Business Context and Reporting Period
Ryanair Holdings plc filed an annual Form 20-F for the fiscal year ended March 31, 2023. The requested “2022 Q4” period does not match the filing’s reporting period; the filing presents full-year fiscal 2023 results, with fiscal 2022 as the prior comparable period. The Group operates a low-fare, short-haul airline network across Europe and North Africa through Ryanair DAC, Buzz, Lauda, Malta Air and Ryanair U.K.
The consolidated financial statements are prepared in euro under IFRS as issued by the IASB and adopted by the EU. The filing was signed July 24, 2023, and the financial statements were approved July 21, 2023.
Key Financial and Operating Metrics
| Metric | Fiscal 2023 | Fiscal 2022 | Change or comment |
|---|---|---|---|
| Total operating revenue | €10,775.2m | €4,800.9m | Up 124% |
| Scheduled revenue | €6,930.3m | €2,652.5m | Up 161% |
| Ancillary revenue | €3,844.9m | €2,148.4m | Up 79%; 36% of total revenue versus 45% |
| Operating profit/(loss) | €1,442.6m | (€339.6m) | Operating margin improved to 13% from negative 7% |
| Profit/(loss) after tax | €1,313.8m | (€240.8m) | Basic EPS €1.1557 versus loss per share of €0.2130 |
| Net cash from operating activities | €3,891.0m | €1,940.5m | Up €1,950.5m |
| Capital expenditure | €1,914.7m | €1,181.6m | Primarily aircraft and related investments |
| Cash and cash equivalents | €3,599.3m | €2,669.0m | Up €930.3m |
| Gross cash resources | €4,675.0m | €3,625.8m | Includes cash, deposits over three months and restricted cash |
| Total borrowings including leases | €4,116.2m | €5,077.4m | Net cash €558.8m versus net debt €1,451.6m |
| Shareholders’ equity | €5,643.0m | €5,545.3m | Includes substantial negative movement in hedge reserves |
- Booked passengers increased 74% to approximately 169 million, from 97 million.
- Booked passenger load factor increased to 93% from 82%; the break-even load factor improved to 81% from 88%.
- Average booked fare increased 50% to €41.12, while ancillary revenue per passenger increased to €22.81 from €22.13.
- Total revenue per booked passenger was €63.93, compared with €49.47 in fiscal 2022.
- Fuel and oil expense increased to €4,025.7m from €1,699.4m and represented approximately 43% of operating expenses, compared with 33% in fiscal 2022.
- Ryanair reported more than €1.4bn of benefit from fuel hedging in fiscal 2023. Fuel hedging covered approximately 81% of fiscal 2024 requirements as of March 31, 2023, including forwards and call options.
- At March 31, 2023, the Group operated 537 aircraft, including 98 Boeing 737-8200 aircraft and 28 leased Airbus A320 aircraft. Approximately 99% of owned Boeing aircraft were unencumbered.
Material Changes Versus the Prior Comparable Period
- Results recovered sharply as Covid-19 travel restrictions eased. Traffic increased 74%, fares rose substantially and load factors returned above fiscal 2022 levels.
- Operating expenses increased 82% to €9,332.6m, reflecting higher flying activity, fuel prices, crew pay restoration, aircraft utilization and the winding down of Covid-related payroll support.
- Ex-fuel operating costs grew more slowly than traffic; management reported fiscal 2023 ex-fuel unit costs of approximately €31 per passenger.
- Net cash improved by approximately €2.01bn, from net debt of €1,451.6m at March 31, 2022 to net cash of €558.8m at March 31, 2023.
- The Group repaid an €850m Eurobond and €51m of Ex-Im debt during fiscal 2023. No share repurchases occurred in fiscal 2023 or fiscal 2022.
- Fuel and carbon hedge positions reversed materially year over year: the Group reported a net derivative liability position at March 31, 2023, compared with a substantial net derivative asset position at March 31, 2022. Other comprehensive income was reduced by €1,264.0m, primarily from hedge reserve movements.
- Covid-19 payroll support received was nil in fiscal 2023, compared with €82m in fiscal 2022.
Guidance, Outlook, Commentary, Risks and Unusual Items
Management’s going-concern base case modeled approximately 185 million passengers in fiscal 2024. Management stated that cash and available financing were sufficient to cover expected operating expenses, capital expenditures, debt repayments and taxes for at least the next 12 months. The filing does not provide a formal earnings-per-share or profit forecast.
- Ryanair intends to continue fleet expansion and expects approximately 640 narrow-body aircraft by March 2026, subject to deliveries, lease returns and disposals. The Group had 112 remaining firm Boeing 737-8200 deliveries under the 2014 Boeing contract at March 31, 2023.
- In May 2023, Ryanair agreed to purchase up to 300 Boeing 737-MAX-10 aircraft, comprising 150 firm orders and 150 options, for delivery from 2027 to 2033. The agreement was subject to shareholder approval at the September 14, 2023 AGM and was not included in the March 31, 2023 contractual-obligations table.
- Existing contractual obligations totaled €8,632m, including €3,910m of debt, €4,342m of aircraft purchase obligations, €233m of operating lease obligations and €147m of future interest payments.
- Principal risks include fuel prices and availability, foreign exchange, inflation, competition and fare pressure, aircraft delivery delays, dependence on Boeing, labor relations, airport access and charges, cybersecurity, pandemics, geopolitical events, environmental regulation, carbon costs, passenger compensation rules and discretionary travel demand.
- Fuel costs, aircraft and certain maintenance obligations are primarily U.S.-dollar denominated, while approximately 21% of fiscal 2023 revenue came from the U.K. The filing estimates that a one-pence movement in the euro/sterling exchange rate would affect fiscal 2024 net income by approximately €16m.
- EU ETS and other environmental costs are expected to rise as free emissions allowances are phased out. The Group recorded approximately €425m of carbon-credit expense in fuel and oil in fiscal 2023 and remitted approximately €833m of environmental taxes.
- State-aid investigations and appeals involving airport arrangements remain outstanding. Certain adverse findings require repayment of approximately €40m in alleged aid in aggregate, while other matters remain under investigation or appeal. Management cannot assure the outcome or potential broader effects on airport agreements and growth.
- A U.S. securities class action was agreed to be settled for $5m in March 2023, subject to court approval. Management maintained that the claim lacked a lawful basis.
- The filing identifies an exceptional after-tax loss of approximately €114m in fiscal 2023 related to the fair value measurement of jet fuel call options, compared with an exceptional after-tax gain of approximately €114m in fiscal 2022.
- In May 2023, the Company refinanced a €750m syndicated term loan maturing in May 2024 with an unsecured €750m revolving credit facility maturing in May 2028 at a lower margin.
Investor Verification Checklist
- Confirm that the intended period is fiscal year 2023 rather than calendar or fiscal 2022 Q4; this 20-F is an annual filing for the year ended March 31, 2023.
- Reconcile reported profit with the exceptional fuel-option loss and the unusually large hedge-reserve movements.
- Assess the sustainability of the fiscal 2023 margin and cash generation after fuel hedging benefits, higher labor costs, inflation and carbon expenses.
- Review the timing, financing and delivery risk associated with the 112 remaining Boeing 737-8200 aircraft and the proposed 737-MAX-10 order.
- Evaluate liquidity against €8,632m of contractual obligations, aircraft capital expenditure and debt maturities, including the €1,057m of current debt maturities.
- Monitor fuel, carbon and foreign-exchange hedge coverage and the associated fair-value sensitivity.
- Track state-aid litigation, airport-access arrangements, competition proceedings and the potential effects of adverse decisions on the route-growth strategy.
- Verify the effect of EU Pillar Two and U.K. tax-rate changes on the Group’s future effective tax rate.
- Consider the foreign-ownership restrictions applicable to non-EU and U.K. shareholders, including voting limitations and the suspension of new ADR issuance against deposited ordinary shares.
- Note that the auditor reported unqualified opinions on the financial statements and internal control over financial reporting as of March 31, 2023.