Not a subscriber ?  Start your complimentary Premium trial now

News

Qantas profit falls 7.5pc but beats guidance

Nicholas Grove  |  23 Feb 2017Text size  Decrease  Increase  |  

Page 1 of 1

Qantas Group's (ASX: QAN) underlying profit before tax and one-off items fell 7.5 per cent to $715 million for the first half of fiscal 2017, after profitability across all business units was offset by a "mixed" global aviation market, and ongoing investments in the airline's transformation program.

Statutory earnings per share stood at 27.3 cents for the half, the airline said in a statement to the ASX on Thursday.

The Australian flag carrier declared a half-year dividend of 7 cents a share, 50 per cent franked, to be paid on 10 April 2017.

In addition, Qantas will complete the remaining $91 million of the $366 million on-market share buyback it announced in August 2016.

Chief executive Alan Joyce said Qantas and Jetstar's domestic operations produced an "outstanding" result, while the Qantas Loyalty business continued to thrive.

However, he said the international market has been tough due to capacity growth and lower fares--and that Qantas International is not immune from those pressures.

"But the work we've done on removing costs and making the business more efficient means Qantas International is outperforming its peers in the region," Joyce said.

"Our focus is to stay disciplined on capacity, keep downward pressure on costs, and introduce game-changing improvements like the Dreamliner and high-speed Wi-Fi."

Qantas said it remains in a strong capital position with net debt of $5.97 billion, and capital expenditure weighted to the first half.

The company also reiterated its commitment to keep debt within its target range of $4.8 billion to $6 billion.

Qantas did not provide any specific full-year earnings guidance due to "to industry and economic dynamics".

"The short-term outlook remains subject to variable factors, including oil price movements, foreign exchange movements and global market conditions," the airline said.

More from Morningstar

• Westfield Group's earnings meet guidance

• Woodside delivers US$868m full-year profit

 

Nicholas Grove is a Morningstar journalist.

© 2016 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.

Uncover winning investment ideas and strengthen your portfolio with a 4-week free trial to Premium:

  • Your Money Weekly Newsletter
  • Independent Fund Analyst Research
  • Portfolio X-Ray
  • Investment Picks
* only available to new subscribers