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Irish airline Ryanair cut its full-year net profit forecast by five per cent on Tuesday owing to the pound's slump since Britain voted in June to exit the European Union (EU). "The primary cause of this slightly lower growth in full year profitability is the 18 percent fall of sterling post-Brexit which will reduce second half average fares," the Dublin-based airline said in a statement. The pound's tumble is reducing the amount Ryanair earns from its key British market once the currency is converted into euros — the unit of Ireland and which Ryanair uses to price its earnings. Ryanair said it was cutting its financial year (FY) 2016/17 net profit forecast by five per cent to between 1.3 billion euros and 1.35 billion euros ($1.4 billion and $1.5 billion).
Its FY runs to the end of March.Ryanair Chief Executive Michael O'Leary added in the statement that stronger traffic growth and better cost control would contribute to offsetting the hit in revenues, adding that the British market represents about one-quarter of the group's total income. The pound has tumbled to 7.5-year lows against the euro and 31-year troughs versus the dollar since Britain voted June 23 in favour of leaving the EU as markets price in future economic uncertainty. The office of British Prime Minister Theresa May on Monday sought to downplay cabinet tensions over Brexit after reports of her finance minister antagonising colleagues with his warnings about the economic dangers. Chancellor of the Exchequer Philip Hammond has reportedly been pushing to delay measures designed to control immigration, which would likely be viewed by EU leaders as incompatible with continued membership of the single market. O'Leary has meanwhile previously said that Brexit uncertainty would more than halve Ryanair's UK growth.