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(Alliance News) - Ryanair Holdings on Monday reported a rise in earnings and traffic in its recently ended financial year which was largely unaffected by the Covid-19 pandemic that since has battered the airline sector.
The Irish budget carrier yet again took aim at "state aid doping", reaffirmed its bleak traffic expectations for the second quarter of the new year, and said it expects a EUR200 million loss in the first quarter.
Revenue in the financial year that ended March 31 was 10% higher annually at EUR8.49 billion from EUR7.70 billion. Pretax profit, however, was down by 29% year-on-year to EUR670.3 million from EUR948.1 million.
Weighing on Ryanair's profit was a EUR407.2 million charge for fuel hedge ineffectiveness. Without taking that accounting hit, pretax profit would have come in 14% higher at EUR1.08 billion. The bulk of the ineffectiveness costs were in relation to the Covid-19 pandemic.
In the recently ended financial year, Ryanair's total number of passengers climbed 3.8% to 148.6 million, though its load factor slipped slightly to 95% from 96%. The fuel bill was 14% higher at EUR2.8 billion, amid higher prices during the year and the rise in traffic.
Looking ahead, Ryanair said: "Financial 2021 will be difficult for the Ryanair Group as its airlines work hard to return to scheduled flying following the Covid-19 crisis. Unlike many flag carrier competitors, Ryanair will not request or receive state aid.
"When group airlines return to scheduled flying from July, the competitive landscape in Europe will be distorted by unprecedented quantums of state aid."
Ryanair noted Deutsche Lufthansa has taken EUR12.4 billion in aid, and recently renationalised Alitalia has received EUR3.5 billion in government assistance. With large war chests for these rivals, Ryanair said it expects below-cost selling in the year ahead.
Ryanair earlier in May said it could slash up to 3,000 jobs as the Dublin-based company embarks on a restructuring in response to destructive effects of Covid-19.
The carrier also confirmed it expects to carry no more than 50% of its original traffic target of 44.6 million in its financial second quarter, from July to September.
Ryanair expects to operate fewer than 1% of its scheduled flight programme in April, May and June - its first quarter. It expects a EUR200 million loss in the first quarter, with a reduced loss in the second.
The company also added it is in talks with Boeing Co to cut planned aircraft deliveries, "to reflect slower traffic growth post Covid-19 in 2020 & 2021".
"The group currently expects to carry less than 80 million passengers in financial 2021, almost 50% below its original 154 million target," Ryanair said.
The stock was up 4.2% in London early Monday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 2.5% at 5,941.66
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Hang Seng: up 0.4% at 23,888.29
Nikkei 225: closed up 0.5% at 20,133.73
DJIA: closed up 60.08 points, 0.3%, at 23,685.42
S&P 500: closed up 0.4% at 2,863.70
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GBP: soft at USD1.2111 (USD1.2125)
EUR: flat at USD1.0825 (USD1.0818)
Gold: up at USD1,761.07 per ounce (USD1,743.84)
Oil (Brent): up at USD33.71 a barrel (USD31.27)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
Canada Victoria Day. Financial markets closed.
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Extra trains are expected to take thousands more people back to work under the UK government's plan to accelerate economic activity by lifting lockdown restrictions, PA reported. After the first weekend in which people in England could enjoy sunbathing and picnics outdoors, public transport operators were preparing to carry many more commuters to building sites, factories and offices on Monday. The move comes at the start of the first full working week since Boris Johnson set out his plan for easing the coronavirus lockdown in England, urging those employees unable to work from home to return to their places of employment. The Times newspaper reported lorry drivers will make up the bulk of exemptions to plans to impose a 14-day quarantine on international travellers regardless of mode of travel. The paper said hauliers will account for around two-thirds of those who will not be asked to self-isolate in what it called a "blow to the airline and tourism industries". Further exemptions are to be agreed at a Cabinet meeting, the Times added.
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Spain on Sunday reported 87 coronavirus deaths over a 24-hour period, the first time in two months that the daily toll has dropped below 100. The number came a day before Spain is to further relax lockdown measures across the country, except in Madrid and Barcelona. At the height of the current outbreak in early April, Spain counted 950 deaths in one day. Spain remains one of the countries hardest hit by the virus with a total of 27,650 deaths, the health ministry reported on Sunday. The number of confirmed cases is more than 231,000.
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Italy also on Sunday recorded the fewest deaths from coronavirus in one day since its two-month lockdown began, as the country stands poised to reopen most commercial activity. The civil protection unit said 145 people had died of the virus in the last 24 hours, the lowest level since March 9, when 97 people died of Covid-19. On Monday, most of the country's businesses will emerge from a two-month quarantine imposed by the government on March 9. Restaurants, bars, cafes, hairdressers, and retail stores will be allowed to reopen. Gyms, pools, cinemas and theatres are allowed to open on May 25.
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BROKER RATING CHANGES
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MORGAN STANLEY CUTS ASHTEAD GROUP TO 'EQUAL-WEIGHT' ('OVERWEIGHT') - TARGET 2200 PENCE
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BERNSTEIN RAISES ROYAL MAIL TO 'MARKET-PERFORM' ('UNDERPERFORM') - TARGET 165 (135) PENCE
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JEFFERIES STARTS MONEYSUPERMARKET,COM WITH 'BUY' - PRICE TARGET 410 PENCE
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COMPANIES - FTSE 100
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AstraZeneca said Enhertu has been granted breakthrough therapy designation in the US, while Bevespi Aerosphere was approved in China. The drugmaker said Enhertu was developed for the treatment of patients with metastatic non-small cell lung cancer. Astra noted that non-small cell lung cancer is the most common type of lung cancer, and prognosis is particularly poor for patients with metastatic disease as only about 6% to 10% will be alive five years after diagnosis. Turning to Bevespi Aerosphere, Astra said it has been approved in China as a maintenance treatment to relieve symptoms in patients with chronic obstructive pulmonary disease, including chronic bronchitis and emphysema.
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GlaxoSmithKline said an interim analysis of a study has found ViiV Healthcare's injectable formulation of cabotegravir to be more effective then current standard care in prevention of HIV. ViiV Healthcare is a global specialist HIV company majority owned by Glaxo, with pharmaceutical peers Pfizer and Shionogi as shareholders. Glaxo said interim analysis of the HIV Prevention Trials Network 083 study found Cabotegravir to be 69% more effective in preventing HIV acquisition in men who have sex with men and transgender women who have sex with men when compared to the current standard of care, daily oral emtricitabine/tenofovir disoproxil fumarate 200 milligrams and 300 mg tablets.
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COMPANIES - FTSE 250
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Gold miner Centamin said it delivered a strong financial performance in 2019 characterised by continued operational improvements at its flagship Sukari mine in Egypt. Centamin's revenue came in at USD658.1 million in the calendar year, up 7% from USD614.8 million in 2018, and pretax profit increased 13% to USD173.0 million from USD152.7 million. Gold production rose 2% to 480,528 ounces in 2019 from 472,418 ounces in 2018, but the amount of gold the company sold fell 3% to 470,020 ounces from 484,322 ounces. Looking ahead, Centamin maintained its production guidance of between 510,000 to 540,000 ounces of gold in 2020.
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Hochschild Mining said it has met all the Covid-19 health and safety protocols established by the Peruvian government to restart operations at the Inmaculada and Pallancata mines. The gold miner plans to begin ramping-up progressively to achieve full production in the coming weeks. Hochschild expects to reissue its annual guidance once full production is achieved and the overall impact of the suspensions has become clear, it added.
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Ferrexpo appointed James North as acting chief executive from the conclusion of its annual general meeting on May 28. The iron pellet producer said North will not join the board but will attend all board meetings. Chris Mawe will return to his role as chief financial officer.
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Insurer Hiscox faces legal actions as the Hiscox Action Group seeks GBP40 million of payouts for companies under business interruption policies to cover the costs of the lockdown, the Financial Times reported. The Hiscox Action Group - a pressure group that has been launched since the coronavirus crisis started - has been given the green light from lawyers and funders to start legal action in the next few days. It will be run by law firm Mishcon de Reya and financed by litigation funder Harbour. Hiscox and other insurers said that, in most cases, business interruption policies do not cover costs related to the pandemic.
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COMPANIES - GLOBAL
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Boeing on Sunday said the X-37B autonomous spaceplane has been launched on top of a United Launch Alliance Atlas V rocket. Built by Boeing, the X-37B's latest mission was its second for the US Space Force and its sixth overall. This most recent mission will see the spaceplane deploy FalconSAT-8, a small US Air Force Academy-developed satellite which is sponsored by the Air Force Research Laboratory and will conduct experiments on orbit. The mission will also test technologies for reusable space vehicles. First launched in April 2010, the X-37B was originally designed for 270-day missions but has since spent far longer, including spending 780 days in orbit before returning to earth in October 2019.
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Monday's Shareholder Meetings
Alliance Pharma
Faron Pharmaceuticals
Bank of Georgia
Alcentra European Floating Rate Income Fund
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By Tom Waite; thomaslwaite@alliancenews.com
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