Ryanair FY14 Profit Down, Sees Growth In FY15 Profit, Traffic; Stock Rises

(RTTNews) - Irish low-cost airline Ryanair Holdings Plc (RYA.L, RYAAY) reported Monday a decline in fiscal 2014 profit, mainly reflecting a 4 percent drop in fares, weaker Sterling, and higher fuel costs. Revenues increased with higher ancillary revenues and traffic. Looking ahead, the company projects increased profit and traffic for fiscal 2015. In London, the stock is gaining around 5 percent in the morning trading.

For the year 2014, the company's net profit, on IFRS basis, declined 8 percent to 523 million euros from last year's 569 million euros. Earnings per share dropped 6 percent to 36.96 euro cents from 39.45 euro cents a year ago.

Revenue for the year amounted to 5.04 billion euros, a 3 percent increase from 4.88 billion euros reported a year back. Ancillary revenues advanced 17 percent, much faster than traffic growth, and now accounts for 25 percent of total revenues, the company said.

Traffic grew 3 percent to 81.7 million passengers from 79.3 million passengers in the previous year. Load factor increased 1 percent to 83 percent.

Revenue per passenger was flat, as strong ancillary revenue growth offset a fall in average fares. Excluding fuel, sector length adjusted unit costs declined 3 percent.

In a weaker environment, the company noted that it lowered its fares and improved customer experience, resulting in second-half traffic growing 4 percent as load factors improved by 1 percent.

The company further noted that its forward bookings for Summer 14 are significantly ahead of last year since it began offering lower fares and released seasonal schedules earlier, and would continue to deliver 2 percent higher load factors.

Looking ahead to fiscal 2015, Ryanair expects a strong first half, but a weaker second half, would generate a significant increase in after tax profits to a range between 580 million euros and 620 million euros.

The company expects traffic to increase 4 percent to over 84.6 million as load factors increase 2 percent to 85 percent and with the addition of some limited new route and capacity growth.

According to the firm, most of the projected traffic growth would be skewed towards the second half as it reduce winter grounding to approximately 50 aircraft in fiscal 2015 from 70 aircraft last year.

The company also expects fares to rise by up to 2 percent in the new year, following a decline last year. The first-half fares would rise by up to 6 percent due in part to Easter, stable growth in the second quarter, and stronger forward bookings and load factors.

Meanwhile, the company remains very cautious about the second half due to last winter's weak price environment, and expects its commitment to 6 percent capacity growth could cause fares in this period to fall by as much as 6 percent to 8 percent.

Ryanair also projects flat unit costs, while fuel costs will be lower than last year as 90 percent are hedged.

Further, Ryanair said it would return a further 500 million euros to shareholders in the fourth quarter through a special dividend subject to AGM approval.

In London, Ryanair stock is gaining 0.30 euros or 4.69 percent, and trading at 6.65 euros.