Irish no-frills airline Ryanair said on Monday that annual profits fell for the first time for five years, hit by lower fares and higher fuel costs, but forecast record earnings this year. Earnings after taxation dropped 8.0 percent to 523 million euros ($717.2 million) in the 12 months to the end of March, the Dublin-based carrier said in a results statement. That compared to a record net profit of 569 million euros in 2012/2013, as the airline cut fares to offset weak demand. The latest figure represents the first decline in annual profits for five years. "While disappointing that profits fell 8.0 percent to 523 million euros due mainly to a 4.0 percent decline in fares, weaker sterling, and higher fuel costs, we reacted quickly to this weaker environment last September by lowering fares and improving our customer experience," chief executive Michael O’Leary said in the earnings release. "Ancillary revenues grew 17.0 percent, much faster than traffic growth, and now accounts for 25 percent of total revenues," he added. Passenger numbers grew by 3.0 percent to 81.7 million in the last financial year, while revenue also grew 3.0 percent to 5.03 billion euros. Turning to the outlook, Ryanair predicted that the company's traffic will grow by 4.0 percent to 84.6 million passengers in the coming financial year. It said a strong first half of this financial year will "generate a significant rise in after tax profits to a range of between 580 million euros to 620 million euros." Ryanair shares were up 5.44 percent to 6.69 euros in early morning Dublin trading. The often-criticised carrier set about improving its customer experience last year by introducing changes such as an easier to use website, reduced boarding card and baggage fees, and allocated seats. Kenny Jacobs, the company's new chief marketing officer, appointed during the overhaul, said that the changes were having an impact. "The forward bookings that we have and the strong load factor are because this is working," he told Irish radio Monday morning. "Customers want a more straight-forward Ryanair with better service. That's what they're getting and that's why our outlook for (the first six months) is very strong." The company said deliveries of its 180 new Boeing 737-800 aircraft would begin in September allowing for "significant growth opportunities." On Friday, ratings agency Fitch followed Standard and Poor in awarding the airline a BBB+ rating, making it the highest rated airline in the world. The move opens the door to Ryanair to raise money on the debt markets to help fund the Boeing order.