Ryanair 2016 Annual Report Download - page 98

98
Finance expense. Ryanair’s interest and similar charges decreased 4.2%, from €74.2 million in the 2015 fiscal
year to €71.1 million in the 2016 fiscal year, primarily due to lower interest rates.
Finance income. Ryanair’s interest and similar income remained flat at €17.9 million in the 2016 fiscal year as
lower interest rates were offset by higher average cash balances and a 25% increase in the Aer Lingus dividend compared
to fiscal 2015.
Foreign exchange gains/losses. Ryanair recorded foreign exchange losses of €2.5 million in the 2016 fiscal year,
as compared with foreign exchange losses of €4.2 million in the 2015 fiscal year, with the different result being primarily
due to the impact of changes in the euro exchange rate against the U.S. dollar and U.K. pound sterling.
Taxation. The effective tax rate for the 2016 fiscal year was 11.6%, as compared to an effective tax rate of 11.8%
in the 2015 fiscal year. The effective tax rate reflects the statutory rate of Irish corporation tax of 12.5%. Ryanair recorded
an income tax provision of €162.8 million in the 2016 fiscal year, compared with a tax provision of €115.7 million in the
2015 fiscal year, with the increase primarily reflecting higher pre-tax profits. The determination regarding the
recoverability of the deferred tax asset was based on future income forecasts, which demonstrated that it was more likely
than not that future profits would be available in order to utilize the deferred tax asset. A deferred tax asset’s recoverability
is not dependent on material improvements over historical levels of pre-tax income, material changes in the present
relationship between income reported for financial and tax purposes, or material asset sales or other non-routine
transactions.
FISCAL YEAR 2015 COMPARED WITH FISCAL YEAR 2014
Profit after taxation. Ryanair recorded a profit on ordinary activities after taxation of €866.7 million in the 2015
fiscal year, as compared with a profit of €522.8 million in the 2014 fiscal year. This 65.8% increase was primarily
attributable to a 1.4% increase in average fares, a 10.9% increase in traffic, a stronger load factor (up 5 points to 88.2%),
and 10.8% fuel savings per passenger.
Scheduled revenues. Ryanair’s scheduled passenger revenues increased 12.4%, from €3,789.5 million in the 2014
fiscal year to €4,260.3 million in the 2015 fiscal year, primarily reflecting an increase of 1.4% in average fares. The number
of passengers booked increased 10.9%, from 81.7 million to 90.6 million, reflecting increased passenger volumes on
existing routes and the successful opening of new bases at Athens, Lisbon, Thessaloniki, Warsaw, Cologne, Glasgow
International, Gdansk and Bratislava in the 2015 fiscal year. Booked passenger load factors increased to 88.2% in fiscal
2015 compared with 83% in fiscal 2014.
Passenger capacity during the 2015 fiscal year increased by 3.8% due to an increase in the average number of
aircraft in the fleet. Scheduled passenger revenues accounted for 75.4% of Ryanair’s total revenues for the 2015 fiscal
year, compared with 75.2% of total revenues in the 2014 fiscal year.
Ancillary revenues. Ryanair’s ancillary revenues, which comprise revenues from non-flight scheduled operations,
in-flight sales and Internet-related services, increased 11.7%, from €1,247.2 million in the 2014 fiscal year to €1,393.7
million in the 2015 fiscal year, while ancillary revenues per booked passenger increased to €15.39 from €15.27. Revenues
from non-flight scheduled operations, including revenues from excess baggage charges, administration/credit card fees,
sales of rail and bus tickets, priority boarding, reserved seating, accommodation, travel insurance and car rental increased
15.0% to €1,164.4 million from €1,012.4 million in the 2014 fiscal year. Revenues from in-flight sales increased 9.2%, to
€128.1 million from €117.3 million in the 2014 fiscal year. Revenues from Internet-related services, primarily commissions
received from products sold on Ryanair.com or linked websites, decreased 13.9%, from €117.5 million in the 2014 fiscal
year to €101.2 million in the 2015 fiscal year, reflecting a combination of factors including an improved product mix and
the implementation of fully reserved seating across the network. The rate of increase in ancillary revenues exceeded that
of the increase in overall passengers booked.