Ryanair forecasts record annual profits following strong summer and will reward shareholders with dividend payments from February

Ryanair is expecting to score its highest-ever annual profit after the airline reported an excellent first-half performance.

The Irish carrier reported profits jumped by 59 per cent to €2.18billion (£1.89billion) in the six months ending September thanks to bumper trade over the Easter holidays and summer season.

Revenue climbed by almost €2billion to €8.58billion during the period, supported by passenger numbers increasing by 11 per cent to 105.4 million and average airfares rising by nearly a quarter.

Strong result: Ryanair reported profits jumped by 59 per cent to £1.89billion in the six months ending September thanks to bumper trade over the Easter holidays and summer season

This was despite the firm cancelling thousands of flights because of air traffic issues, including successive strikes by ATC staff in France and a major technical glitch at the UK’s National Air Traffic Services over the summer bank holiday weekend.

Turnover growth helped offset operating costs soaring by 24 per cent to €6.16billion due to surging fuel bills, air traffic control fees, and staff costs from adding extra crew and hiking wages.

Ryanair warned trade could be affected by much bigger fuel costs, subdued consumer spending in the coming months and uncertainty over deliveries from Boeing.

In late September, the business reduced its winter flight schedule as a result of delays in receiving new Boeing 737 planes, partly caused by production issues at the Spirit fuselage factory in Kansas.

But it still anticipates attracting 183.5 million passengers for the fiscal year ending March 2024 and achieving record full-year profits of between €1.85billion and €2.05billion. 

The Dublin-based company noted ‘robust’ volumes of forward bookings for the late October and Christmas travel periods.

It also expects ticket prices in the third quarter to grow by a ‘mid-teens’ percentage due to capacity limits across the European Union and engine repairs at rival airlines.

Michael O’Leary, its chief executive, said such guidance was ‘highly dependent on the absence of any unforeseen adverse events’ like the Ukraine war and the current Middle East crisis.

Nonetheless, Ryanair has announced it will start regular dividend payments, beginning with two instalments of €200million to be paid out in February and September 2024, respectively.

Following this, the group plans to return about a quarter of its annual post-tax profits to shareholders each year.

Ryanair shares were 5.4 per cent higher at €16 on the Euronext Dublin exchange on Monday morning, meaning they have grown by 26 per cent over the past 12 months.

Adam Vettese, an analyst at eToro, expects the airlines’ shares to continue rising, telling investors: ‘We believe there is still plenty of runway left for investors given its growth rate and the fact its shares are still relatively cheap on a price-to-earnings basis.

‘Looking forward, fuel costs remain a concern and will likely weigh on profitability, but we expect the firm to continue growing by most metrics over the next few quarters.’

This post first appeared on Dailymail.co.uk