Ryanair says every 1p drop in sterling wipes €7m off its earnings


Ryanair, one of the most directly exposed Dublin-listed companies to Brexit, has laid out the impact of sterling volatility on its earnings, saying every 1p decline against the euro is wiping €7 million off its earnings.

“For the remainder of fiscal year 2020, taking account of timing differences between the receipt of sterling-denominated revenues and the payment of sterling denominated costs, Ryanair estimates that every 1 pence sterling move in the EUR/GBP exchange rate will impact income by approximately €7 million,” the carrier warned in new bond documents.

The comments in the prospectus for its bond programme came as sterling dropped 0.7 per cent on Friday to a two-year low of 92.9p against the euro on news that the UK economy had contracted unexpectedly in the second quarter, adding to mounting market nervousness about the prospect of a no-deal Brexit at the end of October.

Sterling’s decline against the single currency has totalled 8p over the past three months alone, with the sell-off having been accelerated since Brexiteer Boris Johnson became British prime minister late last month.



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here