RYAAY Ryanair Holdings PLC

LONDON—Ryanair Holdings PLC on Monday reported second-quarter profit rose 8% and initiated another share buyback to help bolster investor sentiment after the pound's slump following the Brexit vote caused Europe's largest discount carrier to issue a profit warning last month.

Net profit for the July-to-September period, traditionally the busiest for Ryanair, rose to 912 million euros ($1 billion) from €843.1 million a year ago. Sales advanced 2% to €2.4 billion.

The Irish carrier said its board had approved a €550 million share-repurchase program, the airline's eighth, to be carried out through February 2017. It also signaled its confidence in growth by boosting its long-term passenger forecast.

Ryanair last month warned that the British currency's fall in the wake of the country's vote to leave the European Union would slow profit growth this year. More than a quarter of the Irish budget carrier's sales are in the U.K.

Net profit is now expected in the range of €1.3 billion to €1.35 billion in the year to end-March, adjusted down from €1.375 billion to €1.425 billion. Profit last year was €1.2 billion.

"Weaker airfares and Brexit uncertainty will be the dominant features of [the second half]," Ryanair said.

Europe's largest airline by passenger numbers, which lobbied against Britain leaving the EU, said "uncertainty over Brexit, and the final outcome of the U.K.'s departure negotiations with the European Union, will continue to overhang our business" into next year.

The British currency will be weaker and growth in the U.K. and Europe will slow, it said. Ryanair cut its U.K. growth forecast to 5% from 12% this year.

Chief executive Michael O'Leary said the capacity would instead go to Italy, Germany and Belgium, in part to take advantage of cuts made by other carriers.

Ryanair also moved to hedge its British currency exposure after Brexit to give it certainty over costs, said Chief Financial Officer Neil Sorahan. Ryanair has about 26% of sales in the British currency, with 18% of costs in pounds.

European airlines have been battling myriad headwinds beyond the fall of the British currency. Terrorist attacks earlier this year slowed bookings, air-traffic control strikes forced flight cancellations, and oversupply has driven down prices even as planes are full.

Ryanair said average ticket prices fell 10% even as load factor, a measure of seats sold, rose 95%. The airline carried 64.8 million passengers in the first six months of its financial year that ends March 31.

Mr. O'Leary also said the airline had raised its target for ancillary revenue for items such as early boarding or assigned seating. The airline now expects 30% of revenue by March 2020 to come from such sales, up from 20%.

The airline hasn't slowed overall expansion plans, though. Last week, it said it would open a base at Frankfurt Airport, intensifying pressure on rival Deutsche Lufthansa AG. Ryanair has targeted growth in Europe's biggest economy.

Ryanair said it now expects to carry 200 million passengers a year by March 2024, or 20 million more than previously expected by that time. The airline expects more than 119 million passengers will take its flights this year.

The airline will delay some disposal of Boeing Co. 737 planes and potentially extend some rentals, Mr. Sorahan said. No additional plane purchases are needed to reach the higher target, he said.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

November 07, 2016 02:15 ET (07:15 GMT)

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