Ryanairs Q3/07 svakere enn forventet - venter dårligere 2009

[CK]

DUBLIN (Dow Jones)--Ryanair Holdings PLC (RYAAY) Monday warned that the outlook for 2009 is poor with a "perfect storm " of rising oil prices, plus weakening consumer confidence and sterling, hitting profits.

For the year to March 31, 2009, Chief Executive Officer Michael O'Leary said Europe's largest budget airline by passengers carried remains "essentially unhedged" beyond March 2008 in a climate of high oil prices.

O'Leary said oil prices, which have risen nearly 40% to $90 a barrel, will impose significantly higher costs during a year when it's expanding capacity by almost 20%, while the recent weakness of sterling may also be a factor.

"There can be only one competitive response to any consumer uncertainty, and that's for Ryanair to slash fares and yields, stimulate traffic, encourage price sensitive consumers, and promote new routes/base developments," O'Leary said.

Flat yields and oil at $75 a barrel would see profit growth of 6% to around EUR500 million, but if forward oil prices remain at $85, and consumer sentiment/sterling weakness leads to a 5% fall in yields, profit could fall 50% to EUR235 million, he said.

For the third quarter ended Dec. 31, 2007, the airline posted a 1% dip in net profit to EUR47.2 million against EUR47.7 million last year; this was better than analysts' expectations of EUR39 million helped by a EUR13.65 million gain on disposal of property, plant and equipment.

Third quarter passengers rose 21% to 12.4 million, while revenue rose 16% to EUR569 million.

On the upside, Ryanair maintained existing guidance and forecasts net profit in the year to March 31, 2008, up some 17.5% to around EUR470 million.

It also announced a possible EUR200 million share buyback after Feb. 6, but said there's no guarantee it would complete it. At the current market price of EUR3.60, this equates to about 3% of the company's issued share capital.

Analysts see the uncertain 2009 outlook hitting the stock Monday.

At Friday's close, Ryanair shares were down 5.3% to EUR3.60 amid market volatility due to concerns over U.K. and Irish consumer spending and high oil prices. The stock is down 35% from EUR5.54 at its second quarter results last November.

"The market clearly remains concerned about Ryanair's ability to grow profits given the headwind it has for fuel - EUR5 per passenger at current oil levels - and potential weakness in the U.K. consumer," said Davy Stockbrokers. Davy doesn't rate stocks, but has a EUR7.00 price target on Ryanair.