Ryanair profits surge puts O'Leary back on course for potential €100m incentive
O'leary Back Secure To Is The €100m On Michael Years Executive Ing In Almost Course Chief Ryanair Potential A Bonus Of
Ryanair soared back to profit in its latest financial year, and is set for record profits this year, as hot demand over the peak summer months, more flights, and higher airfares help offset an anticipated huge uplift of €1bn in its fuel bill.
The airline unveiled €1.43bn in after-tax profits for the 12 months to the end of March and predicted an increase of 10% in passenger numbers to 185 million for the 2024 financial year which will also likely see it deliver a double-digit increase in profits.
And chief executive Michael O'Leary set the scene for Ryanair to think about restarting paying dividends for the first time since 2015, saying that “if we have another strong year and we have significant net cash balances, then we’ll return those to shareholders”.
The rebound also means Mr O'Leary is back on course to secure a potential bonus of almost €100m in the coming years. Under the terms of a revised contract following the pandemic, the ceo will be granted the option of buying 10 million shares at €11.12 each, if the airline by summer 2028 posts €2.2bn in annual after-tax profits, or the share price trades at €21 for 28 days.
Ryanair shares, which closed 1.3% higher at €15.85 in the latest session, have now climbed almost 30% since the start of the year. The airline has in the past said that pay for Mr O'Leary and other executives was built around "a relatively low basic salary" but was also based on bonus-pay incentives.
The airline revealed it held €560m in cash at the end of March, and anticipated paying an additional €1bn this financial year for fuel. Its spring fares were "significantly higher" and summer peak fares were "trending ahead of last year", amid "robust" demand, it said.
Goodbody analyst Mark Simpson said the results marked the start of the company building a "platform" that will allow it pay cash for the huge spend entailed in buying 300 fuel-efficient Boeing Max-10 planes, including firm orders and options, for delivery from early 2027 to 2033.
"While management are being reasonably cautious about the FY24 performance, there is no doubt that the platform building for an extended period of significant market share wins over the next decade is advancing this year," Mr Simpson said.
He said Goodbody anticipated fares for the full 2024 financial year would be 12.5% higher from the previous year, but with peak summer fares up by 10.2%.