TIDMRYA
RNS Number : 3593G
Ryanair Holdings PLC
26 July 2021
RYANAIR REPORTS Q1 LOSS OF EUR273M AS EASTER TRAVEL
CANCELLED
VACCINE ROLLOUTS & EU DIGITAL COVID CERTS
DRIVE STRONG BOOKING RECOVERY INTO PEAK SUMMER 2021
Ryanair Holdings plc today (26 July) reported a Q1 loss of
EUR273m, compared to a PY Q1 loss of EUR185m. Features of this Q1
performance included:
-- Q1 traffic rebounded from 0.5m to 8.1m as capacity recovered in May & June.
-- 1(st) B737-8200 "Gamechanger" delivered in June (12 for peak S.21).
-- Strong June cash balance of EUR4.06bn (up from EUR3.15bn at 31 Mar.).
-- EUR1.2bn 5-year unsecured bond issued in May at record low 0.875% coupon.
-- Net debt fell from EUR2.28bn at 31 Mar. to EUR1.66bn at 30
June (EUR850m bond repaid in June).
-- 379 new routes & 10 new bases announced for 2021.
-- Customer Advisory Panel appointed - 1(st) meeting in Sept.
Q1 - Group 30 Jun. 2020 30 Jun. 2021 Change
Customers 0.5m 8.1m +7.6m
------------- ------------- -------
Load Factor 61% 73% +12pts
------------- ------------- -------
Revenue EUR125m EUR371m +196%
------------- ------------- -------
Op. Costs EUR313m EUR675m +116%
------------- ------------- -------
Net Loss (EUR185m) (EUR273m) -47%
------------- ------------- -------
Ryanair Holdings Group CEO, Michael O'Leary, said:
" COVID-19:
Covid-19 continued to wreak havoc on our business during Q1 with
most Easter flights cancelled and a slower than expected easing of
EU Govt. travel restrictions into May and June. Significant
uncertainty around travel green lists (particularly in the UK) and
extreme Govt. caution in Ireland meant that Q1 bookings were
close-in and at low fares. We kept aircraft and crews current
throughout the quarter and recruited additional cabin crew to
enable us recover quickly in Q2 as Covid restrictions ease. The
1(st) July rollout of EU Digital Covid Certificates ("DCC") and the
scrapping of quarantine for vaccinated arrivals to the UK from
mid-July has seen a surge in bookings over recent weeks. Pricing
remains below pre Covid-19 levels and there will continue to be
great value for Ryanair guests travelling this summer as we focus
on recovering traffic, jobs and tourism across our European
network. Based on current (close-in) bookings, we expect traffic to
rise from over 5m in June to almost 9m in July, and over 10m in
Aug., as long as there are no further Covid setbacks in Europe. We
will continue our load active/yield passive strategy as we recover
load factors over the course of FY22.
The Covid-19 crisis has triggered the collapse of many European
airlines including Flybe, Norwegian, Germanwings, Level and Stobart
and led to substantial capacity cuts at many others including
Alitalia, TAP, LOT, SAS, etc. The tsunami of State Aid from EU
Govts. to their insolvent flag carriers (Alitalia, AirFrance/KLM,
LOT, Lufthansa, SAS, TAP and others) will distort EU competition
and prop up high cost, inefficient, flag carriers for many years.
We expect intra-European capacity to be materially lower for the
foreseeable future. This will create growth opportunities for
Ryanair to extend airport incentives, as the Group takes delivery
of 210 new Boeing 737 "Gamechanger" aircraft. We are encouraged by
the high rate of vaccinations across Europe. If, as is presently
predicted, most of Europe's adult population is fully vaccinated by
Sept., then we believe that we can look forward to a strong
recovery in air travel for the second half of the fiscal year and
well into S.22 - as is presently the case in domestic US air
travel.
THE ENVIRONMENT & CUSTOMER SERVICE:
Ryanair has repeatedly shown we can grow traffic while reducing
our impact on the environment. Every passenger that switches to
Ryanair from Europe's legacy airlines reduces their CO emissions by
almost 50% per flight. Over the next 5-years our traffic will grow
to 200m p.a. This will be achieved on a fleet that balances the
demand for low fares with the need for sustainable flying. Our new
B737-8200 "Gamechanger" aircraft (a $22bn+ investment) offers 4%
more seats, but delivers 16% lower fuel burn and 40% lower noise
emissions, helps to meaningfully lower Ryanair's CO and noise
footprint over the next decade.
We continue to work actively with the EU, fuel suppliers and
aircraft manufacturers to incentivise sustainable aviation fuel
(SAF) use. We are working with A4E and the EU Commission to
accelerate reform to the Single European Sky, to minimise ATC
delays and lower fuel consumption and CO emissions. Last year
Ryanair received an industry leading "B-" climate protection rating
from CDP [1] , and we are working to improve this to an "A" rating
over the next 2 years. In April, Ryanair established a Sustainable
Aviation Research Centre partnership with Trinity College Dublin to
accelerate the development of SAFs. Ryanair's goal is to power
12.5% of our flights with SAF by 2030 (well ahead of the 5%
recently mandated by the EU Fit for 55 Proposals). Earlier this
month we launched a new carbon calculator enabling customers to
(voluntarily) offset their carbon footprint on every Ryanair flight
that they book. These initiatives will help Ryanair achieve our
target of lowering CO per passenger/km by 10% to just 60 grams by
2030.
In July, Ryanair announced a 7 member Customer Advisory Panel.
Following over 10,000 applications from across 16 countries, the
final panel represents a diverse cross-section of Ryanair customers
(with members from Germany, Ireland, Italy, Poland, Spain and the
UK). We will welcome this Panel to Dublin in Sept. for our first
Customer Advisory meeting, with future meetings to take place in
other major European cities. The advice and input from the Panel
will help shape Ryanair's continuing customer improvements
programme, re-enforcing our commitment to delivering the lowest
fares, on-time flights and a great customer experience as the Group
returns to strong post Covid growth.
Q1 FY22 BUSINESS REVIEW:
Revenue & Costs
Q1 scheduled revenue increased 91% to EUR192m due to a rise in
traffic from 0.5m to 8.1m (at a 73% load factor). While traffic
recovered significantly (compared to PY Q1), the cancellation of
Easter traffic and the delayed relaxation of Govt. travel
restrictions across the EU into May and June required significant
price stimulation. Ancillary revenue performed well, generating
approx. EUR22 per passenger, as more guests choose priority
boarding and reserved seating. As a result, total revenue increased
by almost 200% to over EUR370m in Q1. A sevenfold increase in
sectors saw operating costs increase 116% to EUR675m, driven
primarily by variable costs such as fuel, airport & handling
and route charges. The Group's fuel requirements are just under 60%
hedged for FY22 at $565 per metric tonne and approx. 35% hedged for
FY23 at $600. Carbon credits are fully hedged for FY22 and approx.
35% hedged for FY23 at under EUR24 per EUA (compared to forward
rates of over EUR50).
During Q1 our Route Development team continued their work with
airport partners across Europe, and have negotiated lower airport
costs, recovery incentives and the extension of many low cost
airport growth deals. In addition to previously announced deals
(with Billund, Riga, Stockholm, Zadar & Zagreb) and long term
extensions of low-cost growth deals in London Stansted (to 2028),
Milan Bergamo (to 2028) and Brussels Charleroi (to 2030), the Group
has doubled its capacity in Rome (Fiumicino), added new routes to
Helsinki and will launch new bases in Turin (Italy) and Agadir
(Morocco) this winter.
In June Ryanair took delivery of our first 3 B737-8200
"Gamechanger" aircraft from our 210 orderbook. The Gamechangers
have 4% more seats, 16% lower fuel burn and 40% lower noise
emissions and will, we believe, further widen the cost gap between
Ryanair and all other European airlines for the next decade. While
it is early days (and load factors have not yet recovered to pre
Covid levels) we are very pleased with the operational performance
and lower fuel burn recorded on these aircraft. The feedback from
our guests is resoundingly positive as they enjoy the extra leg
room and 40% less noise. We hope to increase our fleet of
Gamechangers to over 60 in advance of S.22 and these new aircraft
will drive our traffic growth to 200m p.a. by FY26.
Balance Sheet & Liquidity
Ryanair's balance sheet is one of the strongest in the industry
with a BBB credit rating (S&P and Fitch), EUR4.06bn cash and
almost 90% of our B737 fleet unencumbered at quarter end. In May
Ryanair issued a EUR1.2bn 5-year, unsecured, bond at a record low
coupon of 0.875%. In June the Group repaid its maturing EUR850m
(2014) 1.875% bond. Strong operating cashflows and supplier
reimbursements drove a EUR0.62bn reduction in net debt to EUR1.66bn
at 30 June (31 March: EUR2.28bn). This balance sheet strength
enables the Group to capitalise on the many growth opportunities
that will be available in Europe in the post Covid-19 recovery.
OUTLOOK:
FY22 continues to be challenging, with Covid-19 travel
restrictions prolonging uncertainty. Following the 1(st) July
rollout of EU DCC's (and the relaxation of the UK's quarantine
rules) for fully vaccinated persons, our Group has seen Q2 bookings
recover strongly (albeit at low fares). With the booking curve
remaining very close-in and fares well below pre Covid-19 levels,
visibility for the remainder of FY22 is close to zero. It therefore
remains impossible to provide meaningful FY22 guidance at this
time. We believe that FY22 traffic has improved to a range of 90m
to 100m (previously guided at the lower end of an 80m to 120m
passenger range) and (cautiously) expect that the likely outcome
for FY22 is somewhere between a small loss and breakeven. This is
dependent on the continued rollout of vaccines this summer, and no
adverse Covid variant developments.
As we look beyond the Covid-19 recovery, and the successful
completion of vaccination rollouts, the Ryanair Group expects to
have a materially lower cost base, a very strong balance sheet and
industry leading traffic recovery. Our new B737 "Gamechanger"
aircraft will reduce fleet costs and unit costs (thanks to its
attractive pricing, higher seat density and 16% lower fuel burn)
for the next decade. They will enhance revenue opportunities with
4% more seats, enabling the Group to fund lower fares and
capitalise on the many growth opportunities that are now available
across Europe, especially where competitor airlines have
substantially cut capacity or failed. We are seeing a strong
rebound of pent up travel demand into Aug. & Sept. and we
expect this to continue into the second half of FY22, with pre
Covid-19 growth planned to resume strongly in summer 2022."
S
For further information Neil Sorahan Piaras Kelly
please contact: Ryanair Holdings plc Edelman
www.ryanair.com Tel: +353-1-9451212 Tel: +353-1-6789333
Certain of the information included in this release is forward
looking and is subject to important risks and uncertainties that
could cause actual results to differ materially. It is not
reasonably possible to itemise all of the many factors and specific
events that could affect the outlook and results of an airline
operating in the European economy. Among the factors that are
subject to change and could significantly impact Ryanair's expected
results are the airline pricing environment, fuel costs,
competition from new and existing carriers, market prices for the
replacement of aircraft, costs associated with environmental,
safety and security measures, actions of the Irish, U.K., European
Union ("EU") and other governments and their respective regulatory
agencies, post-Brexit uncertainties, weather related disruptions,
ATC strikes and staffing related disruptions, delays in the
delivery of contracted aircraft, fluctuations in currency exchange
rates and interest rates, airport access and charges, labour
relations, the economic environment of the airline industry, the
general economic environment in Ireland, the UK and Continental
Europe, the general willingness of passengers to travel and other
economics, social and political factors, global pandemics such as
Covid-19 and unforeseen security events.
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Balance Sheet as at June 30, 2021
(unaudited)
At Jun 30, At Mar 31,
2021 2021
Note EURM EURM
Non-current assets
Property, plant and equipment 10 8,397.7 8,361.1
Right-of-use asset 174.3 188.2
Intangible assets 146.4 146.4
Derivative financial instruments 11 106.9 111.3
Deferred tax 19.1 14.0
Other assets 48.7 48.7
----------- -----------
Total non-current assets 8,893.1 8,869.7
----------- -----------
Current assets
Inventories 3.8 3.6
Other assets 256.7 179.8
Trade receivables 22.3 18.6
Derivative financial instruments 11 164.0 106.0
----------- -----------
Restricted cash 34.1 34.1
Financial assets: cash > 3 months 470.3 465.5
Cash and cash equivalents 3,551.9 2,650.7
----------- -----------
Total current assets 4,503.1 3,458.3
----------- -----------
Total assets 13,396.2 12,328.0
----------- -----------
Current liabilities
Provisions - 10.3
Trade payables 565.8 336.0
Accrued expenses and other liabilities 2,062.3 1,274.9
Current lease liability 52.0 52.5
Current maturities of debt 863.1 1,725.9
Derivative financial instruments 11 43.1 79.2
Current tax 52.0 48.1
----------- -----------
Total current liabilities 3,638.3 3,526.9
----------- -----------
Non-current liabilities
Provisions 58.8 47.4
Trade payables 188.1 179.9
Derivative financial instruments 11 3.7 6.4
Deferred income tax liability 235.5 272.4
Non-current lease liability 115.8 130.6
Non-current maturities of debt 4,686.8 3,517.8
----------- -----------
Total non-current liabilities 5,288.7 4,154.5
----------- -----------
Shareholders' equity
Issued share capital 12 6.7 6.7
Share premium account 12 1,164.8 1,161.6
Other undenominated capital 12 3.5 3.5
Retained earnings 12 2,959.7 3,232.3
Other reserves 334.5 242.5
----------- -----------
Shareholders' equity 4,469.2 4,646.6
----------- -----------
Total liabilities and shareholders'
equity 13,396.2 12,328.0
----------- -----------
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Income Statement for Quarter
Ended June 30, 2021 (unaudited)
IFRS IFRS
Quarter Quarter
Ended Ended
June 30, June 30,
2021 2020
Change
Note %* EURM EURM
Operating revenues
Scheduled revenues 191.9 100.7
Ancillary revenues 178.6 24.5
Total operating revenues 196% 370.5 125.2
Operating expenses
Depreciation 134.3 134.0
Fuel and oil 156.6 8.9
Staff costs 111.0 68.5
Airport and handling charges 87.1 18.1
Maintenance, materials and repairs 61.8 36.2
Marketing, distribution and
other 71.9 42.4
Route charges 52.3 2.3
Aircraft rentals 0.0 2.4
Total operating expenses (116%) 675.0 312.8
Operating (loss) (62%) (304.5) (187.6)
Other income/(expenses)
Net finance expense (21.4) (9.4)
Foreign exchange / hedge Ineffectiveness 1.4 (13.0)
Total other income/(expenses) 11% (20.0) (22.4)
(Loss) before tax (55%) (324.5) (210.0)
Tax credit on (loss) 4 51.9 24.9
---------- --------------
(Loss) for the quarter - attributable
to equity holders of parent (47%) (272.6) (185.1)
========== ==============
(Loss) per ordinary share (EUR) 9 (0.2416) (0.1699)
Basic 9 (0.2416) (0.1699)
Diluted
Weighted ave. no. of ord. shares
(in Ms) 9 1,128.3 1,089.4
Basic 9 1,128.3 1,089.4
Diluted
---------- --------------
*"+" is favourable and "-" is adverse year-on-year.
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Statement of Comprehensive Income
for Quarter Ended June 30, 2021 (unaudited)
Quarter Quarter
Ended Ended
June 30, June 30,
2021 2020
EURM EURM
(Loss) for the quarter (272.6) (185.1)
--------- ---------
Other comprehensive income:
Items that are or may be reclassified to profit or
loss:
Cash flow hedge reserve movements:
Net movement in cash flow hedge reserve 89.6 (69.9)
--------- ---------
Other comprehensive profit/(loss) for the quarter,
net of income tax credit/charge 89.6 (69.9)
--------- ---------
Total comprehensive (loss) for the quarter - attributable
to equity holders of parent (183.0) (255.0)
--------- ---------
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Statement of Cash Flows for
Quarter Ended June 30, 2021 (unaudited)
Quarter Quarter
Ended Ended
June 30, June 30,
2021 2020
Restated*
Note EURM EURM
Operating activities
(Loss) after tax (272.6) (185.1)
Adjustments to reconcile profit after tax to
net cash provided by operating activities
Tax credit on loss on ordinary activities (51.9) (24.9)
Hedge ineffectiveness/foreign exchange 9.1 (296.6)
Increase/(decrease) in net finance expense 0.9 (3.3)
Depreciation 134.3 134.0
Share based payments 2.4 1.0
(Increase)/decrease in inventories (0.2) 0.3
(Increase)/decrease in trade receivables (3.7) 30.1
(Increase)/decrease in other assets (77.2) 89.7
Increase/(decrease) in trade payables 1 63.1 (134.0)
Increase/(decrease) in accrued expenses 788.8 (67.3)
Increase in provisions 1.0 6.5
Income tax refunded/(paid) 0.2 (0.7)
Net cash provided by/(used in) operating activities 594.2 (450.3)
--------- -----------
Investing activities
Capital expenditure - purchase of property,
plant and equipment 10 (82.0) (34.3)
Supplier reimbursements 10 113.9 -
Decrease in restricted cash - 0.3
(Increase)/decrease in financial assets: cash
> 3 months (4.8) 112.1
Net cash provided by/(used in) investing activities 27.1 78.1
--------- -----------
Financing activities
Net proceeds from shares issued 3.2 5.8
Finance raised 1,192.0 690.0
Repayments of long term borrowings (896.3) (68.0)
Lease liabilities paid (14.6) (20.5)
Net cash provided by/(used in) financing activities 284.3 607.3
--------- -----------
Increase in cash and cash equivalents 905.6 235.1
Net foreign exchange differences (4.4) 5.3
--------- -----------
Cash and cash equivalents at beginning of
the year 2,650.7 2,566.4
--------- -----------
Cash and cash equivalents at end of the quarter 3,551.9 2,806.8
--------- -----------
*Includes reclassification between trade payables and capital
expenditure. See note 1 for further detail.
Ryanair Holdings plc and Subsidiaries
Condensed Consolidated Interim Statement of Changes in
Shareholders' Equity for Quarter Ended June 30, 2021
(unaudited)
Issued Share Other Other
Ordinary Share Premium Undenom. Retained Reserves Other
Shares Capital Account Capital Earnings Hedging Reserves Total
M EURM EURM EURM EURM EURM EURM EURM
Balance at March 31, 2020 1,089.2 6.5 738.5 3.5 4,245.0 (111.3) 32.3 4,914.5
Adjustment on initial - - - - - - - -
application
of IFRS 16
Adj. balance at April 01,
2020 1,089.2 6.5 738.5 3.5 4,245.0 (111.3) 32.3 4,914.5
-------- -------- --------- ---------- ----------
Loss for the year - - - - (1,015.1) - - (1,015.1)
Other comprehensive income
Net movements in cash-flow
reserve - - - - - 322.6 - 322.6
Total other comprehensive
income - - - - - 322.6 - 322.6
-------- -------- --------- ---------- ----------
Total comprehensive income - - - - (1,015.1) 322.6 - (692.5)
Transactions with owners - - - - - - - -
of the
--------- -------- -------- --------- ---------- --------- --------- ----------
Company recognised directly
in equity
--------- -------- -------- --------- ---------- --------- --------- ----------
Issue of ordinary equity
shares 38.9 0.2 423.1 - (2.3) - - 421.0
Share-based payments - - - - - - 3.6 3.6
Repurchase of ordinary - - - - - - - -
equity shares
Other - - - - - - - -
Cancellation of repurchased - - - - - - - -
ordinary shares
Transfer of exercised and
share based awards - - - - 4.7 - (4.7) -
Balance at March 31, 2021 1,128.1 6.7 1,161.6 3.5 3,232.3 211.3 31.2 4,646.6
-------- -------- --------- ---------- ----------
Loss for the quarter - - - - (272.6) - - (272.6)
Other comprehensive income - - - - - - - -
Net movements in cash flow
reserve - - - - - 89.6 - 89.6
Total other comprehensive
income - - - - - 89.6 - 89.6
-------- -------- --------- ---------- ----------
Total comprehensive income - - - - (272.6) 89.6 - (183.0)
Transactions with owners - - - - - - - -
of the
--------- -------- -------- --------- ---------- --------- --------- ----------
Company recognised directly
in equity
--------- -------- -------- --------- ---------- --------- --------- ----------
Issue of ordinary equity
shares 0.5 - 3.2 - - - - 3.2
Share-based payments - - - - - - 2.4 2.4
Transfer of exercised and - - - - - - - -
expired share based awards
Balance at June 30, 2021 1,128.6 6.7 1,164.8 3.5 2,959.7 300.9 33.6 4,469.2
-------- -------- --------- ---------- ----------
Ryanair Holdings plc and Subsidiaries
MD&A Quarter Ended June 30, 2021
Introduction
The Ryanair Group's fleet was effectively grounded due to
European Governments travel restrictions/ lockdowns during the
prior year comparative (quarter ended June 30, 2020). Sectors (up
sevenfold) and traffic (+7.6M) are therefore significantly higher
in the quarter ended June 30, 2021 (although still below pre
Covid-19 levels) and the following discussion should be read in
that context.
Income Statement
Scheduled revenues:
Scheduled revenues increased 91% to EUR192M due to a 7.6M
increase in traffic, from 0.5M to 8.1M. While traffic increased
significantly, the cancellation of most Easter flights and the
delayed relaxation of Government travel restrictions across the EU
and the UK into May and June meant that fares required significant
price stimulation.
Ancillary revenues:
Ancillary revenues increased to EUR179M due to a 7.6M rebound in
traffic and a solid performance in priority boarding and reserved
seating.
Total revenues:
As a result of the above, total revenues increased 196% to
EUR371M.
Operating Expenses:
Depreciation:
Depreciation was flat at EUR134M primarily due to the sale of 7
older B737 aircraft and 11 B737 lease handbacks over the past year,
offset by the delivery of 3 B737-8200 ("Gamechanger") aircraft in
June and increased amortisation as schedules and cycles
increased.
Fuel and oil:
Fuel and oil increased by EUR148M to EUR157M due to a sevenfold
increase in sectors flown.
Staff costs:
Staff costs increased by EUR43M to EUR111M due to significantly
higher sectors.
Airport and handling charges:
Airport and handling charges rose by EUR69M to EUR87M due to
increased sectors and passengers, offset by reduced charges.
Maintenance, materials and repairs:
Maintenance, materials and repairs increased by EUR26M to EUR62M
due to higher aircraft utilisation.
Marketing, distribution and other:
Marketing, distribution and other increased by EUR30M to EUR72M
due to higher activity and reduced discretionary spending across
the Group.
Route charges:
Route charges increased by EUR50M to EUR52M due to significantly
higher sectors.
Aircraft rentals:
Aircraft rentals dropped to zero due to no longer having B737
aircraft on lease.
Other expense:
The absence of hedge ineffectiveness in the quarter was offset
by a EUR12M increase in finance expenses due to higher gross debt
and negative average interest rates on euro deposits.
Balance sheet
Gross cash increased by EUR906M to EUR4,056M at June 30,
2021.
Gross debt increased by EUR291M to EUR5,718M, primarily due to a
EUR1,200M Eurobond issuance in May 2021 offset by a EUR850M (2014)
Eurobond maturity repayment in June 2021 in addition to EUR61M
secured debt and lease liability payments in the quarter.
Net debt was EUR1,661M at June 30, 2021. This is a EUR615M
reduction from EUR2,277M at March 31, 2021.
Shareholders' equity:
Shareholders' equity decreased by EUR177M to EUR4,469M in the
quarter primarily due to a EUR273M net loss.
Ryanair Holdings plc and Subsidiaries
Notes forming Part of the Condensed Consolidated
Interim Financial Statements
1. Basis of preparation and significant accounting policies
Ryanair Holdings plc (the "Company") is a company domiciled in
Ireland. The unaudited condensed consolidated Interim financial
statements of the Company for the quarter ended June 30, 2021
comprise the Company and its subsidiaries (together referred to as
the "Group").
These unaudited condensed consolidated Interim financial
statements ("the Interim financial statements"), which should be
read in conjunction with our 2020 Annual Report, have been prepared
to include information equivalent to that required for condensed
interim financial statements in accordance with International
Accounting Standard No. 34 "Interim Financial Reporting" as adopted
by the EU ("IAS 34"). They do not include all of the information
required for full annual financial statements and should be read in
conjunction with the most recent published consolidated financial
statements of the Group. The consolidated financial statements of
the Group as at year ended March 31, 2020, are available at
http://investor.ryanair.com/.
The June 30, 2021 figures and the June 30, 2020 comparative
figures do not constitute statutory financial statements of the
Group within the meaning of the Companies Act, 2014. The
consolidated financial statements of the Group for the year ended
March 31, 2020, together with the independent auditor's report
thereon, were filed with the Irish Registrar of Companies following
the Company's Annual General Meeting and are also available on the
Company's Website. The auditor's report on those financial
statements was unqualified.
The Audit Committee, upon delegation of authority by the Board
of Directors, approved the condensed consolidated Interim financial
statements for the quarter ended June 30, 2021 on July 23,
2021.
Except as stated otherwise below, this year's financial
information has been prepared in accordance with the accounting
policies set out in the Group's most recent published consolidated
financial statements, which were prepared in accordance with IFRS
as adopted by the EU and also in compliance with IFRS as issued by
the International Accounting Standards Board (IASB).
New IFRS standards and amendments adopted during the year
The following new and amended IFRS standards, amendments and
IFRIC interpretations, have been issued by the IASB, and have also
been endorsed by the EU. These standards are effective for the
first time for the Group's financial year beginning on April 1,
2021 and therefore have been applied by the Group in these
condensed consolidated Interim financial statements:
-- Amendments to IFRS 4 Insurance Contracts - deferral of IFRS
19 (effective for fiscal periods beginning on or after January 1,
2021).
-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
Interest Rate Benchmark Reform - Phase 2 (effective for fiscal
periods beginning on or after January 1, 2021).
-- Amendment to IFRS 16 Leases - Covid-19 Related Rent
Concessions Beyond June 30, 2021 (effective for fiscal periods
beginning on or after April 1, 2021).*
The adoption of these new or amended standards as listed above
did not have a material impact on the Group's financial position or
results from operations in the quarter ended June 30, 2021.
New IFRS standards and amendments issued but not yet
effective
The following new or revised IFRS standards and IFRIC
interpretations will be adopted for the purposes of the preparation
of future financial statements, where applicable. While under
review, we do not anticipate that the adoption of the other new or
revised standards and interpretations will have a material impact
on our financial position or results from operations:
-- Amendments to IFRS 3 Business Combinations; IAS 16 Property,
Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and
Contingent Assets; and Annual Improvements 2018-2020 (effective for
fiscal periods beginning on or after January 1, 2022).
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments
to IAS 37) (effective for periods beginning on or after January 1,
2022).
-- Property, Plant and Equipment: Proceeds before Intended Use
(Amendments to IAS 16) (effective for periods beginning on or after
January 1, 2022).
-- Reference to the Conceptual Framework (Amendments to IFRS 3)
(effective for periods beginning on or after January 1, 2022).
-- Amendments to IAS 12 Income Taxes: Deferred Tax related to
Assets and Liabilities arising from a Single Transaction (effective
for fiscal periods beginning on or after January 1, 2023).*
-- Amendments to IAS 8 Accounting policies, Changes in
Accounting Estimates and Errors: Definition of Accounting Estimates
(effective for fiscal periods beginning on or after January 1,
2023).*
-- Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting policies
(effective for fiscal periods beginning on or after January 1,
2023).*
-- Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current and
Classification of Liabilities as Current or Non-current (effective
for fiscal periods beginning on or after January 1, 2023).*
-- IFRS 17 Insurance Contracts (effective for fiscal periods
beginning on or after January 1, 2023).*
* These standards or amendments to standards are not as of yet
EU endorsed.
Statement of Cash Flows restatement
Operating cash inflows and investing cash outflows for the
quarter ended June 30, 2020 have been reclassified. They both have
been reduced by approximately EUR103M to address accrued supplier
payables which had previously been presented as a capital
expenditure cash outflow in investing activities and as a movement
in working capital in operating activities. As no actual cash flows
arose and the payable is not working capital related, both line
items required adjustments. There is no impact on the Group's net
cash flows, consolidated balance sheet, consolidated income and
basic and diluted earnings per share for the quarter ended.
2. Judgements and estimates
The preparation of financial statements requires management to
make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expense. Actual results may
differ from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements and key sources of
estimation uncertainty were the same as those that applied in the
most recent published consolidated financial statements.
Derivative financial instruments
The Group uses various derivative financial instruments to
manage its exposure to market risks, including the risks relating
to fluctuations in commodity prices and currency exchange rates.
Ryanair uses forward contracts for the purchase of its jet fuel
requirements to reduce its exposure to commodity price risk. It
also uses foreign currency forward contracts to reduce its exposure
to risks related to foreign currencies, principally the U.S. dollar
exposure associated with the purchase of new Boeing 737-8200
aircraft and the U.S. dollar exposure associated with the purchase
of jet fuel.
The Group recognises all derivative instruments as either assets
or liabilities in its consolidated balance sheet and measures them
at fair value.
3. Seasonality of operations
The Group's results of operations have varied significantly from
quarter to quarter, and management expects these variations to
continue. Among the factors causing these variations are the
airline industry's sensitivity to general economic conditions and
the seasonal nature of air travel. Accordingly, the first half-year
typically results in higher revenues and results.
4. Income tax expense
The Group's consolidated effective tax rate in respect of
operations for the quarter ended June 30, 2021 was a credit of
16.0% (June 30, 2020: 11.9%). The Group's accounting tax credit for
the quarter ended June 30, 2021 of approximately EUR52M (June 30,
2020: EUR25M); comprising of a deferred tax credit of EUR56M
primarily relating to net operating losses and the temporary
differences for property, plant and equipment, offset by a Group
current tax charge of approximately EUR4M.
5. Share based payments
The terms and conditions of the Group's share-based remuneration
programmes are disclosed in the most recent, published,
consolidated financial statements. The charge of EUR2.4M in the
quarter ended June 30, 2021 (June 30, 2020: EUR1.0M) is the fair
value of share options granted in prior periods and a conditional
share grant under LTIP 2019, in the current quarter, to over 80
managers across the Group (the Executive and Non-Executive
Directors were not included in this LTIP 2019 grant). The charge is
recognised within the income statement in accordance with employee
services rendered. During the quarter ended June 30, 2021, 0.5M
ordinary shares were issued at strike prices between EUR6.25 and
EUR6.74 per share following the exercise of vested share
options.
6. Contingencies
The Group is engaged in litigation arising in the ordinary
course of its business. The Group does not believe that any such
litigation will individually, or in aggregate, have a material
adverse effect on the financial condition of the Group. Should the
Group be unsuccessful in these litigation actions, management
believes the possible liabilities then arising cannot be determined
but are not expected to materially adversely affect the Group's
results of operations or financial position.
7. Capital commitments
As of June 30, 2021, the Ryanair Group had a fleet of 422 owned
Boeing 737s, including 3 "Gamechanger" B737-8200s. In addition, the
Group had 29 leased Airbus A320 aircraft. In September 2014, the
Group agreed to purchase up to 200 (100 firm and 100 options)
Boeing 737-8200 aircraft, subsequently increased to 210 (135 firm
and 75 options). In December 2020, the Group increased its firm
orders from 135 to 210 Boeing 737-8200 aircraft and in June 2021,
the Group took delivery of the first of these aircraft. The
remaining aircraft are due to deliver before the end of fiscal year
2025.
8. Analysis of operating segment
The Group determines and presents operating segments based on
the information that internally is provided to the Group CEO, who
is the Company's Chief Operating Decision Maker (CODM).
The CODM assesses the performance of the business based on the
profit/(loss) after tax of each airline for the reporting period.
Resource allocation decisions for all airlines are based on airline
performance for the relevant period, with the objective in making
these resource allocation decisions being to optimize consolidated
financial results.
Ryanair DAC and Malta Air are reportable segments for financial
reporting purposes. Buzz and Lauda do not exceed the quantitative
thresholds for reporting purposes and accordingly have been
presented on an aggregate basis in the table below.
Reportable segment information is presented as follows:
Ryanair Malta Air Other Airlines Elimination Total
DAC
Quarter Ended June 30, June 30, June 30, June 30, June 30,
2021 2021 2021 2021 2021
EURM EURM EURM EURM EURM
External revenue 364.1 - 6.4 - 370.5
Inter-segment
revenue 196.7 142.6 57.4 (396.7) -
--------- ---------- --------------- ------------ ---------
Segment revenue 560.8 142.6 63.8 (396.7) 370.5
--------- ---------- --------------- ------------ ---------
Segment (loss) (244.8) (2.7) (25.1) - (272.6)
--------- ---------- --------------- ------------ ---------
Other segment
information:
Depreciation 119.9 - 14.4 - 134.3
Additions 269.5 - 0.5 - 270.0
--------- ---------- --------------- ------------ ---------
Ryanair Malta Air Other Airlines Elimination Total
DAC
June 30, June 30, June 30, June 30, June 30,
2021 2021 2021 2021 2021
EURM EURM EURM EURM EURM
Segment assets 12,961.8 91.3 343.1 - 13,396.2
Segment liabilities 8,069.7 115.6 741.7 - 8,927.0
Ryanair
DAC Malta Air Other Airlines Elimination Total
June 30, June 30 June 30, June 30, June 30,
2020 2020 2020 2020 2020
EURM EURM EURM EURM EURM
External revenue 121.3 - 3.9 - 125.2
Inter-segment
revenue 239.9 137.7 0.7 (378.3) -
--------- ---------- --------------- -------------- ---------
Segment revenue 361.2 137.7 4.6 (378.3) 125.2
--------- ---------- --------------- -------------- ---------
Segment (loss)/profit (127.0) 8.3 (66.4) - (185.1)
--------- ---------- --------------- -------------- ---------
Other segment
information:
Depreciation 117.4 - 16.6 - 134.0
Additions 137.4 - - - 137.4
--------- ---------- --------------- -------------- ---------
Ryanair
DAC Malta Air Other Airlines Elimination Total
June 30, June 30 June 30, June 30, June 30,
2020 2020 2020 2020 2020
EURM EURM EURM EURM EURM
Segment assets 14,048.7 164.3 380.8 - 14,593.8
Segment liabilities 9,035.2 158.6 733.7 - 9,927.5
9. Loss per share
Quarter Quarter
Ended Ended
June 30, June 30,
2021 2020
Basic (Loss) per ordinary share (EUR) (0.2416) (0.1699)
Diluted (Loss) per ordinary share (EUR) (0.2416) (0.1699)
Weighted average number of ordinary shares (in M's)
- basic 1,128.3 1,089.4
Weighted average number of ordinary shares (in M's)
- diluted 1,128.3 1,089.4
10. Property, plant and equipment
Acquisitions and disposals
Net capital additions for the quarter ended June 30, 2021
amounted to EUR157M, principally reflecting aircraft pre-delivery
deposits, and 3 aircraft deliveries offset by supplier
reimbursements of EUR114M.
11. Financial instruments and financial risk management
The Group is exposed to various financial risks arising in the
normal course of business. The Group's financial risk exposures are
predominantly related to commodity price, foreign exchange and
interest rate risks. The Group uses financial instruments to manage
exposures arising from these risks.
These Interim financial statements do not include all financial
risk management information and disclosures required in the annual
financial statements and should be read in conjunction with the
2020 Annual Report. There have been no changes in our risk
management policies in the period.
Fair value hierarchy
Financial instruments measured at fair value in the balance
sheet are categorised by the type of valuation method used. The
different valuation levels are defined as follows:
-- Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities that the Group can access at the
measurement date.
-- Level 2: inputs other than quoted prices included within
Level 1 that are observable for that asset or liability, either
directly or indirectly.
-- Level 3: significant unobservable inputs for the asset or liability.
Fair value estimation
Fair value is the price that would be received to sell an asset,
or paid to transfer a liability, in an orderly transaction between
market participants at the measurement date. The following methods
and assumptions were used to estimate the fair value of each
material class of the Group's financial instruments:
Financial instruments measured at fair value
-- Derivatives - interest rate swaps: Discounted cash flow
analyses have been used to determine the fair value, taking into
account current market inputs and rates. (Level 2)
-- Derivatives - currency forwards, aircraft fuel contracts and
EUA contracts: A comparison of the contracted rate to the market
rate for contracts providing a similar risk profile at June 30,
2021 has been used to establish fair value. (Level 2)
The Group policy is to recognise any transfers between levels of
the fair value hierarchy as of the end of the reporting period
during which the transfer occurred. During the quarter ended June
30, 2021, there were no reclassifications of financial instruments
and no transfers between levels of the fair value hierarchy used in
measuring the fair value of financial instruments.
Financial instruments not measured at fair value
-- Long-term debt: The repayments which the Group is committed
to make have been discounted at the relevant market rates of
interest applicable (including credit spreads) at June 30, 2021 to
arrive at a fair value representing the amount payable to a third
party to assume the obligations.
While there have been significant changes in business and
economic circumstances during the quarter ended June 30, 2021, the
future outlook for the business is such that there has been no
material change to the fair values of financial assets and
financial liabilities.
The fair value of financial assets and financial liabilities,
together with the carrying amounts in the condensed consolidated
financial balance sheet, are as follows:
11. Financial instruments and financial risk management (continued)
At June At June At Mar At Mar
30, 30, 31, 31,
2021 2021 2021 2021
Carrying Fair Carrying Fair
Amount Value Amount Value
--------- -------- --------- --------
Non-current financial assets EURM EURM EURM EURM
Derivative financial instruments:
- U.S. dollar currency forward contracts 96.3 96.3 109.4 109.4
- Jet fuel contracts 9.2 9.2 - -
- Interest rate swaps 1.4 1.4 1.9 1.9
--------- -------- --------- --------
106.9 106.9 111.3 111.3
Current financial assets
Derivative financial instruments:
- U.S. dollar currency forward contracts 76.9 76.9 99.5 99.5
- GBP currency swap 1.4 1.4 5.4 5.4
- Jet fuel contracts 84.8 84.8 - -
- Interest rate swaps 0.9 0.9 1.1 1.1
--------- -------- --------- --------
164.0 164.0 106.0 106.0
Trade receivables* 22.3 - 18.6 -
Cash and cash equivalents* 3,551.9 - 2,650.7 -
Financial asset: cash > 3 months* 470.3 - 465.5 -
Restricted cash* 34.1 - 34.1 -
--------- -------- --------- --------
4,242.6 164.0 3,274.9 106.0
--------- -------- --------- --------
Total financial assets 4,349.5 270.9 3,386.2 217.3
--------- -------- --------- --------
At June At June At Mar At Mar
30, 30, 31, 31,
2021 2021 2021 2021
Carrying Fair Carrying Fair
Non-current financial liabilities Amount Value Amount Value
--------- -------- --------- --------
Derivative financial instruments: EURM EURM EURM EURM
- U.S. dollar currency forward contracts 3.7 3.7 6.4 6.4
--------- -------- --------- --------
Long-term debt 1,053.1 1,061.3 1,077.5 1,083.2
Bonds 3,633.7 3,764.1 2,440.3 2,545.5
--------- -------- --------- --------
Trade payables 188.1 188.1 179.9 179.9
--------- -------- --------- --------
4,878.6 5,017.2 3,704.1 3,815.0
--------- -------- --------- --------
Current financial liabilities
Derivative financial instruments:
- Jet fuel & carbon derivative contracts 19.8 19.8
- U.S. dollar currency forward contracts 43.1 43.1 59.4 59.4
43.1 43.1 79.2 79.2
Current maturities of debt 863.1 863.1 875.1 875.1
Bonds - - 850.8 852.6
Trade payables* 565.8 - 336.0 -
Accrued expenses* 937.5 - 887.3 -
--------- -------- --------- --------
2,409.5 906.2 3,028.4 1,806.9
--------- -------- --------- --------
Total financial liabilities 7,288.1 5,923.4 6,732.5 5,621.9
========= ======== ========= ========
*The fair value of these financial instruments approximate their
carrying values due to the short-term nature of the
instruments.
11. Financial instruments and financial risk management (continued)
The Group issued senior, unsecured bonds with a fair value of
EUR1,200M in May 2021. The bond has a coupon of 0.875% and a
maturity date of June 2026. During the quarter the Group repaid the
maturing EUR850M (2014) Eurobond issued at a coupon of 1.875%.
12. Shareholders equity and shareholder returns
During the quarter ended June 30, 2021, 0.5M ordinary shares
were issued at strike prices between EUR6.25 and EUR6.74 per share
following the exercise of vested share options. There were no
shareholder returns during the quarter ended June 30, 2021 or in
the prior year comparative.
13. Related party transactions
The Company's related parties comprise its subsidiaries,
Directors and senior key management personnel. All transactions
with subsidiaries eliminate on consolidation and are not
disclosed.
There were no related party transactions in the quarter ended
June 30, 2021 that materially affected the financial position or
the performance of the Company during that period and there were no
changes in the related party transactions described in the 2020
Annual Report that could have a material effect on the financial
position or performance of the Company in the same period.
14. Government grants and assistance
During the quarter ended June 30, 2021, many European countries
in which the Ryanair Group operates made available payroll support
schemes. The Group utilised a number of these employment retention
schemes to protect jobs within the Group. These schemes were a mix
of short term Covid-19 specific programmes and long term schemes
linked to social security that existed pre Covid-19. The total
amount of payroll supports received by the Group under the various
schemes amounted to approximately EUR22M and are offset against
staff costs in the Consolidated Income Statement.
In April 2020, the Group raised GBP600M unsecured debt for
general corporate purposes under the HMT and Bank of England CCFF.
The 0.44% interest rate was the prevailing rate for strong BBB
rated companies . This debt was subsequently extended in March 2021
for a further 12 months at a 0.46% interest rate.
There are no unfulfilled conditions attaching to government
assistance at June 30, 2021.
15. Post balance sheet events
There were no significant post balance sheet events.
16. Going concern
The Board are satisfied that it remains appropriate to adopt the
going concern concept. In arriving at this decision, the Board
considered, among other things:
1. The Ryanair Group's liquidity with over EUR4bn cash at June
30, 2021, a EUR0.62bn reduction in net debt in the quarter and the
Group's continued focus on cash management;
2. The Group's solid BBB credit ratings (from both S&P and Fitch Ratings);
3. The Group's strong balance sheet with almost 90% of its B737 fleet unencumbered;
4. The Group's access to the debt capital markets. In May 2021,
the Group raised a EUR1.2bn, 5 year unsecured Eurobond at a low
coupon of 0.875%;
5. Ongoing cost reductions across the Group;
6. The widespread rollout of Covid-19 vaccines in Europe, with
it reported that the vast majority of the European adult population
will be vaccinated before the end of September 2021;
7. Increased bookings; and
8. The Group's flexibility to react quickly to improved customer
demand following vaccine rollouts, the launch of EU Digital Covid
Certificates, the relaxation of quarantine requirements for
vaccinated arrivals to the UK from mid-July, and the (expected)
further easing of European Governments travel
restrictions/lockdowns over the coming months.
[1] CDP - Carbon Disclosure Project is an independent, non-profit, global environmental reporting organisation.
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END
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July 26, 2021 02:00 ET (06:00 GMT)
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