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Ryanair posts first quarterly profit since 2019 but sees annual loss

By Conor Humphries

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Ryanair posts first quarterly profit since 2019 but sees annual loss
© Reuters. FILE PHOTO: A Ryanair plane takes off from Manchester Airport as the spread of the coronavirus disease (COVID-19) continues in Manchester, Britain June 21, 2020. REUTERS/Phil Noble/File Photo GLOBAL BUSINESS WEEK AHEAD

By Conor Humphries

DUBLIN (Reuters) – Ryanair on Monday reported its first quarterly profit since before COVID-19, but downgraded its annual forecast to a loss of up to 200 million euros ($231 million) on plans to sell discounted tickets over the winter and higher fuel costs.

Europe’s largest budget airline, which operated more flights this summer than any European rival, posted a profit of 225 million euros for the three months to the end of September, marking its first quarterly profit since October-December 2019.

But the Dublin-based airline said it expected a loss of between 100 million and 200 million euros for the financial year that ends on March 31.

While that is better than the 815 million euro loss posted in the previous year, it is a downgrade from its July forecast of “somewhere between a small loss and breakeven”.

“There is no doubt that the remainder of the fiscal year will be challenging, the winter will be tough,” Group Chief Executive Michael O’Leary said in a video presentation.

But keeping prices low and passenger numbers high over the winter will “set us up strongly for a very strong recovery” in passenger numbers and ticket prices into the summer of 2022, he said.

The number of empty seats per plane would shrink from around 20% to under 10% by next summer while yields, or fare levels, will return to pre-COVID levels “if not better”, O’Leary said.

The airline expects to return to profitability in the year ending March 2023, he said.

OPPORTUNITIES

Ryanair shares briefly dropped more than 4% to 16.2 euros after what Goodbody stockbrokers described as a “slight miss” and a more cautious outlook statement than expected.

The shares recovered most of the losses to trade down 0.6% by 0925 GMT at 16.85 euros. O’Leary was due to brief investors in a call at 1000 GMT.

Ryanair carried 39.1 million passengers in the six months ended September, more than double the number in the period last year but 54% fewer than the same months in 2019.

Ryanair said it would fly around 10 million passengers per month over the winter and “just over” 100 million in the year to March.

It flew 149 million passengers a year before the pandemic and Chief Financial Officer Neil Sorahan said it expected to fly a record 165 million passengers next year.

O’Leary, who has said the pandemic offers the best growth opportunities of his three-decade career, reiterated a forecast that Ryanair would fly 225 million passengers a year by 2026.

Ryanair reported an after-tax loss of 48 million euros for the six months to September, which includes a 273 million loss in the first quarter. A company poll of analysts had forecast a loss of 43 million euros for the six months.

($1 = 0.8651 euros)

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Economy

Oil Prices Fall amid Protests in China

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Oil prices decline

Oil prices fell on Monday amid a general decline in investor appetite for risk amid information about the ongoing protests in China against vested restrictions.

The cost of January futures on Brent crude oil on London’s ICE Futures exchange was $81.31 per barrel on Monday, down $2.32 (2.77%) from the close of the previous session. At the close of trading on Friday, those contracts fell $1.71 per barrel to $83.63.

Oil prices decline – what’s going on in the market?

The price of WTI futures for January crude fell by $2.31 (3.03%) to $73.97 per barrel in electronic trading on the New York Mercantile Exchange (NYMEX). By closing of previous trades, the cost of these contracts decreased by $1.66 (2.1%) to $76.28 per barrel. Brent and WTI gained 4.6% and 4.8%, respectively, last week.

According to Bloomberg, protests were held in cities across the country, including the capital Beijing, as well as Shanghai, Xinjiang, and Wuhan, which was originally the epicenter of the COVID-19 spread.

That contributes to a stronger U.S. dollar, which reduces the attractiveness of investments in crude, and also raises the possibility of even more significant tightening of restrictions by Chinese authorities, the agency said.

“The outlook for the oil market remains unfavorable and the events of this weekend in China do not add to the positive,” notes Warren Patterson, who is in charge of commodities strategy at ING Groep NV in Singapore.

According to the forecast of analytical company Kpler, oil demand in China in the fourth quarter will decrease to 15.11 million barrels per day (bpd) compared to 15.82 million bpd a year earlier.

Earlier we reported that Russia will ban the sale of its oil to countries that have imposed a price ceiling.

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Economy

Oil Russia ban news: Russia will ban the sale of its oil to countries that have imposed a price ceiling

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oil Russia ban

Will Russia sell oil to Europe? The administration of President Vladimir Putin is preparing an order prohibiting Russian companies and any trader from buying Russian oil to sell raw materials to countries and companies that have imposed a price ceiling on Moscow. Bloomberg news agency wrote this, citing a report from sources.

“The Kremlin is preparing a presidential decree banning Russian companies and any traders buying national oil from selling it to anyone who participates in the price ceiling,” the publication wrote.

According to the newspaper’s interlocutors, this would prohibit any mention of the price ceiling in contracts for Russian crude, as well as transferring it to countries that have joined the price ceiling for the natural resource.

In the first half of September, the press service of the US Treasury Department said that the USA, together with its allies from G7 (Great Britain, Germany, Italy, Canada, France and Japan) and the European Union (EU) would impose a ban on marine transportation of Russian oil on December 5 and oil products – on February 5.

Earlier we reported that EU negotiations on limiting the prices of Russian oil reached a deadlock today.

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Economy

EU talks on restrictions on Russian crude oil prices today stalled

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russian crude oil price today

Negotiations between the European Union countries about the “ceiling” of Russian crude oil prices today reached an impasse; Bloomberg reported, according to its sources.

Representatives of the bloc cannot reach an agreement on the ceiling price of Russian oil. According to the agency, the proposed European Commission limit of $65-70 per barrel, Poland and the Baltic countries believe “too generous,” while Greece and Malta, which is actively engaged in transporting fuel, do not want the limit to fall below $ 70. Recall that the Russian response to the oil price cap was negative. The Russian government has officially said that it will only sell oil at market prices.

“We are looking for ways to make this solution work and we are trying to find a common ground to implement it in a perfectly pragmatic and efficient way, while avoiding that it may cause excessive inconvenience to the European Union,” said German Chancellor Olaf Scholz.

Earlier, we reported that the SEC fined Goldman Sachs $4 million for non-compliance with ESG fund principles.

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