18th Oct 2016 06:19
LONDON (Alliance News) - Ryanair Holdings PLC on Tuesday lowered its full-year profit guidance on the weakening of the pound since the UK's vote to leave the European Union.
The Irish low-cost airline said it now expects net profit in its financial 2017 year to be between EUR1.30 billion and EUR1.35 billion, having previously guided a range of EUR1.38 billion to EUR1.43 billion. The new guidance represents a 7% increase on the prior year's net profit.
Ryanair's financial year ends on March 31, 2017.
Ryanair said the reduced guidance is a result of sterling's decline against other currencies since the Brexit vote, which will reduce average second-half fares by between 13% and 15%. It had previously expected average fares to fall by between 10% and 12%. Sterling-based revenue accounts for around 26% of Ryanair's overall revenue.
The airline added that first-half fares were down by 10%, compared to its forecast of 9%, but noted that this will be offset by a better-than-expected cost performance. It now expects full-year unit costs excluding fuel to decline by 3%, having previously guided a 1% fall.
In addition, Ryanair expects full-year load factor to be one percentage point better than guided at 94%, while traffic should increase to 119 million customers, which is up 12% on the prior year's 106 million.
"We would caution that this revised guidance remains heavily dependent upon no further weakness in second-half fares or sterling from its current levels," Chief Executive Michael O'Leary said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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