Ryanair hits a rough patch

Ryanair is in the red this morning after revealing a drop in profits due to higher costs.

The low-cost airline announced first-quarter pre-tax profits of €78 million. This was 21% lower than the same period last year, even though the firm reported a 5% increase in revenue. The share price is trading at 699p, down 2.5% on the day. We could have seen a bigger price movement but the decline in profit was expected.

The largest component of Ryanair’s cost-base is fuel – it accounts for nearly half of total costs – and the fuel cost has risen 6% this quarter, as political instability in Egypt has driven the price of oil upwards. If oil continues its upwards trend we could see the share price move lower.

The air carrier cited an earlier Easter as a contributing factor to lower profits, as revenue from what is usually its first-quarter was included in further quarter results.

The company own a 29.8% stake in Irish rival Aer Lingus, but has had its takeover attempt blocked by the European and UK competition authorities. This has also reduced investor confidence in the company.

Ryanair chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.