Ryanair warns sterling decline will hit full year profits
Shares in budget airline Ryanair dipped today after it warned its full year profits are likely to be hit by the recent declines in sterling following June's Brexit vote.
The pound plunged to record lows in the wake of the EU referendum result, and has struggled to recoup its losses since.
The carrier reduced its full year guidance by five per cent, and now expects profit to come in in the €1.3bn (£m) to €1.35bn range, as opposed to the €1.375bn to €1.425bn range it previously predicted.
That caused its shares to fall as low as €11.45 at the open, before rising to €11.74, 0.6 per cent down.
"The primary cause of this slightly lower growth in full year profitability is the 18 per cent fall of sterling post-Brexit which will reduce H2 average fares by between 13 per cent to 15 per cent as opposed to the previously guided 10 per cent to 12 per cent," the airline said.
Ryanair also confirmed first half fares were "marginally weaker" than expected, dipping by 10 per cent as opposed to nine per cent, as previously guided. However, these lower fares will be partly offset by a better than expected cost performance, the group said.
Michael O'Leary, Ryanair's chief exec, who was a vocal advocate for the Remain camp in the run up to the referendum, said: “We would caution that this revised guidance remains heavily dependent upon no further weakness in H2 fares (-13 per cent to -15 per cent) or sterling from its current levels (€1 = £0.9050)."
He added: "As Ryanair will continue to be load factor active and price passive throughout the winter season at these low prices, there has never been a better time for customers to book or fly with Ryanair."
Ryanair said it will "pivot" growth away from the UK just days after the country voted to exit the EU.