Last checked at 
(Alliance News) - Ryanair turned to a big loss in the first quarter due to travel restrictions put in place because of the Covid-19 pandemic, the Irish budget airline reported Monday.
Ryanair swung to a loss of GBP185 million in the first quarter ended June 30 from a net profit of GBP243 million a year ago.
The company saw 99% of its fleet grounded from mid-March to the end of June due to travel restrictions caused by Covid-19. First quarter air traffic fell to just 500,000 passengers from 42.0 million a year before.
"The past quarter was the most challenging in Ryanair's 35 year history. Covid-19 grounded the group's fleet for almost 4 months as EU governments imposed flight or travel bans and widespread population lockdowns," Ryanair said.
Ryanair implemented an 85% reduction in costs during the quarter, which it said was not enough to offset the heavy revenue losses.
The company's balance sheet had GBP3.9 billion in cash at June 30, one of the strongest in the industry, according to Ryanair.
"Since mid-March, the group has moved quickly and smartly to preserve cash, cut costs, cancel share buybacks and defer all non-essential capital expenditure. This has protected the group's very strong liquidity position as it returns to flying in July," Ryanair said.
The company said it expects to carry about 60 million passengers in the full financial year, down 60% from 149 million in financial 2020. It expects to record a smaller loss in the second quarter than the first, amid a a gradual return to flying from July 1.
Ryanair resumed flights across the majority of its network in July and expects to operate around 40% of its normal schedule this month, rising to 60% in August and hopefully 70% in September.
"The Ryanair group will emerge from the Covid-19 crisis with a much lower cost base, which will be essential to fund lower fares as the group competes against unlawfully state aided flag carriers," it added, continuing on Monday its running complaint about state support received by competitors such as Deutsche Lufthansa.
Ryanair shares were down 8.4% in London early Monday.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 0.2% at 6,111.81
----------
Hang Seng: down 0.2% at 24,664.51
Nikkei 225: closed down 0.2% at 22,715.85
DJIA: closed down 182.44 points, or 0.7%, at 26,469.89
S&P 500: closed down 0.6% at 3,215.63
----------
GBP: up at USD1.2832 (USD1.2786)
EUR: up at USD1.1715 (USD1.1635)
Gold: up at USD1,934.70 per ounce (USD1,900.17)
Oil (Brent): flat at USD43.11 a barrel (USD43.06)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Monday's Key Economic Events still to come
0930 BST UK capital issuance
1000 CEST EU monetary developments in euro area (M3)
1000 CEST Germany Ifo business climate
0830 EDT US advance report on durable goods
----------
China on Monday reported its highest number of coronavirus cases in three months, part of a worrying swell of second and third-wave infections that are hitting Asia and Europe. Australia has been rocked by its deadliest surge since the start of the pandemic, Hong Kong is experiencing record daily numbers and Spain's caseload has tripled in the last fortnight. Meanwhile, other regions are still battling their first waves after never getting the virus under control: the US alone has recorded almost 4.23 million cases of COVID-19, while infections in Latin America and the Caribbean surged on Sunday to briefly overtake North America's total for the first time. Worldwide the confirmed case count has passed 16 million, although experts believe that figure is vastly short of the true number. One study in New Delhi found a quarter of people tested had contracted the virus, amounting to 4.7 million in the Indian capital alone. China – where the coronavirus was first reported in December last year – recorded 61 cases on Monday, the highest daily figure since April.
----------
It could take half a decade for a key measure of the UK's economy to get back to where it was before the onset of coronavirus, new figures have suggested. Experts at big four consultancy Ernst & Young Global said that they expect gross domestic product to remain below where it was in 2019 until 2024, dealing a blow to hopes of a rapid recovery. The consultancy's experts believe that GDP will contract by 12% this year in the UK, well worse than the 8% they predicted just a month ago. It will then bounce back to notch up 6.5% growth in 2021. Howard Archer, chief economic adviser to the EY Item Club, said: "Even though lockdown restrictions are easing, consumer caution has been much more pronounced than expected."
----------
BROKER RATING CHANGES
----------
CREDIT SUISSE RAISES KINGFISHER TO 'OUTPERFORM' (NEUTRAL) - PRICE TARGET 290 (255) PENCE
----------
JEFFERIES RAISES NATIONAL GRID TO 'BUY' (HOLD) - PRICE TARGET 1,060 (910) PENCE
----------
RBC INITIATES OXFORD BIOMEDICA WITH 'OUTPERFORM' - TARGET 1,000 PENCE
----------
COMPANIES - FTSE 100
----------
AstraZeneca said it has entered into a multi-billion dollar oncology collaboration with Daiichi Sankyo. The two will work on Daiichi Sankyo's proprietary trophoblast cell-surface antigen 2 (TROP2)-directed antibody drug conjugate and potential new medicine for the treatment of multiple tumour types. "DS-1062 is currently in development for the treatment of multiple tumours that commonly express the cell-surface glycoprotein TROP2. Among them, TROP2 is overexpressed in the majority of non-small cell lung cancers and breast cancers tumour types that have long been a strategic focus for AstraZeneca," the London-listed pharmaceutical firm said. The companies will jointly develop and commercialise DS-1062 worldwide, except in Japan where Daiichi Sankyo will maintain exclusive rights. AstraZeneca will pay Daiichi Sankyo USD1 billion upfront in staged payments, with USD350 million due on completion, USD325 million after a year and USD325 million after two years. AstraZeneca will pay additional conditional amounts of up to USD1 billion for the successful achievement of regulatory approvals and up to USD4 billion for sales-related milestones. AstraZeneca added that the transaction does not impact its financial guidance for 2020.
----------
Separately, AstraZeneca said its Imfinzi drug has been recommended for marketing authorisation in the EU for the first-line treatment of adults with extensive-stage small cell lung cancer.
----------
London-based lender HSBC Holdings denied Chinese media reports that it had "framed" telecom giant Huawei or "fabricated evidence" that led to the arrest of a top company official. Washington's investigations into Huawei – for allegedly violating US sanctions on Iran – started before the bank's involvement with the company in late 2016, the lender said Saturday in its first public comments on Huawei's legal battle in North America. "HSBC has no malice against Huawei, nor has it framed Huawei," the bank said in a statement posted on the Chinese messaging app WeChat. "HSBC has not fabricated evidence or concealed facts, nor will it distort facts or harm any customers for our own benefit." The HSBC statement came a day after Chinese state media, including the communist party mouthpiece People's Daily, published reports accusing HSBC of lying about Huawei during an investigation by the US department of justice. The probe led to Canada arresting Huawei's chief financial officer Meng Wanzhou in December 2018.
----------
COMPANIES - FTSE 250
----------
Data and analytics company Ascential said it produced a "resilient" performance in the first half against a challenging backdrop. Revenue slumped to GBP144.3 million from GBP236.2 million, down 39%. Marketing segment revenue slumped 74%, primarily due to the cancellation of the 2020 edition of Cannes Lions. Ascential swung to a pretax loss of GBP78.3 million from a GBP30.5 million profit a year ago. Looking ahead, the company said: "Clearly, the impact on our business in 2020 from Covid-19 has been significant. While we do not expect an immediate recovery in underlying trading conditions it is also apparent that a number of our brands remain well positioned, arguably more so than six months ago, to benefit from the accelerated shift towards e-commerce that we have witnessed, particularly clearly, in the past period."
----------
Signature Aviation reported a like-for-like sales decline of 31% in the first half "solely due to the impact of Covid-19". The aviation support services provider said revenue for the continuing group was down 38% in the six months to June. Flying activity continues to show an improving trend, said Signature Aviation, with activity down just 32% in June versus an average of 77% in April. "All guidance remains suspended. We will continue to monitor the Covid-19 recovery closely and will provide further updates when we publish our interim results in early September. Furthermore, the board will review the decision on suspension of dividend payments as trading conditions become clearer," said Signature Aviation. The company added that it has secured a covenant waiver from lenders for the testing periods ending December 31, 2020 and June 30, 2021.
----------
COMPANIES - GLOBAL
----------
Enterprise software provider SAP saidprofit almost quadrupled in the first half of 2020, thanks to an increase in revenue and lower operating expenses. The Walldorf, Germany-based company reported revenue growth of 4% in the six months to the end of June to EUR13.26 billion from EUR12.72 billion generated a year earlier. Operating profit jumped to EUR2.49 billion from EUR691 million year-on-year, thanks to a cost reduction initiative. SAP said its operating expenses decreased by 10% to EUR10.77 billion, mainly driven by a reduction in restructuring expenses, and share-based compensation. Pretax profit surged to EUR2.44 billion from EUR675 million a year earlier. Revenue improvement resulted primarily from an increase in SAP's cloud business, it said, where revenue was EUR4.01 billion in the first half, an increase of 25% compared to the same period in 2019.
----------
Monday's Shareholder Meetings
Tekcapital PLC - AGM
Cambridge Cognition Holdings PLC - AGM
National Grid PLC - AGM
SpaceandPeople PLC - AGM
BMO UK High Income Trust PLC - AGM
Draper Esprit PLC - AGM
----------
By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
