Ryanair Q3 Profit Climbs, Lifts Traffic Forecast; To Buy Back EUR 800 Mln Shares

(RTTNews) - Irish no-frills airline Ryanair (RYA.L, RYAAY) reported Monday that it's third-quarter profit more-than-doubled from last year with strong traffic growth and lower unit costs, despite lower fares. Looking ahead, the company said it remains comfortable with full year guidance, and lifted its traffic forecast for the fourth quarter and fiscal 2016. Further, the Board has approved an 800 million euros share buy-back to commence on February 5.

Ryanair's CEO, Michael O'Leary, said, "We are pleased to report that our low fares policy delivered strong Q3 traffic and profit growth... Following a strong first half of Q3, we noted weaker pricing and bookings immediately after the terrorist events in Paris and Brussels. We reacted to this softness by running price promotions and discounted fares to stimulate double digit traffic growth."

For the third quarter, pre-tax profit grew 105 percent to 111.1 million euros from 54.3 million euros a year ago. Profit for the quarter, all attributable to equity holders, climbed 110 percent to 103 million euros. Earnings per share grew 118 percent to 7.68 euro cents.

Revenue for the quarter climbed 17 percent to 1.33 billion euros from 1.132 billion euros last year.

Scheduled revenues increased 18 percent year-over-year to 987.1 million euros driven by higher traffic, partly offset by lower average fares.

Ancillary revenues grew 16 percent to 342.4 million euros driven by a solid performance in on-board sales and reserved seating offset by reduced travel insurance and lower car-hire.

Traffic grew 20 percent to 24.9 million customers from 20.8 million customers a year ago. Load factors rose 5 percent points to 93 percent.

While average fares fell 1 percent to 40 euros, this was offset by 5 percent drop in unit costs, while unit costs excluding fuel was down 1 percent.

In the quarter, fuel and oil rose 7 percent to 485.1 million euros due to an 11 percent increase in hours offset by lower euro fuel prices per gallon.

Looking ahead, for the fourth quarter, the company expects that traffic will grow by 26 percent, compared to previous estimate of 22 percent.

With limited visibility of close-in Easter bookings in March, the company now expects fourth quarter fares to fall by 6 percent, compared to previous view for drop of 4 percent.

With stronger load factors, the company raised fiscal 2016 traffic target to 106 million customers from previously expected 105 million customers. This represents a 17 percent increase on last year's 90.6 million customers.

Further, the company said it remains comfortable with full year guidance that net profits will be towards the upper end of the 1.175 billion euros to 1.225 billion euros range, pre-exceptions.

The company cautions, however, that this guidance is heavily dependent on the absence of further unforeseen events impacting close-in bookings and yields in Q4, especially over Easter, where it is working to deliver 26 percent traffic growth.

In London, Ryanair shares were trading at 14.01 euros, up 1.89 percent.