Ryanair Holdings Plc (RYAAY,RYA.L), Europe's largest budget airline, reported Monday a higher profit for the year ended March 31, but warned that earnings would decline in the ongoing fiscal year amid a challenging Europe and increasing oil prices. The company expects that any increase in ticket prices will only partially offset higher fuel costs. The stock is down over 5 percent.
"We remain concerned about next winter as we have zero yield visibility but expect recession, austerity, currency concerns and lower fares at new and growing bases in Hungary, Poland, Provincial UK, and Spain will make it difficult to repeat this year's record results," the airline said.
Ryanair sees year-over-year decline in net profit for fiscal 2013 in a range of 400 million to 440 million euros, subject to final yield outturn. The airline reported adjusted profit attributable to shareholders of 502.6 million euros ($643 million) in the just concluded year.
Pre-tax profit for the year increased to 633.0 million euros from 420.9 million euros in the prior year. The results included an exceptional item of 57.8 million euros relating to a one-off release of ticket sales revenue.
Excluding exceptional items, pre-tax profit advanced to 567.7 million euros from 450.6 million euros.
Operating revenues grew to 4.39 billion euros from 3.63 billion euros a year ago. Excluding items, revenue increased 19 percent to 4.33 billion euros as traffic grew 5 percent and average fares improved 16 percent.
Fuel and oil costs climbed 30 percent to 1.59 billion euros. Ryanair expects more European failures in 2012, as higher oil prices and recession continue to expose failed airline models as well as subscale or peripheral carriers.
The airline expects that traffic in fiscal 2013 will grow by 5 percent to just over 79 million passengers. Traffic in the first half of the year is expected to grow 7 percent while the second-half growth will be 3 percent, the company said.
Ryanair expects profit to drop in the first half of the ongoing year as fuel bill is expected to rise by 320 million euros in fiscal 2013 with most of the increase skewed into the first half.
Further, the company announced a special dividend of 0.34 euros per share payable in November. This follows a special dividend of the same amount announced in June 2010.
RYA.L is losing 0.23 pence or 5.75 percent and is currently trading at 3.82 pence.
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