Ryanair 2006 Annual Report Download - page 11

Operating Expenses (Continued)
Airport and handling charges increased by 21% to 216.3m,
which was slower than the growth in passenger volumes and
reflects the impact of increased costs at certain existing
airports, offset by lower costs at new airports and bases.
Other expenses increased by 8% to 85.6m, which is lower
than the growth in ancillary revenues due to improved margins
on some existing products, and cost reductions achieved on
indirect costs.
Adjusted Operating Profits
Operating margins have declined by 3 points to 22% due to
the reasons outlined above whilst operating profits have
increased by 12% to 369.1m during the year.
Interest Receivable
Interest receivable has increased by 35% to 38.2m for the
year due to the combined impact of higher levels of cash and
cash equivalents and increases in average deposit rates
earned compared to last year.
Foreign Exchange (Losses)
Foreign exchange losses have decreased during the year to
1.2m due to the positive impact of changes in the Sterling and
US Dollar exchange rates against the Euro compared to last
year.
Disposal of Fixed Assets
The gain on disposal of fixed assets of 0.8m arises from the
disposal of the remaining 9 Boeing 737-200 aircraft during the
year.
Adjusted Earning per Share (EPS)
Adjusted earnings per share has increased by 11% to 39.32
Euro cent for the year and is based on 766,832,502 shares
which represents the weighted average of ordinary shares in
issue during the year.
Balance Sheet
The group’s balance sheet continues to reflect the significant
capital expenditure programme being undertaken by the
group. An additional 21 aircraft were delivered during the year
which, in conjunction with the payment of deposits on future
deliveries, accounted for the bulk of 546.2m spent on capital
expenditure during the year. During the same period the
company generated cash from operating activities of 599.0m
that part funded the capital expenditure programme with the
balance reflected in total cash of 1,972.0m. The exercise of
share options, primarily by pilots generated a further 30.6m
cash for the group. Total debt, net of repayments, increased
by 262.9m during the year.
Shareholders’ Equity
Shareholders’ equity at March 31, 2006 has increased by
257.5m to 1,992.0m, compared to March 31, 2005
reflecting the 306.7m increase in profitability during the
year, and the exercise of share options which increased equity
by 30.6m, offset by a reduction of 79.9m resulting from
changes in the accounting treatment for derivative financial
instruments, pensions and stock options following the
adoption of IFRS.
Capital Expenditure
During the year the group’s capital expenditure amounted to
534.7m. The majority of this related to the purchase of 21
Boeing 737-800 “next generation” aircraft and deposits
relating to the future acquisition of additional new Boeing 737-
800’s. Four new Boeing 737-800 “next generation” aircraft
were financed by way of operating lease during the year
bringing the increase in total new aircraft operated to 25.
Further details are given in note 11.
Review of Cash Flow
Net cash provided from operating activities was 610.6m,
reflecting the overall profitability of the group and working
capital movements including advance revenues. This has
enabled the group to increase its cash and liquid resources by
366.3m to 1,972.0m despite part funding capital
expenditure of 159.4m from internal cash resources. At
March 31, 2006 the group had advance purchase deposits with
Boeing of 301.5m for future aircraft deliveries.
(Continued)
Operating & Financial Review 11
ANNUAL REPORT & FINANCIAL STATEMENTS 2006