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, 2003
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 BEAT EXPECTATIONS FOR HALF YEAR
ENDED 30 SEPT'03 PROFITS RISE BY 16% to EUR176M
AS AIRLINE REDUCES FARES BY 12% AND
INCREASES TRAFFIC BY 45%
Ryanair, Europe's No.1 low fares airline today (Monday 3 Nov 2003) released
financial results for the half year ended 30th September 2003 showing record
profit and traffic growth, whilst passing on fares that are 12% lower than the
equivalent period last year.
Summary Table of Results (Irish GAAP) - in Euro
Half year ended Sept 30,2002 Sept 30, 2003 % Increase
Passengers 7.8m 11.3m 45%
Revenue EUR464.6m EUR596.4m 28%
Adjusted Profit after EUR150.9m EUR175.5m 16%
tax Note 1
Adjusted EPS (Euro 19.99 23.21 16%
Cent) Note 1
Note 1: Adjusted profit after tax and EPS, excludes the exceptional
costs of EUR5.4m and a Goodwill charge of EUR1.2m
Traffic for the six months grew by 45% to 11.3m, average fares declined by 12%
for the half year. Total revenues rose by 28%, operating costs rose by 32%,
whilst after tax margins declined as predicted from 32% to 29% for the half
year. Adjusted net profit after tax rose by over 16% to a record EUR175.5m.
Announcing these lowest ever fares and record profits, Ryanair's Chief
Executive, Michael O'Leary said;
"These results demonstrate another strong performance from Ryanair's low
fares model which continues to grow profitably in adverse market conditions
across Europe. The strength of our traffic and profit growth, as well as the
exceptional margins, once again proves our doubters wrong. As Southwest
Airlines has proven for over 30 years, the low fares model (if properly
implemented) works, it delivers extraordinary growth and exceptional
profitability in an industry more often characterised by losses.
"During a period impacted by a war in Iraq, high oil prices, and a depressed
economic environment in Europe, Ryanair has taken delivery of 18 new Boeing
aircraft, acquired, restructured and relaunched Buzz, opened two new bases
in Milan Bergamo and Stockholm Skavsta, and launched over 50 new routes.
"Having increased seat capacity this Summer by over 50% and launched so many
new routes it was inevitable that load factors would decline - as predicted
- from last year's record levels. Most of these new routes have performed
extremely well and we are now running slightly ahead of our expectation of a
5% load factor decline for the year. Although yields continue to be softer
than we expected we will continue to drive down fares in all markets, whilst
offering more choice, better service and lowest ever prices to our
customers.
"Of the two new bases this year Milan has, as expected, been the better
performer this Summer. Load factors at the Stockholm base have been slightly
lower, largely as a result of lower than expected load factors on the three
intra-Scandinavian routes (Aarhus, Oslo, and Tampere) and we are in
discussions with our partners at Stockholm Skavsta Airport which will see us
either bring the performance of these routes up to acceptable load factors
or alternatively replace them with new international destinations from
Stockholm. Some of our new routes from Stansted this Summer, particularly to
the low countries and one or two French destinations have also
underperformed. Unless there is a significant improvement in load factors
through the Winter, then we will replace a small number of these with
alternative destinations and services, by selecting from some of the 50 new
airports that we are currently in discussions with.
"At a time when many European airlines are announcing losses or steep falls
in profits, Ryanair is continuing to grow profitably. This Winter we will
operate 13 new routes as follows:
Birmingham-Girona Glasgow-Shannon
Birmingham-Murcia London-Baden Baden
Bournemouth-Girona London-Reus
Frankfurt-Alghero London-Tampere
Frankfurt-Venice London-Valladolid
Glasgow-Gothenburg Stockholm-Brussels
Glasgow-Milan
"We continue to meet and defeat attempts by our high fare flag carrier
competitors to limit Ryanair's growth, to block competition and lower fares
in regional markets in Europe. In recent weeks an effort by SAS to block our
operations at Aarhus has been dismissed; claims by Air Mediterranee that its
traffic has declined as a result of Ryanair's low fares services on the
London-Pau route have been disproved by official CAA traffic statistics;
attempts by Dusseldorf Airport and Lufthansa to block Dusseldorf designation
for Niederhein Airport have been defeated and the Norwegian CAA has also
thrown out complaints from SAS about Ryanair's cost base at Haugesund.
"We continue to await a final decision of the European Commission on the
Charleroi investigation, but remain confident that Commissioner de Palacio
will put in place a framework that will encourage and enable publicly owned
airports such as Charleroi and Strasbourg to compete on a level playing
field with the many privately owned airports around Europe. These publicly
owned secondary and regional airports must be allowed and encouraged to
participate in the low fares, high growth, traffic and tourism revolution.
"At a time when the high fare flag carriers are entering into anti-consumer
alliances around Europe, we believe the Commission is extremely focused on
the fact that the development of Europe's regions - and competition in air
travel - depends on the growth of direct low fare flights. This is vital
when the flag carriers are focusing on adding frequency and increasing
prices on connecting flights across a small number of congested hub airports
in Europe. The threat to consumers and air travel has recently been
demonstrated by Britair/Air France's return to a monopoly service on the
Strasbourg-London route with same day return fares that start from a lowest
price of almost EUR800 return from Strasbourg, a fare that is over 40
times more expensive that the lowest fare on sale from Ryanair for a similar
itinerary.
"As always our focus in Ryanair continues to be on cost reduction. We are
currently finalising negotiations with financial institutions for new and
lower cost financing for some of our new 737-800 series deliveries. Going
forward it will be Ryanair's policy to own outright a majority of these
aircraft, but to lease a significant minority. The next 10 aircraft for
delivery in early 2004 will be financed under long-term low cost operating
leases which benefit from Ryanair's extremely low purchase price, resulting
in highly competitive monthly lease rentals. The financing of a significant
portion of Ryanair's new aircraft deliveries in this manner over the coming
years will significantly boost Ryanair's cashflow and ensure that the
airline continues to maintain a substantial net cash position on its balance
sheet, allowing Ryanair to continue to be amongst the best financed airlines
in the world.
"We remain dismayed at the continuing inactivity of the Irish Government in
implementing its own election program to bring forward competition and low
cost efficient facilities at the Irish airports. Costs at the three Irish
airports, whilst not a material issue for Ryanair any more, will rise
substantially next year. Access costs and fares to Ireland will rise in line
with these totally unnecessary price increases at a time when Irish tourism
is crying out for new routes and lower access fares.
"It is now over 12 months since the Government received 13 expressions of
interest from a wide range of aviation companies to finance and build
multiple competing terminals at Dublin Airport and still we have seen no
action whatsoever to introduce this desperately needed competition. It is
time the Irish Government "got real" and proceeded with its stated policy of
breaking the airport monopoly into three competing companies and expedite
the development of competing terminals at Dublin Airport.
"Looking forward for the remainder of the fiscal year, we remain confident
that traffic growth will continue to be strong, but cautious about fares and
yields. We expect that average yields will continue to decline by between
10% and 15% compared to those charged last year, and remain equally
determined that Ryanair will continue to be the lowest fare airline in every
market in which we operate. Accordingly we expect profits to grow
materially, as we continue to maintain our margins in excess of 20%. The one
key difference between Ryanair and all the other low fare imitators here in
Europe is that only one airline - Ryanair - offers the lowest fares and has
the lowest costs. Ryanair will continue to drive down costs and prices and
by so doing, we will continue to replicate the success of other industry
price leaders such as Southwest, Dell and Wal-Mart and deliver superior
returns for shareholders".
To celebrate these excellent results in traditional Ryanair fashion we are
offering one million seats at just GBP1 each (plus taxes and charges). This
offer is available for sale immediately on www.ryanair.com on all routes from
London with seats available every day of the week. Booking must end at midnight
on Thursday so book early as demand is bound to be very strong for this
phenomenal offer. Don't give up the day job - just take a GBP1 getaway with
Ryanair!
ENDS. Monday, 3rd November 2003
For results and further information Howard Millar Pauline McAlester
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 136 low fare routes
across 16 countries. Ryanair operates a fleet of 68 aircraft, with firm
orders for up to a further 112 new Boeing 737-800's which will be delivered
over the next 6 years. Ryanair currently employs a team of 2,200 people and
expects to carry almost 24 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,
2003 2002 2003 2002
EUR'000 EUR'000 EUR'000 EUR'000
------- ------- ------- -------
Operating Revenues
Scheduled revenues 309,509 238,346 523,540 411,107
Ancillary revenues 41,709 31,981 72,834 53,482
-------- ------- ------- --------
Total operating revenues
-continuing operations 351,218 270,327 596,374 464,589
-------- ------- ------- --------
Operating expenses
Staff costs 31,576 23,307 61,478 46,732
Depreciation and amortisation 23,682 19,490 46,719 37,863
Aircraft retirement costs 2,718 - 2,718 -
Other operating expenses
Fuel & Oil 43,688 34,777 84,346 68,422
Maintenance,
materials and
repairs 11,003 7,694 22,187 17,143
Marketing and
distribution
costs 2,300 2,622 9,983 8,107
Aircraft rentals 2,214 - 3,720 -
Route charges 27,740 17,259 52,889 33,750
Airport and
Handling charges 37,562 28,043 72,079 56,206
Other 21,240 14,995 39,686 28,871
-------- ------- ------- --------
Total operating expenses 203,723 148,187 395,805 297,094
-------- ------- ------- --------
Operating profit before
exceptional items
and goodwill 147,495 122,140 200,569 167,495
Buzz re-organisation costs - - (3,012) -
Amortisation of goodwill (587) - (1,171) -
-------- ------- ------- --------
(587) - (4,183) -
-------- ------- ------- --------
Operating profit after
exceptional items and goodwill 146,908 122,140 196,386 167,495
-------- ------- ------- --------
Other income/(expenses)
Foreign exchange gains/
(losses) 1,240 1,860 1,433 (721)
(Loss) on disposal of fixed
assets (8) 1 (8) (21)
Interest receivable and
similar income 6,057 9,003 12,527 16,005
Interest payable and similar
charges (11,727) (7,660) (22,803) (14,054)
-------- ------- ------- --------
Total other income/
(expenses) (4,438) 3,204 (8,851) 1,209
-------- ------- ------- --------
Profit before taxation 142,470 125,344 187,535 168,704
Tax on profit on ordinary
activities (14,049) (13,362) (18,594) (17,758)
-------- ------- ------- --------
Profit for the period 128,421 111,982 168,941 150,946
======== ======= ======= ========
Earnings per ordinary share
-Basic(Euro cent) 16.95 14.83 22.34 19.99
-Diluted(Euro cent) 16.76 14.64 22.09 19.72
Adjusted Earnings per
ordinary share*
-Basic(Euro cent) 17.39 14.83 23.21 19.99
-Diluted(Euro cent) 17.19 14.64 22.95 19.72
Number of ordinary shares(in 000's)
-Basic 757,477 755,031 756,341 755,031
-Diluted 766,342 765,016 764,799 765,377
* Calculated on Profit for period before exceptional items(net of tax) and
Goodwill and excluding Aircraft retirement costs
Page 1
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheets in accordance with
UK and Irish GAAP(unaudited)
Sept 30, March 31,
2003 2003
EUR'000 EUR'000
------- -------
Fixed assets
Tangible assets 1,582,842 1,352,361
Aircraft deposits 0 0
Intangible Assets 45,670 -
------- -------
Total fixed assets 1,628,512 1,352,361
------- -------
Current Assets
Cash and liquid resources 1,161,091 1,060,218
Accounts receivable 11,032 14,970
Other assets 18,688 16,370
Inventories 24,153 22,788
------- -------
Total current assets 1,214,964 1,114,346
------- -------
Total assets 2,843,476 2,466,707
======= =======
Current liabilities
Accounts payable 64,435 61,604
Accrued expenses and other liabilities 276,551 251,328
Current maturities of long term debt 78,577 63,291
Short term borrowings 1,002 1,316
------- -------
Total current liabilities 420,565 377,539
------- -------
Other liabilities
Provisions for liabilities and charges 91,246 67,833
Accounts payable due after one year 2,898 5,673
Long term debt 913,243 773,934
------- -------
Total Other liabilities 1,007,387 847,440
------- -------
Shareholders' funds - equity
Called - up share capital 9,625 9,588
Share premium account 558,330 553,512
Profit and loss account 847,569 678,628
------- -------
Shareholders' funds - equity 1,415,524 1,241,728
------- -------
Total liabilities and shareholders'
funds 2,843,476 2,466,707
======= =======
Page 2
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statements in accordance
with UK and Irish GAAP (unaudited)
Ryanair Ryanair
Holdings plc Holdings plc
Half year Half year
ended ended
Sept 30, Sept 30,
2003 2002
EUR'000 EUR'000
------- -------
Net cash inflow from operating 253,122 204,908
activities
Returns on investments and servicing
of finance (7,774) 1,563
Taxation 814 (2,171)
Capital expenditure(including aircraft
deposits) (283,630) (140,516)
Acquisitions and disposals (20,795) -
------- -------
Aircraft deposits 0 0
------- -------
Net cash (outflow)/inflow before
financing and management of liquid resources (58,263) 63,784
Financing 159,450 61,918
(Increase) in liquid resources (141,306) (143,576)
------- -------
(Decrease) in cash (40,119) (17,874)
======= =======
Analysis of movement in liquid resources
At beginning of year 982,352 816,023
Increase in period 141,306 143,576
------- -------
At end of period 1,123,658 959,599
======= =======
Analysis of movement in cash
At beginning of year 76,550 77,747
Net cash (outflow) during period (40,119) (17,874)
------- -------
At end of period 36,431 59,873
======= =======
Page 3
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, 2003 9,588 553,512 678,628 1,241,728
Prior year adjustment 0 0 0 0
Issue of ordinary equity shares 37 4,818 - 4,855
Profit for the period - - 168,941 168,941
-------- ------- ------ -------
Balance at September 30, 2003 9,625 558,330 847,569 1,415,524
======== ======= ======= =======
Reconciliation of adjusted Earning per share (unaudited)
Quarter Quarter Half Year Half Year
ended ended ended ended
Sept, 30 Sept, 30 Sept, 30 Sept, 30
2003 2002 2003 2002
EUR'000 EUR'000 EUR'000 EUR'000
------- ------- ------- -------
Profit for the period under
UK and Irish GAAP 128,421 111,982 168,941 150,946
Adjustments
-------------
Aircraft retirement costs 2,718 - 2,718 -
Buzz re-organisation costs - - 3,012 -
Amortisation of goodwill 587 - 1,171 -
Taxation adjustment for above - - (305) -
-------- ------- ------- -------
Adjusted Profit under UK and
Irish GAAP 131,726 111,982 175,537 150,946
======== ======= ======= =======
Number of ordinary
shares(in 000's)
-Basic 757,477 755,031 756,341 755,031
-Diluted 766,342 765,016 764,799 765,377
Adjusted Earnings per
ordinary share
-Basic 17.39 14.83 23.21 19.99
-Diluted 17.19 14.64 22.95 19.72
Page 4
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,
2003 2002 2003 2002
EUR'000 EUR'000 EUR'000 EUR'000
Operating Revenues
Scheduled revenues 309,509 238,346 523,540 411,107
Ancillary revenues 41,709 31,981 72,834 53,482
-------- ------- ------- --------
Total operating revenues
-continuing operations 351,218 270,327 596,374 464,589
-------- ------- ------- --------
Operating expenses
Staff costs 31,376 23,036 61,058 46,222
Depreciation and
amortisation 23,682 19,490 46,719 37,863
Aircraft retirement costs 2,718 - 2,718 -
Other operating expenses
Fuel & Oil 43,688 34,777 84,346 68,422
Maintenance,
materials
and
repairs 11,003 7,694 22,187 17,143
Marketing and
distribution
costs 2,300 2,622 9,983 8,107
Aircraft rentals 2,214 - 3,720 -
Route charges 27,740 17,259 52,889 33,750
Airport and
Handling charges 37,562 28,043 72,079 56,206
Other 21,218 14,973 39,642 28,827
-------- ------- ------- --------
Total operating
expenses 203,501 147,894 395,341 296,540
-------- ------- ------- --------
Operating profit before
Buzz reorganisation costs 147,717 122,433 201,033 168,049
Buzz re-organisation costs - - (3,012) -
-------- ------- ------- --------
Operating profit after
Buzz reorganisation costs 147,717 122,433 198,021 168,049
-------- ------- ------- --------
Other income/(expenses)
Foreign exchange gains/
(losses) 1,240 (2,329) 1,433 (4,910)
(Loss) on disposal of
fixed assets (8) 1 (8) (21)
Interest receivable and
similar income 6,057 9,003 12,527 16,005
Interest payable and
similar charges (9,859) (6,527) (19,112) (11,914)
-------- ------- ------- --------
Total other income/
(expenses) (2,570) 148 (5,160) (840)
-------- ------- ------- --------
Profit on ordinary
activities before
taxation 145,147 122,581 192,861 167,209
Tax on profit on
ordinary activities (14,308) (12,685) (19,108) (17,222)
-------- ------- ------- --------
Net Income 130,839 109,896 173,753 149,987
======== ======= ======= ========
Net Income per ADS
-Basic(Euro
cent) 86.36 72.78 114.86 99.33
-Diluted
(Euro cent) 85.37 71.83 113.59 97.98
Adjusted Net Income per ADS *
-Basic(Euro
cent) 88.16 72.78 118.45 99.33
-Diluted
(Euro cent) 87.14 71.83 117.14 97.98
Weighted Average number
of shares
-Basic 757,477 755,031 756,341 755,031
-Diluted 766,342 765,016 764,799 765,377
(1)The U.S. GAAP Net income is after marking to market forward contracts.The
principal component of the notional loss is in relation to Stg:Euro contracts
which were entered into by the Company to protect surplus sterling receipts.
Under Irish/UK GAAP such notional gains/(losses) are not taken to the profit/
(loss) account.
* Calculated on Net Income before Buzz reorganisation costs (net of tax), and
Aircraft retirement costs
Page 5
Ryanair Holdings plc
and Subsidiaries
Summary of significant differences between UK, Irish and
US generally Accepted accounting principles(unaudited)
Note 1 -Restatement
of Comparative
Results
Under UK and Irish GAAP the Company changed the way in which it accounted for
airframe and engine maintenance checks to comply with the provisions of FRS
12 "Provisions, Contingent Liabilities and Contingent Assets" and FRS 15
"Tangible Assets". Maintenance is no longer provided for by accruing for the
future costs of checks but is capitalised as incurred and amortised. An element
of the cost of a newly acquired aircraft is also attributed to the condition of
its airframe and engines and amortised over the periods which benefit.
Under UK and Irish GAAP prior periods are restated for changes in accounting
policies. However under US GAAP, a change in accounting policy results in a
cumulative adjustment to income in the year of change. Prior year results are
not restated
Generally accepted accounting principles in Ireland and the United Kingdom vary
in certain significant respects from generally accepted accounting principles in
the United States as described in Note 29 to our consolidated financial
statements included in our 1999 Annual Report on Form 20-F.
(A) Net income
under US GAAP
Quarter ended Half Year ended
Sept 30, Sept 30, Sept 30, Sept 30,
2003 2002 2003 2002
EUR000 EUR000 EUR'000 EUR'000
------- ------- ------- -------
Profit as reported
in the consolidated
profit and
Loss accounts in
accordance with UK and
Irish GAAP 128,421 111,982 168,941 150,946
Adjustments
Pension 200 155 420 277
Derivative
financial
instruments(net of tax) - (4,189) - (4,189)
Amortisation of goodwill 587 - 1,171 -
Employment grants - 116 - 233
Capitalised interest
re aircraft acquisition
programme 1,868 1,133 3,691 2,140
Darley Investments Limited 22 22 44 44
Taxation- effect of
above adjustments (259) 677 (514) 536
------- ------- ------- -------
Net income under
US GAAP 130,839 109,896 173,753 149,987
======= ======= ======= =======
Cumulative effect of
accounting change
(net of tax) 0 0 0 0
------- ------- ------- -------
130,839 109,896 173,753 149,987
Page 6
Note: - under US GAAP changes in accounting policies are only reflected in the
quarter in which the change occurrs, accordingly the effect of changes to
maintenance, depreciation and tax will only be reflected in Quarter 4 1998 and
subsequent periods. See Page 5 for impact on 1998 comparatives.
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between UK, Irish and
US generally accepted accounting principles continued
(B) Consolidated
Cashflow Statements in
accordance With US GAAP
Half Year ended
Sept 30, Sept 30,
2003 2002
EUR'000 EUR'000
------- -------
Cash inflow from operating activities 246,162 204,300
Cash (outflow) from investing activities (568,793) (130,741)
Cash inflow from financial activities 159,136 67,145
------- -------
(Decrease)/increase in cash and cash equivalents (163,495) 140,704
Cash and cash equivalents at beginning of year 537,476 482,492
------- -------
Cash and cash equivalents at end of period 373,981 623,196
======= =======
Cash and cash equivalents under US GAAP 373,981 623,196
Restricted cash 198,300 -
Deposits with a maturity of between three and six months 588,810 407,008
------- -------
Cash and liquid resources under UK and Irish GAAP 1,161,091 1,030,204
======= =======
Page 6
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,
2003 2002
EUR'000 EUR'000
------- -------
Shareholders' equity as reported in the consolidated balance
Sheets (UK and Irish GAAP) 1,415,524 1,153,220
Adjustments:
Pension 3,531 2,691
Employment grants - (236)
Goodwill 1,171 -
Capitalised interest re aircraft acquisition programme 13,980 7,167
Darley Investments Limited (195) (283)
Investments - -
Minimum pension liability (net of tax) (2,656) -
Derivative financial instruments(net of tax) (70,013) (47,786)
Tax effect of adjustments (2,189) (1,224)
------- -------
Cumulative effect of change in accounting policies 0 0
------- -------
Shareholders' equity as adjusted to accord with US GAAP 1,359,153 1,113,549
======= =======
Opening shareholders' equity under US GAAP 1,177,187 1,019,607
Comprehensive Income adjustments
Investments - -
Unrealised Pension deficit(net of tax) - -
Unrealised gains/(losses) on derivative financial
instruments(net of tax) 3,358 (56,045)
------- -------
3,358 (56,045)
Net income in accordance with US GAAP 173,753 149,987
Stock issued for cash 4,855 -
------- -------
Closing shareholders' equity under US GAAP 1,359,153 1,113,549
======= =======
Page 7
Ryanair Holdings plc
Management Discussion and Analysis of Results
Introduction
Profit after tax increased by 12% to EUR168.9m including the exceptional costs
and goodwill arising from the "Buzz" acquisition. This profit also includes an
additional depreciation charge of EUR2.7m relating to an adjustment to the
residual value of 5 Boeing 737-200 aircraft that were retired earlier than
planned (see Note 4). Adjusted profit after tax (excluding Buzz exceptional
costs of EUR2.7m(net of tax), goodwill of EUR1.2m and aircraft depreciation of
EUR2.7m) increased by 16% to EUR175.5m. For the purposes of the MD&A the
discussion below is by reference to the adjusted profit and loss account
excluding the exceptional items referred to above.
Summary - Half Year ended September 30, 2003
Profit after tax has increased by 16% to EUR175.5m, compared to EUR150.9m in the
previous half year ended September 30, 2002 driven by continued strong growth in
passenger volumes and tight cost control partly offset by lower average fares.
Operating margins have decreased by 2 points to 34%. As a result of these
factors operating profit increased by EUR35.8m to EUR203.3m compared to half
year ended September 30, 2002.
Total operating revenues increased by 28% to EUR596.4m whilst passengers numbers
increased by 45% to 11.3m.
Scheduled Passenger revenues increased by 27% to EUR523.5m due to strong
passenger volume growth, offset by a 12% decline in average fares during the
period.
Ancillary revenue increased by 36% to EUR72.8m, which is less than the growth in
passenger volumes and reflects strong growth in non-flight scheduled revenue,
car hire and hotel revenue offset by the cessation of the charter programme as
Ryanair replaced charter capacity with scheduled services. Excluding charter
income ancillary revenue grew by 62%, a significantly faster rate than the
growth in passenger volumes.
Total operating expenses increased by 32% to EUR393.1m due to the increased
costs associated with the higher level of activity, primarily staff costs, fuel,
route charges, depreciation and airport & handing costs associated with the
growth of the airline. Operating costs continue to reflect the increased
operational efficiencies arising from the higher proportion of 737-800 aircraft
operated.
Other income/expenses declined significantly by EUR10.1m due to lower deposit
interest rates and higher interest payable charges arising from the increased
level of debt.
Net margins as a result of the above declined from 32% to 29% whilst net profit
increased by 16% to EUR175.5m.
Adjusted earnings per share has increased by 16% to 23.21 euro cent, which is in
line with the growth in adjusted Net Profit.
Balance Sheet
Cash and liquid resources have increased by EUR100.9m from 1,060.2m at March 31,
2003 to EUR1,161.1m at September 30, 2003, reflecting the increased cash flows
from the profitable trading performance during the period. Eight additional
aircraft were delivered in the period and these, in addition to aircraft
deposits, accounted for the bulk of the EUR283.6m incurred in capital
expenditure. This was part funded by the draw down of long term debt, which
increased, net of repayments, by EUR154.6m during the period. Shareholders'
funds at September 30, 2003 have increased to EUR1,415.5m, compared to
EUR1,241.7m at March 31, 2003.
Detailed Discussion and Analysis - Half Year ended September 30, 2003
Profit after tax has increased by 16% to EUR175.5m driven by strong growth in
passenger volumes at lower average fares and continued tight cost control.
Operating margins declined 2 points to 34% whilst net margins declined by 3
points to 29% compared to the previous period.
Total operating revenues increased by 28% to EUR596.4m whilst passenger volumes
increased by 45% to 11.3m.
Scheduled passenger revenues increased by 27% to EUR523.5m primarily due to
increased passenger numbers on new and existing routes, offset by a 12% decline
in average fares. The decline in average fares is due to the launch of new
routes and new bases, the weakness of sterling to the euro (which accounted for
6% of the decline), and Ryanair's policy of reducing airfares.
Ancillary revenues increased by 36% to EUR72.8m, which is lower than the growth
in passenger volumes, and reflects the cessation of the charter programme as
Ryanair replaced Charter capacity with scheduled services. Excluding charters
ancillary revenues increased by 62% due mainly to strong car hire revenues,
non-flight scheduled revenues, other ancillary product revenues.
Total operating expenses increased by 32% to EUR393.1m due to the increased
level of activity, and the increased costs primarily staff, depreciation, fuel,
route charges and airport & handling costs associated with the growth of the
airline.
Staff costs have increased by 32% to EUR61.5m. This increase reflects a 34%
increase in average employee numbers to 2,232, and the impact of a 3% pay
increase granted during the period offset by savings arising from the strength
of the euro exchange rate to sterling.
Depreciation and amortisation increased by 23% to EUR46.7m(excluding additional
depreciation charges on retired aircraft) due to an increase in the average
number of aircraft owned from 43 to 58 and the amortisation of capitalised
maintenance costs, offset by savings due to the increase in the number of
aircraft fully depreciated.
Fuel costs increased by 23% to EUR84.3m due to a 57% increase in the number of
hours flown, offset by a decrease in the average US$ cost per gallon, an
improvement in the fuel burn rate due to a higher proportion of 737-800 aircraft
operated, and the positive impact of the strengthening of the euro to the US$.
Maintenance costs increased by 29% to EUR22.2m reflecting an increase in the
size of the fleet operated, higher maintenance due to the acquisition of the
"Buzz" aircraft and an increase in the number of flight hours, offset by savings
due to improved reliability arising from the higher proportion of 737-800
aircraft as a percentage of the total fleet.
Marketing and distribution costs increased by 23% to EUR10.0m due to a higher
spend on the launch of new routes, and the additional costs associated with the
launch of two new bases at Milan-Bergamo and Stockholm-Skavsta.
Aircraft rental costs of EUR3.7m arose during the period reflecting the lease
rental costs associated with the acquired "Buzz" aircraft.
Route charges increased by 57% to EUR52.9m due to an increase in the number of
sectors flown, an increase in the average sector length and an increase in the
size of the aircraft operated which incur a higher charge, offset by the impact
of a weaker sterling to euro exchange rate.
Airport and handling charges increased by 28% to EUR72.1m due to an increase in
the number of passengers flown, the impact of increased airport and handling
charges on some existing routes, offset by lower charges on our new European
routes and at our new bases.
Other expenses increased by 37% to EUR39.7m, which is less than the growth in
ancillary revenues (excluding charters) due to improved margins on some new and
existing products, and cost reductions achieved on other indirect costs.
Operating margins have declined by 2 points to 34% for the reasons outlined
above whilst operating profits increased by 21% to EUR203.3m during the period.
Interest receivable decreased by EUR3.5m to EUR12.5m reflecting the strong
growth in cash resources arising from the profitable trading performance offset
by lower deposit interest rates in the period. Interest payable increased by
EUR8.7m to EUR22.8m due to the increased level of debt arising from the
acquisition of new aircraft.
Taxation has increased by 6% during the period, less than the growth in pre-tax
profits and primarily reflects the continued decline in the headline rate of
corporation tax in Ireland.
The Company's balance sheet continues to benefit from the strong growth in
profits. Tangible fixed assets increased to EUR1,582.8m from EUR1,352.4m
principally as a result of the delivery of eight additional aircraft since March
31, 2003 and the payment of deposits for new deliveries. The Company generated
cash from operating activities of EUR253.1m, which funded advance payments on
future deliveries of EUR95.1m whilst the balance is reflected in the higher cash
and liquid resources figure of EUR1,161.1m. Advance delivery deposits amounted
to EUR354.5m at the period end. Total debt has increased by a further EUR154.6m,
net of repayments, since March 31, 2003 to EUR991.8m. Shareholder's funds at
September 30, 2003 have increased to EUR1,415.5m compared to EUR1,241.7m at
March 31, 2003.
Detailed Discussion and Analysis - Quarter Ended September 30, 2003
Profit after tax has increased by 18% to EUR131.7m driven by strong growth in
passenger volumes and continued tight cost control, offset by lower average
fares. Operating margins have declined by 2 points to 43% compared to the
previous period. Operating profit increased by 23% to EUR150.2m compared to the
quarter ended September 30, 2002 whilst profit before tax increased by 16%.
Total operating revenues increased by 30% to EUR351.2m whilst passenger volumes
increased by 44% to 6.2m.
Scheduled passenger revenues increased by 30% to EUR309.5m, reflecting the
increase in passenger volumes offset by lower average fares of 10%. The
strengthening of the euro to sterling accounted for half of this decline.
Ancillary revenues increased by 30% to EUR41.7m, which, excluding charters has
increased by 57%. This is higher than the growth in passenger volumes, and
reflects strong growth in all areas of ancillary revenues particularly car hire,
non-flight scheduled revenues, hotels and internet related activities.
Total operating expenses increased by 36% to EUR201.0m due to the increased
level of activity, and the increased costs, primarily staff, depreciation, fuel,
route charges and airport & handling costs associated with the growth of the
airline.
Staff costs have increased by 35% to EUR31.6m reflecting a 36% increase in
average employee numbers to 2,284 and the impact of a 3% pay increase granted
during the period offset by savings arising from the stronger euro to sterling
exchange rate.
Depreciation and amortisation increased by 22% to EUR23.7m due to an increase in
the average number of aircraft owned from 44 to 58, offset by savings arising
from the increase in the number of fully depreciated aircraft and the lower euro
denominated cost of new aircraft due to the strengthening of the euro to US$
exchange rate.
Fuel costs increased by 26% to EUR43.7m due to a 57% increase in the number of
hours flown, offset by a lower US$ cost per gallon of fuel, a stronger euro to
US$ exchange rate and an improvement in the fleet fuel burn rate due to a higher
proportion of 737-800 aircraft operated.
Maintenance costs increased by 43% to EUR11.0m reflecting an increase in the
size of the fleet operated, an increase in the number of flight hours, and
higher maintenance charges relating to the "Buzz" aircraft, offset by
maintenance savings arising from the increase in the number of 737-800 aircraft
operated.
Marketing and distribution costs decreased by 12% to EUR2.3m due to a lower
spend in the quarter on new routes as all new routes were launched in Quarter 1.
Aircraft rental costs of EUR2.2m arose during the period reflecting the lease
rental costs associated with the acquired "Buzz" aircraft.
Route Charges increased by 61% to EUR27.7m due to an increase in the number of
sectors flown, an increase in the average sector length and an increase in the
size of the aircraft operated which incur a higher charge offset by the impact
of a weaker sterling to euro exchange rate.
Airport and handling charges increased by 34% to EUR37.6m, which is less than
the growth in passenger volumes and reflects the lower charges on our new
European routes and at our new bases.
Other expenses increased by 42% to EUR21.2m, is less than the growth in
ancillary revenues after adjusting for the discontinued Charter programme,
reflecting improved margins on some new and existing products and continued cost
control on other indirect costs.
Operating profits have increased by 23% to EUR150.2m due to the reasons outlined
above.
Interest receivable decreased by EUR2.9m to EUR6.1m reflecting the strong growth
in cash resources arising from the profitable trading performance offset by
lower deposit interest rates during the quarter. Interest payable increased by
EUR4.1m to EUR11.7m due to the increased level of debt arising from the
acquisition of new aircraft.
Taxation increased 5% to EUR14.0m, which is less than the growth in profits
primarily due to the continued decline in the headline rate of corporation tax
in Ireland.
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,
2003 are consistent with those set out in the Annual Report for the year
ended March 31, 2003.
2. Approval of the Financial Statements
The Audit Committee approved the consolidated financial statements for
the Quarter and Half Year ended September 30, 2003 on October 30, 2003.
3. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the Quarter and
Half Year ended September 30, 2003 are based on the results reported
under Irish and UK GAAP.
4. Aircraft retirement costs
Five aircraft were retired earlier than expected due to the detection in
this Quarter of scratch marks ('scribing') that occurred during an
aircraft painting programme on these aircraft in 1995. It has been
determined that the cost of repairing these aircraft is uneconomic due
to the short remaining life of the aircraft. Accordingly the Company
has determined that the residual value of US$1m(EUR794k) for these
aircraft is excessive and as a result have reduced it to EUR250k per
aircraft. The cost of this adjustment charge has been reflected in the
results for Quarter 2.
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 2003
KPMG
Chartered Accountants 30 October 2003
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: 03 November, 2003
By:___/s/ Howard Millar____
H Millar
Company Secretary & Finance Director