U.S. News

Ryanair Profit Rises 33%, But Warns of Slowdown

Reuters
WATCH LIVE

Ryanair posted a better than expected 33% rise in full-year net profit on Tuesday but warned it expected growth to fall to about 5% in the current year due to weaker ticket prices.

Europe's biggest low-cost carrier said profit after tax but before one-off items rose to 401.4 million euros (US$540.4 million) in the 12 months to the end of March.

That compares to 301.5 million a year earlier and the 393.5 million average of 12 analysts' forecasts compiled by Reuters Estimates.

Ryanair, which had cash reserves of 2.2 billion euros at the end of March, also said it planned to buy back and cancel 300 million euros worth of its own shares.

The buyback is expected to run from June 7 onwards and, based on a share price of 5.20 euros, will equate to about 3.6% of the airline's issued share capital.

Shares in Ryanair have fallen about 15% since hitting a life time high of 6.38 euros in late April, dented by a string of downbeat comments from the airline's executives on the outlook for ticket prices, known as yields.

"Whilst we remain confident that traffic over the coming year will grow by 22% to over 52 million passengers, we believe that if trading conditions continue to be soft, then yields will fall by up to 5% compared to last year's figure," Ryanair said in a statement.

"As a result we expect profit growth over the coming year to be more modest and to rise by approximately 5% ... We believe that the company and our shareholders should remain cautious and conservative."