Ryanair has reported better than expected full year results and has given positive indications on summer bookings, but warned that the winter season would not be as bright.
Its shares closed down eight cent at €4.30 in Dublin this afternoon after the warning.
The budget airline, Europe's largest, reported a 5% drop in full year net profit to €226.6m before goodwill and exceptional items, beating forecasts of €195m to €218m. Adjusted earnings per share were down 6% to 29.9 cent - again higher than the average forecast of 27.9 cent.
Annual passenger traffic grew by a record 47% to over 23 million. Ryanair said this growth was fueled by 'significantly lower fares'. Total revenues rose by 28% to over €1 billion for the first time, due to a 14% fall in yields.
The airline had flagged a 10% net profit drop in January when it warned it was having to slash ticket prices to fill seats on a rapidly expanding network amid intensely competitive conditions
'Contrary to our earlier fears, our adjusted profit in the final quarter marks our 28th consecutive profitable quarter since Ryanair first floated in May 1997,' a statement from the company said.
'Our lookout for the next 12 months remains very conservative,' Chief Executive Michael O'Leary said. He added that he expected passenger traffic growth to drop to around 20% this year from 47% the previous year.
He predicted that there will be more airline casualties next winter, a process that has already started in recent months with the closure of four airlines in Ireland, the UK and Scandinavia.
Ryanair also pledged to lower prices further over the next four years as it expands traffic to over 50 million passengers a year.
Michael O'Leary said the year was characterised by adverse market conditions, including sterling weakness, the war in Iraq, the threat of terrorist attacks, significantly higher oil prices and intense price competition all over Europe.
'Despite these challenges, Ryanair has significantly lowered fares for our customers, carried over 23 million passengers, still maintained a world leading after tax profit margin of over 20% and ended the year with over €1.2 billion in cash,' O'Leary added.
He said the airline's two new bases in Rome Ciampino and Barcelona Girona are performing 'extremely well'. Current bookings indicated that load factors are both bases will exceed 85% throughout the summer period.
O'Leary predicted that regulatory battles, such as those in Charleroi and Strasbourg, will continue this year, but dismissed them as 'temporary obstacles'. He said the airline is confident of winning both its appeals on the Charleroi and Strasbourg cases.
Dismissing the recent 'hysteria' about higher oil prices, O'Leary said he believes the growth of low fare travel will not be damaged or slowed by higher fuel prices.
'Whilst we are almost fully hedged till the end of the second quarter, we are largely unhedged thereafter, as it would be unwise to lock in at the current high forward rates,' the Ryanair CEO said. 'Our view is that prices will fall this winter, or next year, and only then will we hedge, in order to benefit from such reductions,' he added.
* Ryanair said today that its passenger numbers for May flew 19% higher to 2.17 million compared to the same month last year. Its load factor - an industry measure of how many seats were sold - rose to 81% in May. This compares to a load factor of 77% in May 2003.
