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, 2005
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 BY 18% TO RECORD EUR237M.
TRAFFIC GROWTH OF 29%, NET MARGIN OF 25%
Ryanair, Europe's No. 1 low fares airline, today (Monday, 7th November 2005)
announced record half year profits of EUR237m. Traffic grew by 29% to 18.0m
passengers, yields increased by 3% and as a result total revenues rose by 33% to
EUR946.2m. Unit costs increased by 8% (excluding fuel they fell by 7%) as fuel
costs rose by 108% to EUR236.9m. As a result of these significantly higher fuel
costs, Ryanair's adjusted after tax margin for the half year fell by 3 points to
25% as adjusted net profit increased by 18% to EUR237m.
Summary Table of Results (IFRS) - in Euro
Half Year Ended Sept 30, Sept 30, %
2004 2005 Increase
Passengers 14.0m 18.0m 29%
Revenue EUR710.3m EUR946.2m 33%
Profit after Tax (note 1) EUR201.2m EUR237.0m 18%
Basic EPS (Euro Cents) 26.49 31.00 17%
(note1)
Note 1:Adjusted profit after tax and EPS during the half year ended 30 September
2005 excludes a receipt, net of tax, of EUR5.2m arising from the settlement of
an insurance claim for the scribing of 6 Boeing 737-200 aircraft.
Announcing these results Ryanair's Chief Executive, Michael O'Leary, said:
"These record traffic and profits reflect the continued successful roll-out of
Ryanair's lowest fare model despite difficult trading conditions characterised
by record high fuel prices and intense competition. It also demonstrates the
robustness of the Ryanair model, which delivers significant profits and
passenger growth even during turbulent periods while many competitors are losing
money.
"As anticipated, yields were 3% higher than last year despite a 29% increase in
seat capacity. These slightly higher yields reflect the multiple fuel surcharges
imposed by European flag carriers, which have continued to widen the gap between
their high fares and Ryanair's lowest fares. We have again reaffirmed our
commitment not to impose fuel surcharges on our passengers and reaped the
benefits of this strategy in terms of significant traffic growth and slightly
higher yields during the half year. Ancillary revenues grew by 40% significantly
faster than the growth in passenger volumes and this year we expect that they
will continue to outpace passenger growth.
"Unit costs increased by 8% primarily due to higher fuel costs. Excluding fuel
all other unit costs were reduced by 7% thanks to the addition of more lower
cost and efficient Boeing 737-800's, new lower cost airport and base agreements
and continuing tight control over all other cost lines. We continue to focus
aggressively on costs and anticipate that the cost reductions achieved will
continue to partially offset the significantly higher oil prices.
"Our fuel costs rose by 108% to EUR237m as we were unhedged for almost the
entire half year. For the remainder of this fiscal year, to March 2006, we are
90% hedged at rates equivalent to $49 per barrel. We are unhedged thereafter but
continue to closely monitor forward prices with a view to hedging our
requirements for summer of 2006. However, we expect that fuel prices will
continue at these higher levels for some time.
"Our new routes and bases have performed well over the summer with Luton and
Liverpool performing strongly whilst yields at Shannon continue to be lower than
expected. We recently commenced operations at Pisa, our 13th European base, in
October with 10 routes, and announced our 14th base at Nottingham - East
Midlands which will open in March 2006 with two based aircraft and a total of 15
routes. We achieved a significant milestone during August by carrying more
passengers on our shorthaul European network than British Airways did on their
entire worldwide network in one month.
"During the half year, we exercised 14 Boeing 737-800 options for delivery in
2007, at which date we plan to sell on 5 older Boeing 737-800's delivered in
1999. This is a continuation of our strategy of operating the youngest fleet in
Europe with the lowest unit operating costs and delivering the best on time
performance. At our recent investor day conference Management highlighted that
we plan to double passenger volumes and profits by 2012 and believe that we are
still now in the early stages of low fare development in Europe. The exercise of
these net 9 options is part of our strategy to continue to increase seat
capacity to satisfy the growing demand for Ryanair's low fares.
"We continue to fight the levy of unjust taxes on our passengers and we welcome
the recent announcement by the UK government that it would not impose a GBP1 tax
on air tickets. This GBP1 tax was proposed by the CAA to cover their own failure
to ensure that scheduled airlines had adequate financial resources to fly to and
from the UK. We also oppose the GBP4bn BAA farce at Stansted Airport where the
BAA airport monopoly propose to build facilities that the users at the airport
unanimously oppose, as they are extravagant and over specified. The objective of
this inflated proposal is to ensure that the BAA airport monopoly can claim a
higher return on this GBP4bn of capital expenditure rather than the GBP400m to
GBP600m, which more accurately reflects the cost of the facilities that the user
airlines actually want them to build.
"In Ireland the recent decision by the Commission for Aviation Regulation to
allow Dublin Airport to increase airport charges by 23% from January next to pay
for a proposed 2nd terminal, 5 years before it is built and without any
consultation with the airline users (despite previous government assurances) is
beyond belief. We now have the bizarre situation that an over specified future
airport development is being funded by increasing charges now even though not a
sod has been turned on the facility, and there is no plan for it to be turned
for quite some time.
"We continue to remain cautious in our outlook for the remainder of the fiscal
year. We anticipate that the fare differentials between Ryanair and the flag
carriers will be partially eroded as the fuel surchargers are forced to lower
their underlying fares to compete with Ryanair's lower prices. We expect to
achieve significant increases in passenger's volumes but also anticipate that
yields in Q3 will be broadly in line with last year and Q4 yields will fall by a
range of -5% to -10%, as previously guided. Our full year net profit guidance is
unchanged. This winter we expect that there will be continued intense
competition and there will be fewer low fare carriers in the market as higher
fuel prices force more carriers out of the industry. Ryanair's combination of
the lowest fare in every market, our lowest cost base and industry leading
customer service will enable us to grow across Europe to the benefit of our
passengers, our people and our shareholders".
ENDS. Monday, 7th November 2005
For further Howard Millar Pauline McAlester
information Ryanair Holdings Plc Murray Consultants
please contact: Tel: 353-1-8121212 Tel: 353-1-4980300
www.ryanair.com
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 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 15 bases and 266 low fare
routes across 21 countries. By the end of March 2006 Ryanair will operate an
entire fleet of 107 new Boeing 737-800 aircraft with firm orders for a further
127 new aircraft (net of planned disposals), which will be delivered over the
next 7 years. Ryanair currently employs a team of 3,000 people and expects to
carry approximately 35 million scheduled passengers in the current year.
Ryanair Holdings plc and Subsidiaries
Consolidated Income Statement in accordance with IFRS(unaudited)
Quarter Quarter Half year Half year
ended Ended ended ended
Sept30, Sept30, Sept30, Sept30,
2005 2004 2005 2004
EUR'000 EUR'000 EUR'000 EUR'000
Operating revenues
Scheduled
revenues 470,494 358,585 816,781 617,644
Ancillary
revenues 71,027 52,103 129,379 92,634
Total
operating
revenues
-continuing
operations 541,521 410,688 946,160 710,278
Operating
expenses
Staff 41,494 35,267 83,646 69,389
costs
Depreciation
and
amortisation 26,072 21,333 53,049 44,904
Other
operating
expenses
Fuel & Oil 126,967 61,908 236,873 113,750
Maintenance, 11,225 10,825 25,063 24,898
materials
and
repairs
Marketing 3,387 3,509 8,729 10,775
and
distribution
costs
Aircraft 10,679 8,152 20,737 16,236
rentals
Route 42,563 34,721 83,933 67,926
charges
Airport and 55,465 46,052 110,039 90,322
Handling
charges
Other 21,440 18,275 41,977 36,691
Total
operating
expenses 339,292 240,042 664,046 474,891
Operating
profit before
exceptional
items 202,229 170,646 282,114 235,387
Aircraft
Insurance
Claim - - 5,939 -
Operating
profit after
exceptional
items 202,229 170,646 288,053 235,387
Other
(expenses)/
income
Foreign
exchange
gains/(losses) (481) (879) 463 (759)
(Losses)/gain
on disposal of
fixed assets (16) - (16) 6
Interest
receivable and
similar income 9,211 6,759 17,821 12,818
Interest
payable and
similar
charges (18,364) (13,259) (36,799) (25,921)
Total other
(expenses)/income (9,650) (7,379) (18,531) (13,856)
Profit before
taxation 192,579 163,267 269,522 221,531
Tax on profit
on ordinary
activities (20,046) (15,192) (27,347) (20,380)
Profit for
the 172,533 148,075 242,175 201,151
period
Earnings per ordinary share
-Basic 22.51 19.50 31.68 26.49
(Euro cent)
-Diluted 22.35 19.38 31.47 26.32
(Euro cent)
Adjusted earnings per ordinary
share*
-Basicx 22.51 19.50 31.00 26.49
(Euro cent)
-Diluted 22.35 19.38 30.79 26.32
(Euro cent)
Number of ordinary shares(in 000's)
-Basic 766,453 759,351 764,509 759,315
-Diluted 771,875 764,183 769,603 764,343
* Calculated on profit for the period before exceptional items(net of tax).
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheets in accordance with IFRS(unaudited)
September 30, March 31,
2005 2005
EUR'000 EUR'000
Non-current assets
Intangible assets 46,841 46,841
Tangible assets 2,117,760 2,092,283
Deferred tax 20,391 1,328
Total Non-current assets 2,184,992 2,140,452
Current assets
Inventories 31,802 28,069
Other assets 26,924 24,612
Accounts receivable 25,930 20,644
Deferred Tax 1,182 -
Derivative financial instruments 109,356 -
Restricted cash 204,040 204,040
Financial assets: cash > 3months 406,752 529,407
Cash and cash equivalents 1,195,555 872,258
Total current assets 2,001,541 1,679,030
Total assets 4,186,533 3,819,482
Current liabilities
Accounts payable 62,651 92,118
Accrued expenses and other
liabilities 421,411 414,997
Current maturities of long term
debt 125,014 120,997
Derivative financial instruments 9,454 -
Current tax 28,518 21,190
Total current liabilities 647,048 649,302
Other liabilities
Provisions for liabilities and
charges 12,381 7,236
Derivative financial instruments 152,488 -
Deferred tax 134,075 105,509
Other creditors 75,548 29,072
Long term debt 1,246,584 1,293,860
Total other liabilities 1,621,076 1,435,677
Shareholders' funds - equity
Called - up share capital 9,735 9,675
Share premium account 576,639 565,756
Profit and loss account 1,400,759 1,158,584
Other reserves (68,724) 488
Shareholders' funds - equity 1,918,409 1,734,503
Total liabilities and shareholders'
funds 4,186,533 3,819,482
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statement in accordance with IFRS(Unaudited)
Sept 30, Sept 30,
2005 2004
EUR'000 EUR'000
Operating activities
Profit before taxation 269,522 221,531
Adjustments to reconcile profits
before tax
To net cash provided by operating
activities
Depreciation 53,049 44,904
(Increase) in inventories (3,733) (30)
(Increase) in accounts receivable (5,286) (1,874)
Decrease/(increase) in other current 1,342 (1,372)
assets
(Decrease)/increase in accounts (29,467) 7,426
payable
Increase in accrued expenses 6,175 9,479
Increase/(decrease) in other 19,294 (2,496)
creditors
Increase in maintenance provision 5,145 3,362
Interest receivable (3,654) (635)
Interest payable (51) 1,097
Salary costs 289 47
Share based payment 586 -
Income tax (1,727) (38)
Net cash provided by operating 311,484 281,401
activities
Investing activities
Capital expenditure (78,526) (208,496)
Financial assets: cash > 3months 122,655 (355,479)
44,129 (563,975)
Financing activities
Net proceeds from shares issued 10,943 201
(Repayment)/increase in long debt (43,259) 90,935
Net cash used in financing activities (32,316) 91,136
Increase in cash and cash equivalents 323,297 (191,438)
Cash and cash equivalents at
beginning of 872,258 744,260
period
Cash and cash equivalents at end of 1,195,555 552,822
period
Ryanair Holdings plc and Subsidiaries
Consolidated Statement of Changes in Shareholders' Funds - Equity
in accordance with IFRS (unaudited)
Share Profit
Ordinary premium and loss Other
shares account account reserves Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at April 1,
2005 9,675 565,756 1,158,584 488 1,734,503
Issue of ordinary
equity shares 60 10,883 - - 10,943
Movement in reserves - - - (69,212) (69,212)
Profit for the period - - 242,175 - 242,175
Balance at September
30, 2005 9,735 576,639 1,400,759 (68,724) 1,918,409
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,
2005 2004 2005 2004
EUR'000 EUR'000 EUR'000 EUR'000
Profit for the period
under IFRS 172,533 148,075 242,175 201,151
Adjustments
Aircraft
Insurance - - (5,939) -
Claim
Taxation adjustment
for above - - 742 -
Adjusted profit under
IFRS 172,533 148,075 236,978 201,151
Number of ordinary shares(in 000's)
-Basic 766,453 759,351 764,509 759,315
-Diluted 771,875 764,183 769,603 764,343
Adusted earnings per ordinary
share
-Basic(EUR 22.51 19.50 31.00 26.49
cent)
-Diluted(EUR 22.35 19.38 30.79 26.32
cent)
Ryanair Holdings plc and Subsidiaries
Consolidated Income Statement in accordance with US GAAP (unaudited)
Quarter Quarter Half year Half year
ended ended ended ended
Sept30, Sept30, Sept30, Sept30,
2005 2004 2005 2004
EUR'000 EUR'000 EUR'000 EUR'000
Operating revenues
Scheduled
revenues 470,494 358,585 816,781 617,644
Ancillary
revenues 71,027 52,103 129,379 92,634
Total operating
revenues
-continuing
operations 541,521 410,688 946,160 710,278
Operating expenses
Staff costs 41,301 35,227 83,077 69,309
Depreciation
and
amortisation 26,385 22,111 53,654 45,682
Other operating
expenses
Fuel & Oil 126,967 61,908 236,873 113,750
Maintenance, 11,225 10,825 25,063 24,898
materials
and
repairs
Marketing 3,387 3,509 8,729 10,775
and
distribution
costs
Aircraft 10,679 8,152 20,737 16,236
rentals
Route 42,563 34,721 83,933 67,926
charges
Airport and 55,465 46,052 110,039 90,322
Handling
charges
Other 21,418 18,253 41,933 36,647
Total
operating
expenses 339,390 240,758 664,038 475,545
Operating
profit before
exceptional
items 202,131 169,930 282,122 234,733
Aircraft
Insurance
Claim - - 5,939 -
Operating
profit after
exceptional
items 202,131 169,930 288,061 234,733
Other (expenses)/
income
Foreign
exchange
gains/(losses) (481) (879) 463 (759)
(Loss)/gain on
disposal of
fixed assets (16) - (16) 6
Interest
receivable and
similar income 9,211 6,759 17,821 12,818
Interest
payable and
similar
charges (16,450) (11,323) (33,352) (22,085)
Total other
(expenses)/income (7,736) (5,443) (15,084) (10,020)
Income before
taxation 194,395 164,487 272,977 224,713
Taxation (20,309) (15,439) (27,849) (20,869)
Net income 174,086 149,048 245,128 203,844
Net income per ADS
-Basic 113.57 98.14 160.32 134.23
(Euro cent)
-Diluted 112.77 97.52 159.26 133.35
(Euro cent)
Adjusted net income per ADS *
-Basic 113.57 98.14 156.92 134.23
(Euro cent)
-Diluted 112.77 97.52 155.88 133.35
(Euro cent)
Weighted Average number of shares
-Basic 766,453 759,351 764,509 759,315
-Diluted 771,875 764,183 769,603 764,343
* Calculated on Net Income before non-recurring items(net of tax).
(5 ordinary shares equal 1 ADR)
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between IFRS and US
generally accepted accounting principles (unaudited)
(A) Net income in accordance with US GAAP
Quarter ended Half year ended
Sept 30, Sept 30, Sept 30, Sept 30,
2005 2004 2005 2004
EUR000 EUR000 EUR'000 EUR'000
Net income in
accordance
with IFRS 172,533 148,075 242,175 201,151
Adjustments
Pension (100) 40 (17) 80
Share based
payments 293 - 586 -
Capitalised interest (net of
amortisation) regarding aircraft
acquisition
programme 1,601 1,158 2,842 3,058
Darley
Investments
Limited 22 22 44 44
Taxation-
effect of
above
adjustments (263) (247) (502) (489)
Net income in
accordance
with US GAAP 174,086 149,048 245,128 203,844
(B) Consolidated cashflow statement in accordance with US GAAP
Sept 30, Sept 30,
2005 2004
EUR'000 EUR'000
Cash inflow
from operating
activities 311,484 281,401
Cash
inflow/(outflow)
from
investing
activities 44,129 (563,975)
Cash
(outflow)/inflow
from
financing
activities (32,316) 91,136
Increase in
cash and cash
equivalents 323,297 (191,438)
Cash and cash
equivalents at
beginning of
year 872,258 744,260
Cash and cash
equivalents at
end of period 1,195,555 552,822
Cash and cash
equivalents
under US GAAP 1,195,555 552,822
Restricted
cash 204,040 200,000
Deposits with
a maturity of
between three
and six months 406,752 668,224
Cash and
liquid
resources in
accordance
with IFRS 1,806,347 1,421,046
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between IFRS and US
generally accepted accounting principles (unaudited)
(C) Shareholders' funds - equity
Sept 30, Sept 30,
2005 2004
EUR'000 EUR'000
Shareholders' equity as reported in the
consolidated balance
sheets in accordance with IFRS 1,918,409 1,652,309
Adjustments:
Pension 11,720 9,953
Capitalised interest( net of
amortisation) regarding aircraft
acquisition programme 25,789 20,559
Darley Investments Limited (19) (107)
Minimum pension liability(net of
tax) (6,496) (2,631)
Unrealised losses on derivative
financial instruments(net of tax) - (113,302)
Tax effect of adjustments( excluding
pension & derivative adjustments) (5,498) (3,077)
Shareholders' equity as adjusted to
accord with US GAAP 1,943,905 1,563,704
Opening shareholders' equity under
US GAAP 1,629,559 1,356,281
Comprehensive income
Unrealised gains on derivative
financial instruments(net of tax) 58,275 3,379
Net income in accordance with US
GAAP 245,128 203,844
Total comprehensive income 303,403 207,223
Stock issued for cash 10,943 200
Closing shareholders' equity in
accordance with US GAAP 1,943,905 1,563,704
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 income statement excluding exceptional items referred to below.
Exceptional items for the half year ended September 30, 2005 consist of a
receipt of EUR5.2m (net of tax) arising from the settlement of an insurance
claim for the scribing of 6 Boeing 737-200 aircraft.
Profit after tax increased by 20% to EUR242.2m during the six months compared to
last year. The adjusted profit for the half year, excluding exceptional items,
increased by 18% to EUR237.0m.
The results for the period and comparative year have been prepared in accordance
with International Financial Reporting Standard ("IFRS") accounting policies
expected to be adopted in the annual financial statements for the year ended 31
March 2006, and a detailed explanation of the financial impact of the adoption
of these policies was set out in a separate document issued with the quarterly
financial results for the period to 30 June 2005.
Summary Half year ended Sept 30, 2005
Profit after tax increased by 18% to EUR237.0m, compared to EUR201.2m in the
previous half year ended September 30, 2004. These results were achieved by
strong growth in passenger volumes and continued tight cost control, excluding
fuel, which was significantly higher than in previous periods. Total operating
revenues increased by 33% to EUR946.2m, which is greater than the 29% growth in
passenger volumes, as average fares rose by 3% and ancillary revenues grew by
40% to EUR129.4m. Total revenue per passenger as a result increased by 3% whilst
Passenger Load Factor decreased by 1 point to 86% during the period.
Total operating expenses increased by 40% to EUR664.0m, 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. Fuel, which
represents 36% of total operating costs compared to 24% last year, increased by
108% to EUR236.9m due to substantial increases in the US$ cost per gallon,
partially offset by the strengthening of the Euro to US$ exchange rate. Unit
costs excluding fuel declined by 7% as all other cost items increased at a
slower rate than the growth in passenger volumes. Due to the significantly
higher fuel costs operating margins declined by 3 points to 30%, whilst
operating profit increased by 20% to EUR282.1m.
Profit before tax has increased by 19%, less than the growth in operating profit
due to the higher net interest charges arising from the increased level of debt,
partially offset by foreign exchange gains which arose from the translation of
foreign currency bank balances to Euro at the half year end exchange rates. Net
Margins declined by 3 points to 25% for the reasons outlined above.
Adjusted basic earnings per share has risen by 17% to 31.00 cent for the period.
Balance Sheet
The strong growth in profitability continues to positively impact the balance
sheet with Total Cash increasing by EUR200.6m to EUR1,806.3m despite funding an
additional EUR78.5m in capital expenditure from internal resources. The company
took delivery of one 737-800 aircraft and funded additional aircraft deposits
during the period. Total debt declined during the period as repayments exceeded
debt drawdowns by EUR43.3m. Shareholders' Funds at Sept 30, 2005 have increased
by EUR183.9m to EUR1,918.4m, compared to March 31, 2005 reflecting the EUR242.2m
increase in profitability during the period offset by a reduction of EUR69.2m
resulting from changes in the accounting treatment for derivative financial
instruments, pensions and stock options following the adoption of IFRS.
Detailed Discussion and Analysis Half year ended Sept 30, 2005
Profit after tax, increased by 18% to EUR237.0m due to a 3% increase in average
fares, strong growth in ancillary revenues, and tight cost control which was
offset by fuel costs increasing by 108% to EUR236.9m during the period.
Operating margins, declined by 3% due to higher fuel costs whilst operating
profit increased by 20% to EUR282.1m compared to half year ended Sept 30, 2004.
Total operating revenues increased by 33% to EUR946.2m due to the combination of
a 29% increase in passengers carried, an improvement in average fares and strong
growth in ancillary revenues.
Scheduled passenger revenues increased by 32% to EUR816.8m due to a 3%
improvement in average fares, increased passenger volumes on existing routes,
the successful launch of new routes and new bases at Shannon, Liverpool and
Luton. The strengthening of the euro against sterling during the period
negatively impacted fares by 1%. As expected Load factor also declined by 1
point to 86% during the period.
Ancillary revenues continue to perform strongly with revenues growing by 40% to
EUR129.4m in the period. This performance reflects the strong growth in on board
sales, non-flight scheduled revenues, 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 13% last year.
Total operating expenses increased by 40% to EUR664.0m 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 a 10% increase in
the average sector length, whilst higher US$ fuel prices were partly offset by
the strength of the Euro exchange rate against the US dollar.
Staff costs have increased by 21% to EUR83.6m. This increase primarily reflects
a 14% increase in average employee numbers to 2,987 and the impact of pay
increases of 3% granted during the period. Pilots, who earn higher than the
average salary, accounted for 44% of the increase in employment during the
period.
Depreciation and amortisation increased by 18% to EUR53.0m. There are an
additional eight 'owned' 737-800 aircraft in the fleet this year compared to
last year. 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 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 108% to EUR236.9m due to a 32% increase in the number of
hours flown, a significant increase in the average US$ cost per gallon of fuel
partially offset by the positive impact of the strengthening of the Euro to the
US dollar during the period.
Maintenance costs increased by EUR0.2m to EUR25.1m 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 and the return of 6 leased 737-300's to ILFC.
Marketing and distribution costs decreased by EUR2.0m to EUR8.7m due to the
reduction in the level of marketing activity and related expenditure compared to
the previous year.
Aircraft rental costs increased by 28% to EUR20.7m reflecting an additional 7
aircraft on lease during the period partially offset by the savings arising from
the return of 6 737-300 aircraft to ILFC.
Route charges increased by 24% to EUR83.9m due to an increase in the number
sectors flown, an increase in the average sector length, offset by a reduction
in enroute charges in certain EU countries and the benefit of a stronger euro to
sterling exchange rate.
Airport and handling charges increased by 22% to EUR110.0m, which is lower than
the growth in passenger volumes and reflects the impact of increased costs at
certain existing airports offset by lower costs at new airports and bases, and
the positive impact of the strength of the euro exchange rate against sterling
during the period.
Other expenses increased by 14% to EUR42.0m, which is less than the growth in
ancillary revenues due to improved margins on some new and existing products,
and cost reductions achieved on certain indirect costs.
Operating margins have declined by 3 points to 30% for the period due to the
reasons outlined above which has resulted in operating profits increasing by 20%
to EUR282.1m.
Interest receivable has increased by EUR5.0m to EUR17.8m due to the combined
impact of a higher cash balance and increases in average deposit rates during
the period.
Interest payable increased by EUR10.9m 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 EUR311.5m. which part funded capital expenditure during the period with the
balance reflected in Total Cash of EUR1,806.3m. Capital expenditure of EUR78.5m
primarily comprised of the delivery of an aircraft and further advance payments
for future aircraft deliveries. Long term Debt, net of repayments decreased by
EUR43.3m during the period.
Shareholders' Funds at September 30, 2005 have increased by EUR183.9m to
EUR1,918.4m, compared to March 31, 2005 reflecting the EUR242.2m increase in
profitability during the period offset by a reduction of EUR69.2m resulting from
changes in the accounting treatment for derivative financial instruments,
pensions and stock options following the adoption of IFRS.
Detailed Discussion and Analysis Quarter Ended September 30, 2005
Profit after tax, increased by 16% to EUR172.5m due to a 3% increase in average
fares and strong ancillary revenue growth, which was offset by fuel costs which
increased by 105% to EUR127.0m reflecting the higher US$ cost per gallon.
Operating margins, as a result, fell by 5 points to 37%, which in turn resulted
in operating profit increasing by 18% to EUR202.2m compared to the previous
quarter.
Total operating revenues increased by 32% to EUR541.5m whilst passenger volumes
increased by 28% to 9.5m. Total revenue per passenger increased by 3% in the
quarter due to a combination of higher average fares, strong ancillary revenue
growth but was partially offset by the weakening of Sterling exchange rate
against the Euro.
Scheduled passenger revenues increased by 31% to EUR470.5m due to a combination
of increased passenger volumes on existing routes, the successful launch of new
bases at Luton, Liverpool and Shannon and a 3% increase in average fares,
partially offset by the weakening of Sterling exchange rate against the Euro.
Ancillary revenues increased 36% to EUR71.0m, a faster growth rate than
passenger volumes, reflecting a strong performance in non-flight scheduled
revenues, on-board sales and other ancillary products. Ancillary revenues
continue to grow at a faster rate than passenger volumes and remain at 13% of
total revenues compared to the same period last year.
Total operating expenses increased by 41% to EUR339.3m 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 an increase in
the average sector length, whilst higher US$ fuel prices were partially offset
by the strength of the Euro exchange rate against the US$.
Staff costs have increased by 18% to EUR41.5m primarily due to a 14% increase in
average employee numbers to 2,876 and the impact of pay increases of 3% compared
to the previous quarter ended September 30, 2004.
Depreciation and amortisation increased by 22% to EUR26.1m. A higher
depreciation charge due to an increase in the size of the 'owned' fleet from 66
to 74, offset by a lower amortisation charge due to the retirement of 737-200
aircraft and the positive impact of a new engine maintenance deal on the cost of
amortisation of 737-800 aircraft. The strengthening of the Euro to US$ also had
a positive impact on the depreciation and amortisation charge relating to new
aircraft deliveries.
Fuel costs rose by 105% to EUR127.0m due to an increase in the number of sectors
flown, an 8% increase in sector length, and a significantly higher average US$
cost per gallon of fuel partially offset by the positive impact of the
strengthening of the Euro to the US$ during the period.
Maintenance costs increased by 4% to EUR11.2m 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 six 737-300's and the
positive impact of the strengthening of the Euro exchange rate, partially offset
by an increase in the number of leased 737-800 aircraft from 10 to 17.
Marketing and distribution costs decreased by 3% to EUR3.4m due to the reduction
in the level of marketing activity and related expenditure compared to the
previous year.
Aircraft rental costs increased by 31% to EUR10.7m reflecting an additional 7
aircraft on lease during the quarter offset by the savings arising from the
return of 6 737-300's to ILFC.
Route charges increased by 23% to EUR42.6m due to an increase in the number of
sectors flown and an increase of 8% in the average sector length, offset by a
reduction in enroute charges in certain EU countries.
Airport and handling charges increased by 20% to EUR55.5m, which was slower than
the growth in passenger volumes and reflects the impact of increased costs at
certain existing airports offset by lower costs and new airports and bases, and
the strengthening of the Euro exchange rate against Sterling.
Other expenses increased by 17% to EUR21.5m, which is lower than the growth in
ancillary revenues due to improved margins on some existing products, and cost
reductions achieved on indirect costs.
Operating margins have declined by 5 points to 37% due to the reasons outlined
above whilst operating profits have increased by 18% to EUR202.2m during the
quarter.
Interest receivable has increased by EUR2.4m to EUR9.2m for the quarter due to
the combined impact of higher levels of cash and cash equivalents and increases
in average deposit rates earned in the quarter compared to last year.
Interest payable increased by EUR5.1m to EUR18.4m due to the drawdown of debt to
part fund the purchase of new aircraft.
Foreign exchange losses have decreased during the quarter to EUR0.5m due to the
positive impact of changes in the Sterling exchange rate against the Euro
compared to last year.
Notes to the Financial Statements
1. Accounting Policies
This period's financial information has been prepared on the basis of the
recognition and measurement requirements of International Financial
Reporting Standards ("IFRS") in issue that either are adopted by the EU and
effective (or available for early adoption) at 31 March 2006 or are expected
to be adopted and effective (or available for early adoption) at 31 March
2006, the Group's first annual reporting date at which it is required to use
accounting standards adopted by the EU. Based on these recognition and
measurement requirements, management has made assumptions about the
accounting policies expected to be applied, when the first annual financial
statements are prepared in accordance with accounting standards adopted by
the EU for the financial year ending 31 March 2006. These preliminary
accounting policies are set out in the document titled "Explanation of the
financial impact following adoption of IFRS" published in August 2005 with
the first quarter financial results.
2. Approval of the Preliminary Announcement
The Audit Committee approved the consolidated financial statements for the
half year ended Sept 30, 2005 on November 4th, 2005.
3. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the half year ended
Sept 30, 2005 and the comparative period are based on the results reported
under the group's preliminary IFRS accounting policies, as adjusted for
certain exceptional items.
4. Ancillary Products and Services
In order to more accurately reflect the structure of certain ancillary
contracts and to provide more meaningful information to users the Group
has taken the opportunity to reclassify certain ancillary revenues and
costs (primarily car hire and travel insurance). This has resulted in a
reduction in revenues of EUR19.9 million with a corresponding reduction
in costs in the period ended 30 September 2005 (30 September 2004:
EUR10.8 million). This has resulted in an increase in net margin of 0.5%
to 25.1% in the period ended 30 September 2005 (30 September 2004 0.4%
to 28.3%). Going forward the Group intends to report ancillary revenues
and costs on a basis consistent with the treatment described herein."
Independent review report to Ryanair Holdings plc for the six months ended 30
September 2005
Introduction
We have been instructed by the company to review the consolidated balance sheet
of Ryanair Holdings plc at 30 September 2005 and the related consolidated
statements of income, changes in shareholders' funds - equity and cash flows for
the six month period then ended and the related notes as set out on pages 1 to
7. 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 there are any
changes, and the reasons for them, are disclosed. As explained in note 3 to the
document published by Ryanair on 2nd August 2005, entitled "Explanation of the
Financial Impact Following the Adoption of International Financial Reporting
Standards", EU law requires that the next annual consolidated financial
statements of the company are prepared in accordance with accounting standards
adopted for use in the European Union further to IAS Regulation (EC 1606/2002).
Therefore this interim financial information has been prepared on the basis of
the recognition and measurement requirements of IFRS's in issue that either are
adopted by the EU and effective (or available for early adoption) at 31 March
2006 or are expected to be adopted and effective (or available for early
adoption) at 31 March 2006.
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
for use in Ireland and the United Kingdom. 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 excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It 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.
Emphasis of matter
Without qualifying our review conclusion, we draw attention to note 3 to the
document published by Ryanair on 2nd August 2005, entitled "Explanation of the
Financial Impact Following the Adoption of International Financial Reporting
Standards", that explains why there is a possibility that the company's
management may determine that changes to the accounting policies adopted in
preparing the consolidated interim financial information are necessary when
management prepares its first annual financial statements in accordance with
accounting standards adopted by the EU as of 31 March 2006.
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 2005, which is stated to have been prepared in accordance
with the basis of preparation note set out in note 3 to the "Explanation of the
Financial Impact Following the Adoption of International Financial Reporting
Standards". This describes how the recognition and measurement requirements of
accounting standards expected to be adopted by the EU for use at the next annual
reporting date have been applied, including the assumptions management has made
about the standards and interpretations expected to be effective, and the
policies expected to be adopted, when management prepares its first annual
financial statements in accordance with accounting standards adopted by the EU
as of 31 March 2006.
KPMG4 November 2005
Chartered Accountants
Dublin, 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.
RYANAIR HOLDINGS PLC
Date: 7 November, 2005
By:___/s/ Howard Millar____
H Millar
Company Secretary & Finance Director