Qantas profit falls 7.5pc but beats guidance
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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.
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Nicholas Grove is a Morningstar journalist.
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