Ryanair Narrows Guidance After Higher Operating Costs Hurt Adjusted After-Tax Profit —Update
By Anthony O. Goriainoff
Ryanair Holdings said that operating costs in the third quarter rose and led to a fall in adjusted after-tax profit as it narrowed its annual guidance for the metric.
The Irish budget airline said Monday that for the quarter ended Dec. 31 its fuel bill rose over 35% to 1.2 billion euros ($1.30 billion). It also booked higher staff costs which reflect pay restoration, crew, engineering and handler pay increases and higher crewing ratios as well as the earlier timing of maintenance costs.
Ryanair said Monday that adjusted after-tax profit--its preferred metric-- for the quarter was EUR15 million compared with EUR211 million the year before. Citi analyst Sathish B. Sivakumar said this was also due to the effect of some online travel agencies not offering the airline's flights in December. The airline said it welcomed the sudden removal of its flights as this protected customers from potential scams and booking changes.
Revenue for the quarter was EUR2.70 billion, compared with EUR2.31 billion a year ago.
The company said revenue per passenger rose 9%, with ancillary revenue up 2% to around EUR23 and average fares up 13% to over EUR42.
The airline carried 41.4 million passengers in the quarter compared with 38.4 million a year ago. Load factor--a measure of how full a plane is--for the period fell one percentage point to 92%.
The low-cost carrier said it continued targeting traffic of around 183.5 million for fiscal 2023 despite slightly lower load factors in the third quarter and Boeing delivery delays.
Ryanair said that although it will benefit from the first half of Easter traffic falling in late March, this was unlikely to fully offset weaker-than-previously-expected load factors and yields in late third quarter and early fourth quarter. It added that its fourth quarter--traditionally its weakest quarter--will also be affected by the partial unwind of free emissions trading systems carbon credits from Jan. 1.
The company narrowed its profit after tax guidance for the year to between EUR1.85 billion and EUR1.95 billion, from prior guidance of between EUR1.85 billion and EUR2.05 billion.
"This guidance and the full year result remains heavily dependent upon avoiding unforeseen adverse events in the fourth quarter such as the Ukraine war, the Israel-Hamas conflict and further Boeing delivery delays," it said.
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com
(END) Dow Jones Newswires
January 29, 2024 02:25 ET (07:25 GMT)
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