Ryanair first-half profit soars 37%

First-half profit after tax, excluding the one-off gain from the sale of its stake in Aer Lingus, came in at €1.09bn from €795m in the same period last year, on revenue of €4.04b, up 14%.

Chief executive officer Michael O’Leary said: “We are pleased to report this strong set of H1 results. We have enjoyed a bumper summer due to a very rare confluence of favourable events including stronger sterling, adverse weather in northern Europe, reasonably flat industry capacity and further savings on our unhedged fuel, as millions of customers switched to Ryanair for our Always Getting Better customer experience programme.”

Traffic rose 13% to 58m in the period, with the load factor up 4 points to 93% and average fares 2% higher at €56.

In addition, the budget carrier said it has taken advantage of occasional oil price weakness this summer to further extend its fuel hedges to 95% cover for full-year 2017 at an average rate of $62 per barrel. It expects these hedges to deliver fuel savings of some €430m in 2017.

Ryanair lifted its traffic target for next year to 105m customers from 104m due to higher load factors in the second half, and said it now expects full-year net profit, pre-exceptions, to be towards the upper end of its €1.18bn to €1.23bn range.

However, it cautioned that this guidance is heavily dependent on the strength of close-in bookings in the fourth quarter where it has almost zero visibility but is planning to deliver 22% traffic growth.

Looking beyond the current year, it raised its long-term traffic target from 160m to 180m customers per annum by full-year 2024.

On the downside, though, Ryanair said it expects ticket prices to be broadly flat this quarter as forward pricing has softened in recent weeks. Fourth-quarter fares are likely to fall by around 4%, the airline said.

“This is a strong 1H update, although the weaker recent pricing may cause some concern,” said Nomura, which rates the stock at ‘buy’.

At 0911 GMT, Ryanair shares were down 0.9% at €13.37.