Ryanair Reports Record Profit But Warns Slower Growth
Xinhua | Jun. 05, 2007
Ryanair, Europe's biggest budget airline, announced on June 5 a record net profits of EUR401.4 million (US$541.7 million) in the 12 months through March 31 thanks to higher ticket prices, but warned of a significant slowdown in profits due to higher fuel and airport costs, fiercer competition and lower ticket prices in the 2007 fiscal year.
The Dublin-based company said net income rose to EUR435.6 million (US$586.4 million) in the 2006 fiscal year from EUR306.7 million (US$414 million) a year earlier. Excluding exceptional items, earnings rose 33 percent to EUR401.4 million (US$541.7 million dollars). Sales rose 32 percent to nearly EUR2.24 billion (US$3.02 billion).
"These record profits and the strong growth in traffic, yields and revenues during a period of much higher oil prices and intense competition is a tribute to the strength of Ryanair's lowest fare model," Ryanair's CEO Michael O'Leary said.
The company purchased 30 new aircraft, bringing the fleet to 133 units at year end and opened 153 new routes, including three new bases at Marseille, Madrid and Bremen, strengthening the balance sheet with year end cash of EUR2.2 billion (US$2.97 billion).
However, Ryanair is expecting a slow profit growth to about 5 percent in this fiscal year as a result of surging fuel costs, more intense competition, higher airport taxes and duties on passengers.
The news sent Ryanair's shares almost eight percent lower on June 4. O'Leary urged shareholders to remain "cautious and conservative" and accused the British government of "highway robbery" for doubling passenger taxes since February.