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.