,477 759,315 756,341
-Diluted 764,183 766,342 764,343 764,799
* Calculated on Net Income before non-recurring items (net of tax).
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 Half Year ended
Sept 30, Sept 30, Sept 30, Sept 30,
2004 2003 2004 2003
EUR000 EUR000 EUR'000 EUR'000
Profit as reported in the
consolidated profit and
loss accounts in
accordance with UK
and Irish GAAP 147,555 128,421 200,110 168,941
Adjustments
Pension 40 200 80 420
Amortisation of
goodwill 586 587 1,172 1,171
Capitalised
interest (net of
amortisation)
regarding aircraft
acquisition
programme 1,158 1,868 3,058 3,691
Darley Investments
Limited 22 22 44 44
Taxation- effect of
above adjustments (247) (259) (489) (514)
Net income under US
GAAP 149,113 130,839 203,975 173,753
(B) Consolidated Cashflow Statements in
accordance with US GAAP
Half Year ended
Sept 30, Sept 30,
2004 2003
EUR'000 EUR'000
Cashflow from
operating
activities 283,619 246,162
Cash (outflow) from
investing
activities (566,193) (568,793)
Cash inflow from
financial
activities 91,448 159,136
Decrease in cash
and cash
equivalents (191,126) (163,495)
Cash and cash
equivalents at
beginning of year 744,605 537,476
Cash and cash
equivalents at end
of period 553,479 373,981
Cash and cash
equivalents under
US GAAP 553,479 373,981
Restricted cash 200,000 198,300
Deposits with a
maturity of between
three and six
months 668,224 588,810
Cash and liquid
resources under UK
and Irish GAAP 1,421,703 1,161,091
Ryanair Holdings plc and
Subsidiaries
Summary of significant differences between UK, Irish and US
generally accepted accounting principles (unaudited)
(C) Shareholders' funds -
equity
Sept 30, Sept 30,
2004 2003
EUR'000 EUR'000
Shareholders' equity as reported in the
consolidated balance
sheets (UK and Irish GAAP) 1,655,598 1,415,524
Adjustments:
Pension 3,280 3,531
Amortisation of goodwill 3,514 1,171
Capitalised interest (net of
amortisation) regarding aircraft
acquisition programme 20,560 13,980
Darley Investments Limited (107) (195)
Minimum pension liability (net
of (2,631) (2,656)
tax)
Unrealised losses on derivative
financial instruments (net of tax) (113,302) (70,013)
Tax effect of adjustments
(excluding pension & derivative
adjustments) (3,077) (2,189)
Shareholders' equity as adjusted to
accord with US GAAP 1,563,834 1,359,153
Opening shareholders' equity under
US GAAP 1,356,281 1,177,187
Comprehensive Income
Unrealised gains on derivative
financial instruments (net of tax) 3,379 3,358
Net income in accordance with US
GAAP 203,975 173,753
Total Comprehensive Income 207,353 177,111
Stock issued for cash 200 4,855
Closing shareholders' equity under
US GAAP 1,563,834 1,359,153
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 non-recurring costs and goodwill
referred to below.
Non-recurring costs consisted of Buzz re-organisation costs of EUR2.7m (net of
tax), and goodwill of EUR1.2m amounting to EUR3.9m (net of tax) in the half year
ended September 30, 2003 compared to EUR1.2m of goodwill in the period ended
September 30, 2004. During last year an additional amount of EUR2.7m was also
charged in the period arising from the write down in the residual value of
aircraft which was necessitated by the 'scribing' of five aircraft (Note 4).
Profit after tax increased by 18% to EUR200.1m during the six months compared to
last year. The adjusted profit for the half year, excluding non-recurring costs
and goodwill, increased by 15% to EUR201.3m.
Summary Half year ended September 30, 2004
Profit after tax increased by 15% to EUR201.3m, compared to EUR175.5m in the
previous half year ended September 30, 2003. These results were achieved by
strong growth in passenger volumes and continued tight cost control. Total
operating revenues increased by 21% to EUR721.1m, which is slower than the 24%
growth in passenger volumes, and reflects the competitive fare environment, and
the company's objective of continuing to drive down average fares. Average fares
have however declined at the better end of the 5% to 10% range that we had
originally forecast. The combination of lower fares, the successful launch of
new routes and the slower rate of growth resulted in the Passenger Load Factor
increasing from 83% to 87% during the period.
Total operating expenses increased by 24% to EUR485.6m, 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. Operating
expenses were also adversely impacted by the strengthening of the sterling to
euro exchange rate. Operating margins declined by 1% which in turn resulted in
Operating profit increasing by 16% from EUR203.3m to EUR235.5m. Profit after tax
has increased by 15%, slightly less than the growth in Operating profit and
reflects the higher net interest charge resulting primarily from the increased
level of debt during the period. Net Margins declined by 1 point to 28% for the
reasons outlined above.
Earnings per share have risen by 14% to 26.51 cent for the period.
Balance Sheet
The strong profit growth continues to positively impact the balance sheet with
Cash and Liquid Resources growing despite funding an additional EUR145.0m in
capital expenditure from internal resources. Cash balances at September 30, 2004
were EUR1,421.7m, an increase of EUR164.4m from March 31st 2004. Six aircraft
were delivered in the period which in addition to aircraft deposits accounted
for the bulk of the EUR208.5m incurred in capital expenditure. An additional
EUR90.9m of debt, net of repayments, was drawn down to part fund these aircraft
deliveries during the period. Shareholders' Funds at September 30, 2004 have
increased to EUR1,655.6m, compared to EUR1,455.3m at March 31, 2004.
Detailed Discussion and Analysis Half year ended September 30, 2004
Profit after tax, increased by 15% to EUR201.3m driven by strong growth in
passenger volumes and continued tight cost control. Operating margins declined
by 1% which has resulted in Operating profit increasing by EUR32.2m to EUR235.5m
compared to half year ended September 30, 2003.
Total operating revenues increased by 21% to EUR721.1m whilst passenger volumes
increased by 24% to 14.0m.
Scheduled passenger revenues increased by 18% to EUR617.6m 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 38 new
routes during the period, primarily offset by a 5% 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 87% in the period.
Ancillary revenues continue to perform strongly with revenues growing by 42% to
EUR103.4m 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 14% of total revenues compared to 12% last year.
Total operating expenses increased by 24% to EUR485.6m due to the increased
level of activity, and the increased costs primarily maintenance, fuel, aircraft
rentals, route charges and airport and handling costs associated with the growth
of the airline. The increase in total operating expenses were also due to the
higher level of activity and the stronger Sterling to Euro exchange rate partly
offset by a stronger Euro to US$ exchange rate.
Staff costs have increased by 13% to EUR69.3m. This increase primarily reflects
a 13% increase in average employee numbers to 2,531 and the impact of pay
increases of 3% granted during the period offset by the lower level of
productivity based payments as sectors flown increased by 10%.
Depreciation and amortisation declined by 4% to EUR44.9m. There are an
additional six 'owned' 737-800 aircraft in the fleet this year compared to last
year, however during the same period the company has retired three 737-200
aircraft. The resultant higher depreciation charge was offset by a combination
of lower amortisation due to the retirement of 737-200 aircraft and the positive
impact of a new maintenance deal 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 35% to EUR113.8m due to a 23% increase in the number of hours
flown, an increase in the average US$ cost per gallon of fuel offset by the
positive impact of the strengthening of the Euro to the US dollar during the
period.
Maintenance costs increased by 12% to EUR24.9m 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.
Marketing and distribution costs increased by 8% to EUR10.8m due to higher spend
on promoting new routes and an increase in the level of activity during the
period.
Aircraft rental costs increased by EUR12.5m to EUR16.2m reflecting the increased
costs associated with the lease of ten 737-800 aircraft which were delivered in
the period to March 31, 2004 offset by the return to KLM of four BAE 146
aircraft earlier this year.
Route charges increased by 28% to EUR67.9m due to an increase in the number
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 25% to EUR90.3m, 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 20% to EUR47.5m, 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 remained very strong at 33% for the period due to the
reasons outlined above which has resulted in Operating profits increasing by 16%
to EUR235.5m.
Interest receivable has only increased by EUR0.3m despite an increase in the
level of cash and liquid resources and highlights the lower deposit interest
rates earned in the period compared to last year. Interest payable increased by
EUR3.1m 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 strong growth in
profits during the period. The Company generated cash from operating activities
of EUR296.3m, which part funded additional capital expenditure of EUR208.5m
Capital expenditure primarily comprised of the delivery of 6 aircraft and
further advance payments for future aircraft deliveries. Long term Debt, net of
repayments increased by EUR90.9m which was drawn down to part fund aircraft
deliveries during the period. Cash and liquid resources continued to reflect the
strong trading performance of the company during the period and at September 30,
2004 stood at EUR1,421.7m compared to EUR1,257.4 at March 31, 2004.
Shareholders' Funds at September 30, 2004 have increased to EUR1,655.6m compared
to EUR1,455.3m at March 31, 2004.
Detailed Discussion and Analysis Quarter Ended September 30, 2004
Profit after tax, increased by 12% to EUR148.1m driven by strong growth in
passenger volumes and continued tight cost control. Operating margins have
remained strong at 41% although slightly down on last year, which has resulted
in Operating profit increasing by EUR20.5m to EUR170.7m compared to quarter
ended September 30, 2003.
Total operating revenues increased by 19% to EUR418.3m whilst passenger volumes
increased by 20% to 7.4m.
Scheduled passenger revenues increased by 16% to EUR358.6m due to a combination
of increased passenger volumes on existing routes, the successful launch of new
bases at Rome-Ciampino and Barcelona-Girona offset by a 3% reduction in average
fares. The strong growth in passenger volumes is also reflected in the
improvement in the load factor achieved, which rose from 87% to 90% in the
quarter.
Ancillary revenues increased 43% to EUR59.8m, a faster growth rate than
passenger volumes, reflecting a strong performance 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 14% of total
revenues compared to 12% for the same period last year.
Total operating expenses increased by 23% to EUR247.6m 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 increases in the
average sector length and the strengthening of the sterling exchange rate
against the euro whilst higher US$ fuel prices were partly offset by the
strength of the euro exchange rate against the US$.
Staff costs have increased by 11% to EUR35.2m primarily reflecting an increase
in average employee numbers to 2,595 and the impact of pay increases of 3%
granted during the period, offset by the lower level of productivity based pay
as sectors flown increased by 9%.
Depreciation and amortisation decreased by 10% to EUR21.3m. A higher
depreciation charge due to an increase in the size of the 'owned' fleet from 56
to 60, offset by a lower amortisation charge due to the retirement of 737-200
aircraft and the positive impact of a new engine maintenance deal on the cost of
amortisation of 737-800 aircraft. The strengthening of the euro to US$ also had
a positive impact on the depreciation and amortisation charge.
Fuel costs rose by 42% to EUR61.9m due to an increase in the number of sectors
flown, a 10% increase in sector length, and a higher average US$ cost per gallon
of fuel offset by the positive impact of the strengthening of the Euro to the US
dollar during the period.
Maintenance costs decreased by 2% to EUR10.8m reflecting the improved
reliability arising from the higher proportion of 737-800 operated and a lower
level of maintenance costs incurred due to the return of four BAE 146 aircraft
to KLM earlier in the year.
Marketing and distribution costs increased by 53% to EUR3.5m due to a higher
promotional spend, and increased costs associated with the higher level of
activity.
Aircraft rental costs increased by EUR5.9m to EUR8.2m reflecting the increased
costs arising from the lease of ten 737-800 aircraft which were delivered in the
quarter to March 31, 2004 offset by the return of four BAE 146s to KLM.
Route charges increased by 25% to EUR34.7m 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), and the negative
impact of the strengthening of sterling against the Euro.
Airport and handling charges increased by 23% 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 22% to EUR25.9m, 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 remained very robust at 41% although they were 1% lower
than last year, due to the reasons outlined above which has resulted in
Operating profits increasing by 14% to EUR170.7m during the quarter.
Interest receivable has increased by EUR0.7m 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 EUR1.6m due to the drawdown of debt to part fund the purchase of
new aircraft.
Notes to the Financial Statements
1. Accounting Policies
The accounting policies followed in the preparation of these consolidated
financial statements for the half year ended September 30, 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
Half year ended September 30, 2004 on October 29th, 2004.
3. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the Half year ended
September 30, 2004 are based on the results reported under Irish and UK
GAAP.
4. Aircraft retirement costs
Five 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 was reflected in the results for Quarter ended
September 30, 2003.
Independent review report by KPMG to Ryanair Holdings plc
Introduction
We have been instructed by the company to review the financial information set
out on pages 1 to 7 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Irish Stock Exchange which require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where they are to be
changed in the next annual accounts in which case any changes, and the reasons
for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board. A review consists principally of making enquiries of group management and
applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise disclosed. A review
is substantially less in scope than an audit performed in accordance with
Auditing Standards and therefore provides a lower level of assurance than an
audit. Accordingly we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2004.
KPMG
Chartered Accountants 29th October 2004
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: 2 November 2004
By:___/s/ Howard Millar____
H Millar
Company Secretary & Finance Director