Ryanair's annual profit forecast up after strong Q1
July 29, 2014, 12:01 am TWN
DUBLIN, Ireland--Irish low-fare airline Ryanair, which hit a weak patch last year, reported a strong recovery but downward pressures on fares, in a quarterly results statement on Monday.
The airline raised its first-quarter net profits by one and a half times, it said and raised its forecast for the whole year, forecasting rising passenger numbers and falling costs.
Ryanair lifted its profits guidance for the whole of its year running from April to 620-650 million euros (US$833-$873 million), it said in a results statement.
That compared with the previous forecast range of 580-620 million euros that was given in May.
If realized, the forecast for the whole year represents a jump of more than a fifth on last year's earnings after tax.
Last year, the company, which was a leading pioneer of low-cost air travel in Europe and is known for aggressive marketing policies, reported the first fall in profits for five years on falling passenger numbers and rising costs.
But on Monday, the group forecast that it will carry 86 million passengers this year, up five percent from the figure last year. That was up from the previous forecast of 84.6 million passengers.
However, Ryanair warned of a difficult second half to the financial year owing to "downward pressures" on fares.
"We would strongly caution both analysts and investors against any irrational exuberance in what continues to be a difficult economic environment," said chief executive Michael O'Leary in the statement.
Net profits surged in the first quarter, aided by the timing of Easter — which was not included in the year-earlier period.
Earnings after taxation soared 152 percent to 197 million euros in the three months to June. That compared with 78 million euros in the same part of last year.
Passenger numbers grew by 4.0 percent to 24.3 million, while revenues grew by 11 percent to 1.49 billion euros.
Ryanair added it would launch its new business service in September, targeting a market with bigger margins which the low-cost carrier has not traditionally attracted.