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Ryanair shares rise amid strong FY profit rise, cautious outlook

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Ryanair shares are trading higher Monday after the Irish budget airline reported a 10% increase in profits after tax in the full year to the end of March 2018. However, while Michael O’Leary is still expecting more passengers to use his airline this year, he’s also anticipating higher costs, too.

By 1050 BST, Ryanair shares were 2.91% higher at €15.93. The stock has been moving lower recently after hitting close to €16 earlier in the month.

Upbeat earnings for Ryanair

Ryanair’s Full Year profits rose 10% to €1.45 billion from €1.32 billion a year earlier. Passenger numbers rose 9% to 130.3 billion and revenues grew 8% to €7.2 billion. All this helped lift earnings per share 15% to €1.22.

Those gains came despite widespread strike action towards the end of 2017 and early in 2018 and also cancellations following difficulties with their pilot scheduling during 2017.

“We are pleased to report a 10% increase in profits, with an unchanged net margin of 20%, despite a 3% cut in air fares, during a year of overcapacity in Europe, leading to a weaker fare environment, rising fuel prices, and the recovery from our Sept. 2017 rostering management failure,” said Ryanair CEO O’Leary.

Cautious outlook

However, despite the positive year, the budget airline is less sanguine about its 2018-19 performance. And that’s largely due to expected higher costs for the business.

O’Leary said that while he anticipates passenger growth of some 7% in this full year period, costs are expected to rise by 9%. That’s mainly due to higher staff costs and also, higher oil prices. Indeed, the Irish airline calculates its fuel bill will rise €400 million.

“Our Outlook for FY19 is on the pessimistic side of cautious,” Ryanair said. “While still too early to accurately forecast close-in summer bookings or H2 fares, we are cautiously guiding broadly flat average fares for FY19.”

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