Monday, February 11 17:36:16
The ISEQ closed the day's trading firmly in the red and below the 3,600 level with the fall led by Ryanair and Aer Lingus as the clock ticks on EU approval for Ryanair's latest bid for its rival at E1.30 a share while Smurfit Kappa was hit by Venezuela's devaluation.
The index was down 27.42 points to 3,578.82.
Jim French, chief executive of British airline, Flybe, is in Dublin today to sell the deal announced last week with Ryanair to create a new carrier as part of a deal with Ryanair to satisfy regulatory concerns over Ryanair's last-ditch bid for Aer Lingus. He has pledged to develop more flights between Ireland and the UK if the European Commission gives the go-ahead. Under the deal with Ryanair, the new carrier, Flybe Ireland, would receive E100 million and nine aircraft from Ryanair and commit to operating 43 routes for at least three years if Ryanair's Aer Lingus bid succeeds, he said. Shares in Ryanair fell 8c to E5.67 while Aer Lingus stocks dropped 3c to E1.34.
Smurfit Kappa's stocks declined 30c to E10.77. Following an announcement by the Venezuelan government on Friday that it is devaluing the Bolivar by 32pc, Smurfit Kappa has today notified the market of the impact on its operations. Firstly, group net assets will be reduced by 6pc or E142m and cash balances in euro terms will decline by E29m (6pc of group cash balances). We estimate that the devaluation will impact Group EBITDA by 1-2pc in FY13, which is consistent with management comments that it will not be material. "The potential for such a devaluation was well flagged by management in the FY12 results last week and thus should not come as a great surprise to the market. We continue to favour Smurfit Kappa given its undemanding valuation and upside potential to forecasts from a favourable pricing cycle. We reiterate our BUY recommendation," said Goodbody's.