Ryanair posts record annual profit, pessimistic on year ahead

Europe’s largest low-cost carrier booked a record €1.45 billion profit after tax in its financial year to March 31, up 10 percent year-on-year. (Reuters)
Updated 21 May 2018
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Ryanair posts record annual profit, pessimistic on year ahead

DUBLIN: Ryanair posted a record annual profit on Monday as it brushed off a rostering mess-up that forced it to cancel flights and sparked a dispute with pilots, but warned profits would fall back in the coming year due to higher costs and no fare growth.
Ryanair canceled 20,000 flights in September as an emergency measure to free up enough standby pilots to ensure the smooth operation of its fleet of 400 planes for the remainder of the year.
The cancelations sparked a wave of bad publicity and forced Ryanair to cut its growth plans for the first time in years. It has insisted this is a temporary measure and its long-term growth target remains intact.
Europe’s largest low-cost carrier booked a record €1.45 billion profit after tax in its financial year to March 31, up 10 percent year-on-year and slightly ahead of an average forecast of €1.44 billion in a company poll of analysts.
However, it said it expected to make a profit after tax of between €1.25 billion and €1.35 billion for the coming financial year, lower than the €1.37 billion expected on average by the analysts forecast.
While Ryanair expects to grow traffic by 7 percent to 139 million passengers, up on the 138 million last forecast, unit costs are expected to rise by 9 percent due to higher staff and oil prices with revenue from ancillary products unlikely to grow fast enough to fully offset this and broadly flat fares.
“Our outlook for FY19 is on the pessimistic side of cautious,” Chief Executive Michael O’Leary said in a statement.
“Forward bookings are strong but pricing remains soft. While still too early to accurately forecast close-in summer bookings or H2 fares, we are cautiously guiding broadly flat average fares for FY19,” O’Leary said.
The pessimistic tone was in contrast to rival EasyJet, Europe’s second-biggest low-cost airline, which said last week that it expects profits to rise more than 30 percent this year as it benefits from strong travel demand and the collapse of some smaller rivals.
The Irish carrier averted the threat of widespread Christmas strikes by unilaterally recognizing unions in December for the first time in its 32-year history, but it has struggled to formalize relations in some countries.
It has warned it may face some disruption to flights during the summer months.


Oil prices rise on signs Iranian oil exports are falling further

Updated 16 October 2018
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Oil prices rise on signs Iranian oil exports are falling further

SEOUL: Oil prices dipped on Tuesday amid expectations of an increase in US crude inventories, but signs of a fall in Iranian oil exports this month kept losses in check.
International benchmark Brent crude for December delivery had fallen 6 cents, or 0.07 percent, to $80.72 per barrel by 0654 GMT.
US West Texas Intermediate crude for November delivery was down 14 cents at $71.64 a barrel.
US crude stockpiles were forecast to have risen last week for the fourth straight week, by about 1.1 million barrels, according to a Reuters poll ahead of reports from the American Petroleum Institute (API) and the US Department of Energy’s Energy Information Administration (EIA).
The API’s data is due at 4:30pm EDT on Tuesday, and the EIA report will be released at 10:30am EDT on Wednesday.
“Uncertainties will remain until Nov. 4 when it would be clear whether the United States would want to cut Iran oil exports to zero or grant waivers,” said Vincent Hwang, commodity analyst at NH Investment & Securities in Seoul.
“Brent prices are likely stay in the range of $80 a barrel or slightly higher, while WTI prices are likely to be $70-$75 a barrel,” Hwang added.
In the first two week of October, Iran exported 1.33 million barrels per day (bpd) of crude to countries including India, China and Turkey, according to Refinitiv Eikon data. That was down from 1.6 million bpd during the same period in September.
The October exports are a sharp drop from the 2.5 million bpd in April US before US President Donald Trump withdrew from a multilateral nuclear deal with Iran in May and ordered the re-imposition of economic sanctions on the country, the data showed.
The sanctions will come into force on November 4. The US special envoy for Iran said on Monday that the US is still aiming to cut Iran’s oil sales to zero.
Meanwhile, OPEC Secretary General Mohammad Barkindo said on Tuesday that global spare oil capacity was shrinking, adding that producers and companies should increase their production capacities and invest more to meet current demand.
With the world’s only sizable spare oil output capacity, Saudi Arabia is expected to export more to offset the loss of Iranian oil supply from the sanctions.
Saudi Arabia’s Energy Minister Khalid Al-Falih said on Monday at a conference in New Delhi that the kingdom is committed to meeting India’s rising oil demand and is the “shock absorber” for supply disruptions in the oil market.