Ryanair Holdings PLC on Thursday said it will launch a new €800 million share buyback, as stronger traffic and delayed capital expenditure due to Boeing Co delivery delays offset weaker airfares.
Ryanair shares closed 4.4% higher at €14.60 each in Dublin on Thursday.
The Dublin-based budget carrier will complete its current €700 million share buyback by the end of August, and then follow it up with another worth up to €800 million, ‘given the stronger than expected cash position’.
This will take total buybacks for the current financial year to €1.5 billion.
‘While S24 airfares had softened more than expected, cashflows have improved due to strong traffic growth and Boeing delivery delays which has considerably delayed planned capex,’ Ryanair explained.
The company will also ask shareholders at its annual general meeting to increase its yearly buyback authority to 15% of its issued share capital from 10%. The AGM is scheduled for September 12.
‘Ryanair faces into a 2-year period with no new aircraft deliveries from mid-2025 to mid-2027, it expects cashflow to receive a short term boost due to this temporary cut in aircraft capex. This creates the capacity to extend shareholder returns, which over the last 15 years amounts to €8 billion (including dividends) with over 30% of shares repurchased,’ it added.
Ryanair in July said quarterly profit nearly halved, as revenue declined slightly due to lower ticket prices despite carrying more passengers. The weakness in fares is expected to continue throughout the summer, it warned.
It reported pretax profit of €400.8 million for the three months that ended June 30, down 46% from €740.7 million a year before.
Total operating revenue was €3.63 billion, down 0.6% from €3.65 billion. Ancillary revenue - for example from onboard food and drink sales - grew by 10% to €1.30 billion from €1.18 billion, but scheduled revenue from ticket sales declined by 5.9% to €2.33 billion from €2.47 billion.
‘While Q2 demand is strong, pricing remains softer than we expected, and we now expect Q2 fares to be materially lower than last summer,’ Chief Executive Officer Michael O’Leary said in a statement.
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