Ryanair Q1 Highlights: Revenue Growth Of 40%, Net Profit More Than Tripled On Weak Comparables

Ryanair Holdings PLC RYAAY reported Q1 FY24 revenue growth of 40% Y/Y to €3.65 billion.

Net profit escalated to €663 million, a significant increase from €170 million a year ago, benefiting from strong easter, the extra U.K. public holiday, and weak comparables (on Russia’s invasion of Ukraine).

Scheduled revenues were up 57% Y/Y to €2.47 billion, led by traffic growth of 11% Y/Y to 50.4 million customers and a 42% Y/Y uptick in average fares to €49. Also, Ancillary revenue rose 15% Y/Y to €1.18 billion.

Operating costs increased 23% Y/Y to €2.94 billion on higher fuel costs (+30% Y/Y to €1.34 billion), staff costs, and increased ATC fees.

Net cash generated by operating activities totaled €1.25 billion. As of June 30, 2023, net cash stood at €0.98 billion.

The company’s fuel needs are around 85%, hedged at approximately $89bbl for FY24, and FY25 hedging increased to 27% at approximately $74bbl.

“Every customer switching to Ryanair from high fare EU legacy carriers can reduce their emissions by up to 50% per flight. We continue to invest heavily in new technology aircraft. During Q1 we took delivery of 21 fuel efficient, B737-8200 “Gamechangers” (4% more seats, 16% less fuel & CO2 and 40% quieter). In May, we signed a deal with Repsol to supply SAF to Ryanair bases in Spain. This builds on similar SAF arrangements with OMV, Neste & Shell and puts the Group on track to achieve its ambitious 2030 goal of powering 12.5% of Ryanair flights with SAF - with 9.5% already secured," said Michael O’Leary, CEO.

FY24 Outlook: Ryanair now expects traffic to be around 183.5 million (+9% Y/Y), slower than earlier guidance of 185 million, on delivery delays in spring and in autumn 2023. 

The company now projects around a €2 billion (vs. over €1 billion earlier) increase in ex-fuel unit costs owing to higher crew ratios, annualized crew pay restoration, higher ATC & route charges, and delay in Gamechanger delivery. 

The company stated that it remains cautiously optimistic that FY24 PAT will be modestly ahead of last year despite H2 deliveries delay, volatile oil prices, limited H2 visibility, and the risk of tighter consumer spending in winter.

Also Read: Ryanair Intends To Buy Slots IAG May Hand For Air Europa Acquisition: Report

Price Action: RYAAY shares are trading down by 3.74% at $103.50 premarket on the last check Monday.