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Today’s value in Europe Ryanair expects a return to “reasonable profitability” this year

(AOF) – The recovery is underway at Ryanair (-3.01% to 13.22 euros) which reduced its net loss during its 2021-2022 financial year (ended at the end of March 2022). The latter amounted to 355 million euros before exceptional items, against a loss of one billion euros in the previous year. This is better than the consensus expected, a net loss of 370 million euros. At the same time, the low-cost airline carried more than 97 million passengers, compared to 27.5 million in the previous financial year and 149 million pre-crisis.

Turnover amounted to 4.80 billion euros, compared to 1.64 billion euros in the previous financial year. It is in line with consensus expectations.

During its last financial year, the Irish company reduced its net debt: it went from 2.3 billion euros to 1.5 billion euros. Ryanair has a ‘BBB’ credit rating from S&P and Fitch, with a stable outlook. The company intends to reduce this net debt to zero over the next two years, despite a high Capex level. For UBS, this will be the case in just one year.

For its current financial year, which will end at the end of March 2023, Ryanair expects to carry 165 million passengers. In addition, the group hopes for a return to “reasonable profitability”. However, he specifies that the recovery remains fragile and is not in a position to communicate quantified financial objectives, due to the risks linked to the war in Ukraine and to Covid.

Finally, Ryanair says it has covered 80% of its jet fuel purchases for the financial year ending at the end of March 2023. However, the 20% not covered will lead to “unbudgeted cost increases”.

As a first approach, UBS maintained its Buy recommendation and its target price of 18.90 euros on Ryanair stock. For its part, Stifel confirmed its Hold recommendation and its target price of 15 euros.

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