Ryanair Lifts FY15 Profit View, Sees Modest Growth In FY16; Stock Down

(RTTNews) - Ryanair Holdings Plc (RYA.L, RYAAY) reported Monday a profit in its third quarter, compared to last year's loss, boosted by strong growth in revenues and traffic. The Europe's low fares airline further announced a special dividend and a 400 million euros share buyback program.

Going ahead, the company lifted its fiscal 2015 profit view, while maintaining traffic forecast. Further, for fiscal 2016, the company expects a modest profit growth. The shares were losing around 4 percent in the morning trading in London.

For the third quarter, the company generated net profit of 49 million euros, compared to a loss of 35 million euros in the prior year. Basic earnings per share was 3.53 euro cents, compared to a loss of 2.50 euro cents.

Unit costs fell 6 percent from last year, while costs were flat excluding fuel.

Revenues grew 17 percent to 1.13 billion euros from prior year's 964 million euros.

Traffic grew 14 percent to 20.8 million customers from prior year's 18.3 million, as average fare rose 2 percent to 40 euros. Load Factors rose 6 percent points to 88 percent from 82 percent last year.

Ryanair's CEO, Michael O'Leary, said, "These strong results confirm that our "Always Getting Better" customer programme and our expanded business schedules, coupled with our substantial fare and cost advantage over competitor airlines is drawing millions of new customers to Ryanair."

The company added that its new winter routes and bases are performing well.

Further, Ryanair said a 520 million euros special dividend, representing 0.375 euros per share, will be paid on 27 February. In addition, the Board of Ryanair has approved a 400 million euros share buy-back programme to commence on February 12. This systemic programme will be executed over a 6 month period from February to August 2015, subject to market conditions.

Looking ahead for fiscal 2015, the company said it is raising net profit guidance to a range of 840 million euros to 850 million euros from previously estimated range of 810 million euros to 830 million euros.

The upward revision reflects unit costs that will fall by 5 percent due to lower oil prices as well as stronger load factors.

Ryanair continues to expect that full-year traffic will rise to just over 90 million, as load factors rise to 87 percent. Fourth-quarter traffic is expected to grow approximately 25 percent but average fares will fall by 6 percent to 8 percent as the firm uses lower fares to expand its network and develop business schedules.

For fiscal 2016, the company said it is still finalising budget, yet it believes that any growth in profits will be modest as fuel is hedged at $92 pbl. Some competitors will be significant beneficiaries of lower oil prices and this may lead to downward pressure on airfares in 2015/16, the company noted.

In London, Ryanair shares were losing 4.13 percent, and trading at 9.97 pence.