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 February, 2006
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 DELIVERS INCREASED 3RD QUARTER PROFITS
NET PROFIT OF EUR37M - TRAFFIC GROWTH OF 26%
--------------------------------------------------------------------------------
Ryanair, Europe's No. 1 low fares airline, today (Monday, 6th February 2006)
announced increased third quarter profits of EUR37m. Traffic grew by 26% to 8.6m
passengers, whilst yields were almost flat, as expected, as total revenues rose
by 27% to EUR370.7m. Unit costs increased by 3% (excluding fuel they fell by 6%)
as fuel costs rose by 59% to EUR114.9m. As a result of these significantly
higher fuel costs, Ryanair's after tax margin, on an adjusted basis for the
third quarter fell by 2 points to 10% as adjusted net profit increased by 6% to
EUR37m.
Summary Table of Results (IFRS) - in Euro
-----------------------------------------
Quarter Ended Dec 31, 2004 Dec 31, 2005 % Increase
Passengers 6.9m 8.6m 26%
Revenue EUR291.8m EUR370.7m 27%
Adjusted Profit after Tax (note 1) EUR34.8m EUR36.8m 6%
Basic EPS (Euro Cents) (note1) 4.58 4.79 5%
Note 1: Adjusted profit after tax for the quarter ended December 31, 2004
excludes an amount of EUR11.9m (net of tax) resulting from changes in the
accounting treatment for Goodwill arising on the Buzz acquisition following the
adoption of IFRS (International Financial Reporting Standards).
Announcing these results Ryanair's Chief Executive, Michael O'Leary, said:
"Ryanair's lowest fare model, yet again, delivered increased profits and
passenger growth for the quarter despite the intense competition and the drag on
profitability of very high fuel prices. Underlying profit growth was strong at
22% as the comparative included the once off release of maintenance provisions
related to the return of leased aircraft in November 2004. The Ryanair model has
proven that during difficult trading conditions that it can increase
profitability and generate significant passenger growth while many of our
competitors are reporting falling profits or losing money.
"As anticipated, yields were flat during the quarter despite a 27% increase in
seat capacity and continued intense price competition across the route network.
The multiple fuel surcharges imposed by European flag carriers remain, and have
maintained the wide gap between their high prices and Ryanair's low fares. Our
"no fuel surcharges" guarantee to our passengers has enabled us to launch more
new routes, deliver significant traffic growth and higher profits. Load factors,
as expected, were 1 point lower driven by the 27% increase in seat capacity as
we launched 34 new routes( total routes 303) and announced a significant
expansion at our Dublin base, ( total bases 15). Ancillary revenues grew by 31%
significantly faster than the growth in passenger volumes and we expect that
they will continue to outpace traffic growth this year.
"Unit costs increased by 3% primarily due to higher fuel costs. Excluding fuel,
unit costs were reduced by 6% thanks to the addition of lower cost and efficient
Boeing 737-800's (we retired the last older Boeing 737-200 in December 2005),
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 will continue to partially offset the significantly higher
oil prices.
"Our fuel costs rose by 59% to EUR115m despite being almost fully hedged during
the quarter reflecting the high fuel prices. We are hedged to the end of March
06 at rates equivalent to $49 per barrel. We are unhedged thereafter but
continue to monitor forward prices with a view to hedging our future
requirements for fiscal 2007 should an appropriate opportunity arise. Our view
remains unchanged insofar as we expect that fuel prices will continue at these
higher levels for some time.
"Our new routes and bases (Luton, Liverpool and Pisa) have performed well in
their first winter whilst our yield performance at Shannon continues to be lower
than originally expected. Our 14th base at Nottingham - East Midlands which was
due to launch in March has been postponed to April due to the late aircraft
deliveries arising from the Boeing strike. We also announced a major expansion
of our Dublin base which commences in April with 5 additional aircraft and 18
new routes and these are already booking strongly. Ryanair continues to benefit
from the cost savings and the economies of scale arising from our route
development strategy of "connecting the dots". We also continued to extend our
lead over British Airways by carrying more passengers each month than they did
on their entire worldwide network.
"We continue to oppose the GBP4bn "marble palace" being proposed by BAA at
Stansted. All the main airlines support a second runway, but believe that this
should be delivered at a cost of GBP1bn or less. The recent dialogue with the
BAA has conclusively demonstrated that their 76m passenger forecast for Stansted
(current capacity 25m) has no basis in reality. The BAA GBP4bn budget is a
monumental waste of passengers money and the BAA are also looking for a
cross-subsidy from passengers at Heathrow and Gatwick to pay for this Taj-Mahal.
If the CAA were an effective regulator, these plans would be shelved as they
fail to meet the reasonable requirements of airport users, but sadly the CAA is
a weak regulator whose bark is even more ineffectual than its toothless bite.
"Our relentless focus on cost reduction continues. The launch of our Web
Check-In, hand luggage only facility on March 16 will continue the low fare
revolution pioneered by Ryanair in the early 1990's. Web check-in will encourage
passengers to travel with fewer bags and will enable Ryanair to reduce airport
handling charges as we will need fewer check-in agents, desks, and baggage
handlers. We plan to pass on these savings upfront to our passengers by reducing
our average fare by GBP2.50 or EUR3.50 from 16th of March onwards. Web check-in
passengers will further benefit by avoiding airport check-in and boarding gate
queues. Passengers who wish to check-in bags will also benefit from these fare
reductions and shorter queues at check-in but will pay GBP2.50 or EUR3.50 per
checked in bag. We anticipate that the introduction of web check-in and at the
same time increasing passengers baggage allowance to an industry leading 30kgs,
will substantially reduce excess baggage charges. We estimate that the
introduction of web check-in will be revenue neutral; however, we believe it
will enable us to reduce Airport & Handling costs by up to EUR30m per annum.
"We remain cautious in our outlook for the remainder of the fourth quarter. We
expect to achieve significant increases in passenger volumes but also anticipate
that yields in Q4 will fall reflecting our large capacity growth in this weakest
winter quarter as well as the impact of Easter falling in April (it was in March
last year). These factors should result in yields being towards the middle of
the range of -5% to -10%, previously guided. Our full year net profit guidance
is therefore unchanged. Intense competition in the market continues, however,
Ryanair's unique combination of the lowest fare in every market, lowest cost
base and industry leading customer service including our recently announced web
check-in initiative will enable us to continue to pioneer the next phase of the
low fares revolution".
ENDS. Monday, 6th February 2006
For 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 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 303 low fare
routes across 22 countries. By the end of March 2006 Ryanair will operate an
entire fleet of 103 new Boeing 737-800 aircraft with firm orders for a further
131 new aircraft (net of planned disposals), which will be delivered over the
next 6 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 Period Period
ended ended ended ended
December December December December
2005 2004 2005 2004
EUR'000 EUR'000 EUR'000 EUR'000
-------- -------- -------- --------
Operating revenues
Scheduled revenues 311,728 246,712 1,128,508 864,356
Ancillary revenues 58,972 45,066 188,352 137,700
Total operating revenues
-continuing operations 370,700 291,778 1,316,860 1,002,056
-------- -------- -------- --------
Operating expenses
Staff costs 41,071 35,066 124,717 104,419
Depreciation and 28,674 26,056 81,723 70,960
amortisation
Other operating expenses
Fuel & Oil 114,890 72,486 351,763 186,236
Maintenance, 10,289 2,323 35,352 27,221
materials and
repairs
Marketing and 2,405 2,625 11,134 13,400
distribution
costs
Aircraft rentals 10,279 7,400 31,016 23,636
Route charges 40,771 33,389 124,704 101,315
Airport and 54,009 44,243 164,048 134,565
Handling charges
Other 19,133 19,762 61,110 56,453
-------- -------- -------- --------
Total operating expenses 321,521 243,350 985,567 718,205
-------- -------- -------- --------
Operating profit before 49,179 48,428 331,293 283,851
exceptional items
Purchase accounting - 11,925 - 11,925
adjustment
Aircraft Insurance Claim - - 5,939 -
-------- -------- -------- --------
Operating profit after 49,179 60,353 337,232 295,776
exceptional items
-------- -------- -------- --------
Other (expenses)/income
Foreign exchange (658) (2,071) (195) (2,820)
(losses)
Gain on disposal of 911 - 895 6
fixed assets
Interest receivable and 9,456 7,379 27,277 20,197
similar income
Interest payable and (18,324) (15,103) (55,123) (41,088)
similar charges
-------- -------- -------- --------
Total other (expenses)/ (8,615) (9,795) (27,146) (23,705)
income
-------- -------- -------- --------
Profit before taxation 40,564 50,558 310,086 272,071
Tax on profit on (3,746) (3,868) (31,093) (24,230)
ordinary activities
-------- -------- -------- --------
Profit for the period 36,818 46,690 278,993 247,841
======== ======== ======== ========
Earnings per ordinary
share
-Basic(Euro cent) 4.79 6.15 36.43 32.63
-Diluted(Euro cent) 4.76 6.11 36.23 32.43
Adjusted earnings per
ordinary share*
-Basic(Euro cent) 4.79 4.58 35.75 31.06
-Diluted(Euro cent) 4.76 4.55 35.55 30.87
Number of ordinary
shares(in 000's)
-Basic 768,029 759,775 765,831 759,499
-Diluted 773,326 764,438 770,125 764,127
* Calculated on profit for the period before exceptional items Page 1
(net of tax).
Consolidated Balance Sheets in accordance with
IFRS(unaudited)
December 31, March 31,
2005 2005
EUR'000 EUR'000
--------- ---------
Non-current assets
Intangible assets 46,841 46,841
Tangible assets 2,314,651 2,092,283
Derivative financial instruments 3,231 -
Deferred tax 14,776 1,328
--------- ---------
Total Non-current assets 2,379,499 2,140,452
--------- ---------
Current assets
Inventories 33,639 28,069
Other assets 25,497 24,612
Accounts receivable 25,866 20,644
Deferred Tax 3,943 -
Derivative financial instruments 55,216 -
Restricted cash 204,040 204,040
Financial assets: cash > 3months 415,251 529,407
Cash and cash equivalents 1,155,908 872,258
--------- ---------
Total current assets 1,919,360 1,679,030
--------- ---------
Total assets 4,298,859 3,819,482
========= =========
Current liabilities
Accounts payable 58,522 92,118
Accrued expenses and other liabilities 375,037 418,653
Current maturities of long term debt 139,925 120,997
Derivative financial instruments 31,548 -
Current tax 23,228 17,534
--------- ---------
Total current liabilities 628,260 649,302
--------- ---------
Other liabilities
Provisions for liabilities and charges 14,354 7,236
Derivative financial instruments 107,587 -
Deferred tax 132,611 105,509
Other creditors 70,443 29,072
Long term debt 1,395,066 1,293,860
--------- ---------
Total other liabilities 1,720,061 1,435,677
--------- ---------
Shareholders' funds - equity
Called - up share capital 9,783 9,675
Share premium account 594,568 565,756
Profit and loss account 1,437,577 1,158,584
Other reserves (91,390) 488
--------- ---------
Shareholders' funds - equity 1,950,538 1,734,503
--------- ---------
Total liabilities and shareholders' funds 4,298,859 3,819,482
========= =========
Page 2
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statement in accordance with IFRS(Unaudited)
Dec 31, Dec 31,
2005 2004
EUR'000 EUR'000
--------- ---------
Operating activities
--------------------
Profit before taxation 310,086 272,071
Adjustments to reconcile profits before tax
to net cash provided by operating activities
Depreciation 81,723 70,960
(Increase) in inventories (5,570) (720)
(Increase)/decrease in accounts receivable (5,222) 465
Decrease in other current assets 6,770 1,203
(Decrease)/increase in accounts payable (33,596) 21,503
(Decrease) in accrued expenses (45,283) (26,372)
Increase/(decrease) in other creditors 16,052 (7,089)
Increase/(decrease) in maintenance provision 7,118 (1,105)
Interest receivable (7,654) (559)
Interest payable 1,227 2,087
Salary costs 441 141
Share based payment 879 195
Income tax (2,440) 3,418
--------- ---------
Net cash provided by operating activities 324,531 336,198
--------- ---------
Investing activities
--------------------
Capital expenditure (304,091) (342,161)
Financial assets: cash > 3months 114,156 169,458
--------- ---------
(189,935) (172,703)
--------- ---------
Financing activities
--------------------
Net proceeds from shares issued 28,920 1,618
Increase in long debt 120,134 200,405
--------- ---------
Net cash used in financing activities 149,055 202,023
--------- ---------
Increase in cash and cash equivalents 283,650 365,518
Cash and cash equivalents at beginning of period 872,258 744,605
--------- ---------
Cash and cash equivalents at end of period 1,155,908 1,110,123
========= =========
Page 3
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 108 28,812 - - 28,920
shares
Movement in reserves - - - (91,878) (91,878)
Profit for the period - - 278,993 - 278,993
----- ------- --------- -------- ---------
Balance at December 31, 2005 9,783 594,568 1,437,577 (91,390) 1,950,538
===== ======= ========= ======== =========
Reconciliation of adjusted earnings per share
(unaudited)
Quarter Quarter Period Period
ended ended ended ended
Dec-31 Dec-31 Dec-31 Dec-31
2005 2004 2005 2004
EUR'000 EUR'000 EUR'000 EUR'000
------ ------ ------- -------
Profit for the period 36,818 46,690 278,993 247,841
under IFRS
Adjustments
-----------
Purchase accounting - (11,925) - (11,925)
adjustment
Aircraft Insurance Claim - - (5,939) -
Taxation adjustment for above - - 742 -
------ ------ ------- -------
Adjusted profit under IFRS 36,818 34,765 273,796 235,916
====== ====== ======= =======
Number of ordinary shares(in 000's)
768,029 759,775 765,831 759,499
773,326 764,438 770,125 764,127
Adusted earnings per ordinary share
4.79 4.58 35.75 31.06
4.76 4.55 35.55 30.87
Page 4
Ryanair Holdings plc and Subsidiaries
Consolidated Income Statement in accordance
with US GAAP (unaudited)
Quarter Quarter Period Period
ended ended ended ended
December December December December
2005 2004 2005 2004
EUR'000 EUR'000 EUR'000 EUR'000
------ ------- ------- -------
Operating revenues
Scheduled revenues 311,728 246,712 1,128,508 864,356
Ancillary revenues 58,972 45,066 188,352 137,700
------ ------- ------- -------
Total operating revenues
-continuing operations 370,700 291,778 1,316,860 1,002,056
------ ------- ------- -------
Operating expenses
Staff costs 40,878 34,831 123,955 104,104
Depreciation and 29,009 26,857 82,836 72,539
amortisation
Other operating expenses
Fuel & Oil 114,890 72,486 351,763 186,236
Maintenance, 10,289 2,323 35,352 27,221
materials and
repairs
Marketing and 2,405 2,625 11,134 13,400
distribution
costs
Aircraft 10,279 7,400 31,016 23,636
rentals
Route charges 40,771 33,389 124,704 101,315
Airport and 54,009 44,243 164,048 134,565
Handling
charges
Other 19,114 19,740 61,047 56,387
------ ------- ------- -------
Total operating expenses 321,644 243,894 985,855 719,403
------ ------- ------- -------
Operating profit before 49,056 47,884 331,005 282,653
exceptional items
Purchase accounting - 11,925 - 11,925
adjustment
Aircraft Insurance Claim - - 5,939 -
------ ------- ------- -------
Operating profit after 49,056 59,809 336,944 294,578
exceptional items
------ ------- ------- -------
Other (expenses)/income
Foreign exchange (658) (2,071) (195) (2,820)
(losses)
Gain on disposal of 911 - 895 6
fixed assets
Interest receivable and 9,456 7,379 27,277 20,197
similar income
Interest payable and (16,299) (13,004) (49,262) (35,153)
similar charges
------ ------- ------- -------
Total other (expenses)/ (6,590) (7,696) (21,285) (17,770)
income
------ ------- ------- -------
Income before taxation 42,466 52,113 315,659 276,808
Taxation (3,876) (4,136) (31,725) (24,987)
------ ------- ------- -------
Net income 38,590 47,977 283,934 251,821
====== ======= ======= =======
Net income per ADS
-Basic(Euro cent) 25.12 31.57 185.38 165.78
-Diluted(Euro cent) 24.95 31.38 184.34 164.78
Adjusted net income per ADS *
-Basic(Euro cent) 25.12 23.73 181.98 157.93
-Diluted(Euro cent) 24.95 23.58 180.97 156.97
Weighted Average number
of shares
-Basic 768,029 759,775 765,831 759,499
-Diluted 773,326 764,438 770,125 764,127
* Calculated on Net Income before non-recurring items(net of tax).
(5 ordinary shares equal 1 ADR) Page 5
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between IFRS and US generally
accepted accounting principles(unaudited)
(A) Net income under US GAAP
---Quarter ended-- ----Period ended-----
Dec 31, Dec 31, Dec 31, Dec 31,
2005 2004 2005 2004
EUR000 EUR000 EUR'000 EUR'000
------ ------ ------- -------
Net income in accordance 36,818 46,690 278,993 247,841
with IFRS
Adjustments
Pension (100) 40 (117) 120
Share based payments 293 195 879 195
Capitalised interest (net
of amortisation) regarding
aircraft
acquisition programme 1,690 1,298 4,748 4,356
Darley Investments Limited 19 22 63 66
Taxation- effect of above (130) (268) (632) (757)
adjustments
------ ------ ------- -------
Net income in accordance 38,590 47,977 283,934 251,821
with US GAAP ====== ====== ======= =======
(B) Consolidated cashflow statement in accordance
with US GAAP
Dec 31, Dec 31,
2005 2004
EUR'000 EUR'000
------- -------
Cash inflow from operating 324,531 336,198
activities
Cash (outflow) from (189,935) (172,703)
investing activities
Cash inflow from financing 149,054 202,023
activities
------- -------
Increase in cash and cash 283,650 365,518
equivalents
Cash and cash equivalents 872,258 744,605
at beginning of year
------- -------
Cash and cash equivalents 1,155,908 1,110,123
at end of period ======= =======
Cash and cash equivalents 1,155,908 1,110,123
under US GAAP
Restricted cash 204,040 204,040
Deposits with a maturity 415,251 143,287
of between three and six months
------- -------
Cash and liquid resources 1,775,199 1,457,450
in accordance with IFRS ======= =======
Page 6
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between IFRS
and US generally accepted accounting principles(unaudited)
(C) Shareholders' funds - equity
Dec 31, Dec 31,
2005 2004
EUR'000 EUR'000
-------- -------
Shareholders' equity as reported in the
consolidated balance
sheets in accordance with IFRS 1,950,538 1,699,428
Adjustments:
Pension 11,620 11,176
Capitalised interest( net of amortisation) 27,695 21,858
regarding aircraft acquisition programme
Darley Investments Limited - (85)
Minimum pension liability(net of tax) (6,496) (2,631)
Unrealised losses on derivative financial - (150,700)
instruments(net of tax)
Tax effect of adjustments( excluding pension & (5,628) (3,345)
derivative adjustments)
-------- -------
Shareholders' equity as adjusted to accord with US 1,977,729 1,575,701
GAAP ======== =======
Opening shareholders' equity under US GAAP 1,629,559 1,356,281
Comprehensive income
Unrealised gains/(losses) on derivative financial 35,315 (34,019)
instruments(net of tax)
Net income in accordance with US GAAP 283,934 251,821
-------- -------
Total comprehensive income 319,249 217,802
Stock issued for cash 28,921 1,618
-------- -------
Closing shareholders' equity in accordance with US 1,977,729 1,575,701
GAAP ======== =======
Page 7
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 nine months ended December 31, 2005 consist of a
receipt of EUR5.2m (net of tax) in quarter 1 arising from the settlement of an
insurance claim for the scribing of 6 Boeing 737-200 aircraft.
Following the adoption of IFRS (International Financial Reporting Standards) the
Company was obliged to change its accounting treatment for Business
acquisitions. This has resulted in a one-off, non-cash release of EUR11.9m in
the quarter ended December 31, 2004 (see note 5).
Profit after tax and adjusted profit after tax increased by 6% to EUR36.8m
during the quarter compared to last year. The adjusted profit for the nine
months ended December 31, 2005, excluding exceptional items, increased by 16% to
EUR273.8m.
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 Quarter ended December 31, 2005
---------------------------------------
Profit after tax increased by 6% to EUR36.8m, compared to EUR34.8m in the
previous quarter ended December 31, 2004. These results were achieved by strong
growth in passenger volumes and continued tight cost control, excluding fuel,
which was significantly higher than in the comparative period. Total operating
revenues increased by 27% to EUR370.7m, which is greater than the 26% growth in
passenger volumes, as average fares were almost flat and ancillary revenues grew
by 31% to EUR59.0m. Total revenue per passenger as a result increased by 1%
whilst Passenger Load Factor decreased by 1 point to 83% during the period.
Total operating expenses increased by 32% to EUR321.5m, due to the increased
level of activity, and the increased costs, primarily fuel, route charges,
maintenance costs, and airport & handling costs associated with the growth of
the airline. Fuel, which represents 36% of total operating costs compared to 30%
last year, increased by 59% to EUR114.9m 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 6% as all other major cost
items increased at a slower rate than the growth in passenger volumes. This is
despite the impact on last year's comparative figures of the release of
maintenance provisions of EUR5.2m arising from the return of 6 leased Boeing
737-300's to the lessor. Due to the significantly higher fuel costs operating
margins declined by 4 points to 13%, whilst operating profit increased by 2% to
EUR49.2m.
Profit before tax has increased by 5%, higher than the growth in operating
profit due to the slower rate of growth in net interest charges and a gain
arising from the sale of the remaining 737-200 aircraft.
Net Margins declined by 2 points to 10% for the reasons outlined above.
Adjusted basic earnings per share have risen by 5% to 4.79 cent for the period.
Balance Sheet
-------------
Total Cash increased by EUR169.5m to EUR1,775.2m since March 31, 2005 but
represents a decline in the quarter of EUR33.5m due to funding an additional
EUR183.9m in capital expenditure from internal resources. Gross capital
expenditure in the period amounted to EUR304.1m as the company took delivery of
12 Boeing 737-800 aircraft and funded additional aircraft deposits during the
period. Capital expenditure was part funded by the drawdown of long term debt,
Total debt net of repayments increased during the period by EUR120.1m. The
exercise of share options during the period, mainly granted to pilots
contributed a further EUR28.9m in cash during the period. Shareholders' Funds at
Dec 31, 2005 have increased by EUR216.0m to EUR1,950.5m, compared to March 31,
2005 reflecting the EUR279.0m increase in profitability during the period offset
by a reduction of EUR91.9m 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 year ended Dec 31, 2005
----------------------------------------------------------------
Profit after tax, increased by 6% to EUR36.8m due to a 1% increase in average
revenue per passenger, and tight cost control which was offset by fuel costs
increasing by 59% to EUR114.9m during the period. Operating margins, declined by
4 points due to higher fuel costs and lower than normal maintenance charges in
quarter 3 last year due to the release of EUR5.2m of maintenance provisions.
Operating profit increased by 2% to EUR49.2m compared to quarter year ended Dec
31, 2004.
Total operating revenues increased by 27% to EUR370.7m due to the combination of
a 26% increase in passengers carried and a 1% improvement in average revenue per
passenger.
Scheduled passenger revenues increased by 26% to EUR311.7m due to a 1%
improvement in average fares, increased passenger volumes on existing routes,
and the successful launch of new routes and new bases at Liverpool, Luton and
Pisa. Load factor decreased by 1 point to 83% during the period.
Ancillary revenues continue to perform strongly as revenues grew by 31% to
EUR59.0m in the period. This performance reflects the strong growth in on board
sales, non-flight scheduled revenues, and internet income. Ancillary revenues
continue to grow at a faster rate than passenger volumes and now account for 16%
of total revenues compared to 15% last year.
Total operating expenses increased by 32% to EUR321.5m due to the increased
level of activity, and the increased costs primarily fuel, maintenance costs,
aircraft rentals, route charges and airport and handling costs associated with
the growth of the airline. The comparative maintenance costs for quarter ended
December 31, 2004 were positively impacted by the release of maintenance
provisions of EUR5.2m arising from the return of 6 leased 737-300 aircraft.
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 17% to EUR41.1m. This increase primarily reflects
an increase in average employed and the impact of pay increases of 3% granted
during the period.
Depreciation and amortisation increased by 10% to EUR28.7m. 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 agreement 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 59% to EUR114.9m 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 EUR8.0m to EUR10.3m 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. The return of 6 leased 737-300's to ILFC in
quarter 3 of last year resulted in the release of EUR5.2m in maintenance
provisions. Excluding the impact of the release of these provisions, maintenance
costs would have increased by 37%, in line with the growth of leased aircraft
fleet.
Marketing and distribution costs decreased by EUR0.1m to EUR2.4m due to the
reduction in the level of marketing activity and related expenditure compared to
the previous year.
Aircraft rental costs increased by 39% to EUR10.3m reflecting an average of 6
additional aircraft on lease during the period partially offset by the savings
arising from the return of 6 leased 737-300 aircraft to ILFC.
Route charges increased by 22% to EUR40.8m 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 EUR54.0m, 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.
Other expenses declined by 3% to EUR19.1m, due mainly to savings on various
indirect costs and improved margins and on some new and existing ancillary
revenue products.
Operating margins have declined by 4 points to 13% for the period due to the
reasons outlined above, however despite this, operating profits have increased
by 2% to EUR49.2m.
Interest receivable has increased by EUR2.1m to EUR9.5m due to the combined
impact of a higher cash balance and increases in average deposit rates during
the period.
Interest payable increased by EUR3.3m due to the drawdown of debt to part fund
the purchase of new aircraft during the period.
Gains on disposal of assets were EUR0.9m arising from the disposal of the
remaining 737-200 aircraft during the period.
Detailed Discussion and Analysis nine months Ended December 31, 2005
--------------------------------------------------------------------
Profit after tax, increased by 16% to EUR273.8m due to average fares increasing
by 2% and strong ancillary revenue growth, which was offset by fuel costs which
increased by 89% to EUR351.8m reflecting the higher US$ cost per gallon.
Operating margins, as a result, fell by 3 points to 25%, which in turn resulted
in operating profit increasing by 17% to EUR331.3m compared to the previous nine
months ended December 31 2004.
Total operating revenues increased by 31% to EUR1,316.9m whilst passenger
volumes increased by 28% to EUR26.7m. Total revenue per passenger increased by
3% in the quarter due to a combination of higher average fares and strong
ancillary revenue growth.
Scheduled passenger revenues increased by 31% to EUR1,128.5m due to a
combination of increased passenger volumes on existing routes, the successful
launch of new bases at Liverpool, Luton and Pisa and a 2% increase in average
fares.
Ancillary revenues increased 37% to EUR188.4m, a faster growth rate than
passenger volumes, reflecting a strong performance in non-flight scheduled
revenues, on-board sales and other ancillary products.
Total operating expenses increased by 37% to EUR985.6m 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$.
Staff costs have increased by 19% to EUR124.7m primarily due to a 15% increase
in average employee numbers to 2,963 and the impact of pay increases of 3%
compared to the previous nine months ended December 31, 2004.
Depreciation and amortisation increased by 15% to EUR81.7m. A higher
depreciation charge arose due to an increase in the size of the 'owned' fleet
from 64 to 77, partially offset by, a lower amortisation charge due to the
retirement of 737-200 aircraft and the positive impact of a new engine
maintenance deal on the cost of amortisation of 737-800 aircraft. The
strengthening of the Euro to US$ also had a positive impact on the depreciation
and amortisation charge relating to new aircraft deliveries.
Fuel costs rose by 89% to EUR351.8m due to an increase in the number of sectors
flown, an 10% 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 30% to EUR35.4m 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 partially
offset by an increase in the number of leased 737-800 aircraft from 10 to 17.
Marketing and distribution costs decreased by 17% to EUR11.1m 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 EUR31.0m reflecting an additional 7
aircraft on lease during the period offset by the savings arising from the
return of 6 737-300's to ILFC.
Route charges increased by 23% to EUR124.7m due to an increase in the number of
sectors flown and an increase of 10% in the average sector length, offset by a
reduction in enroute charges in certain EU countries.
Airport and handling charges increased by 22% to EUR164.0m, which was slower
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.
Other expenses increased by 8% to EUR61.1m, 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 3 points to 25% due to the reasons outlined
above whilst operating profits have increased by 17% to EUR331.3m during the
period.
Interest receivable has increased by EUR7.1m to EUR27.3m for the period due to
the combined impact of higher levels of cash and cash equivalents and increases
in average deposit rates earned in the period compared to last year.
Interest payable increased by EUR14.1m to EUR55.1m due to the drawdown of debt
to part fund the purchase of new aircraft.
Foreign exchange losses have decreased during the nine months to EUR0.2m due to
the positive impact of changes in the Sterling and US Dollar exchange rates
against the Euro compared to last year.
The Company's Balance Sheet continues to reflect the significant capital
expenditure programme being undertaken by the group. An additional 11 aircraft
were delivered during the period which in conjunction with the payment of
deposits on future deliveries accounted for the bulk of EUR304.1m spent on
capital expenditure during the last 9 months. During the same period the Company
generated cash from operating activities of EUR310.1m. that part funded the
capital expenditure programme with the balance reflected in Total Cash of
EUR1,775.2m. The exercise of share options, primarily by pilots generated a
further EUR28.9 cash for the Group. Long term Debt, net of repayments increased
by EUR120.1m during the period.
Shareholders' Funds at December 31, 2005 have increased by EUR216.0m to
EUR1,950.5m, compared to March 31, 2005 reflecting the EUR279.0m increase in
profitability during the period offset by a reduction of EUR91.9m resulting from
changes in the accounting treatment for derivative financial instruments,
pensions and stock options following the adoption of IFRS.
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
quarter year ended December 31, 2005 on 3rd February, 2006.
3. Generally Accepted Accounting Policies
--------------------------------------
The Management Discussion and Analysis of Results for the quarter ended December
31, 2005 and the comparative period are based on the results reported under the
group's preliminary IFRS accounting policies, as adjusted certain for
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
EUR24.2 million with a corresponding reduction in costs in the period ended 31
December 2005 (31 December 2004: EUR13.5million). This has resulted in an
increase in net margin of 0.4% to 20.4% in the period ended 31 December 2005 (31
December 2004 0.3% to 23.4%). Going forward the Group intends to report
ancillary revenues and costs on a basis consistent with the treatment described
herein."
5. Purchase Accounting adjustment
------------------------------
Subsequent to the acquisition of Buzz Stansted in April 2003 Ryanair
renegotiated the terms and conditions of onerous aircraft leases and agreed to
return the aircraft to the lessors in late 2004, thereby releasing Ryanair from
any remaining lease obligations at that time. Irish GAAP permitted that such an
adjustment could be made to the provisional value of the assets and liabilities
acquired as part of the original business combination; provided that the
adjustment was made either in the reporting period that the combination took
place or the first full financial period following the transaction. IFRS 3,
however, only allows such an adjustment to be made in the 12 month period
following the acquisition, and accordingly, as the event occurred more than 12
months after the acquisition date, under IFRS this adjustment is made to the
Group's income statement instead. This gives rise to a credit of EUR11.9m to the
income statement in the quarter to 31 December 2004.
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: 06 February 2006
By:___/s/ Howard Millar____
H Millar
Company Secretary & Finance Director