Qantas soars, dives
Record profits but shares take big dip
QANTAS shares have dropped by 3 per cent despite Australia’s major carrier posting a record underlying profit of $1.6 billion.
The airline yesterday reported full-year net profit rose 15 per cent to $980 million, helped by strong performances from the domestic flying business of Qantas and Jetstar.
Chief executive Alan Joyce said the record profit reflected a strong market as well as the benefits of ongoing work to improve the business and build long-term shareholder value, but warned of challenges ahead. “We’re facing another increase to our fuel bill for 2018/19 and we’re confident that we will substantially recover this through a range of capacity, revenue and cost efficiency measures, measures, in addition to our hedging program,” he said in a statement.
At the close yesterday, Qantas shares were down 19 cents, or 2.8 per cent, to $6.53.
The group’s domestic flying division delivered earnings of $1.1 billion, a 25 per cent jump from the previous year, driven by efficiency gains and higher seat occupancy on its planes as the airline boosted pre- mium offerings such as new lounges and free Wi-Fi, for passengers. Qantas international division increased its earnings by 7 per cent to $399 million.
The company has set aside a further $67 million for up to 27,000 non-executive employees with a bonus of $2500 each.
“It brings the total amount set aside for non-executive employees to over $300 million over the past four years for their part in the Group’s ex- ceptional performance,” Mr Joyce said.
Qantas didn’t provide a specific guidance for 2018/19, but said its fuel bill is expected to jump by $690 million to $3.9 billion, while group expenditure would rise by around $250 million.
It expects transformation benefits of $400 million in the current financial year.
Qantas said it would return $500 million to its shareholders.
It declared a fully-franked final dividend of 10 cents per share, up 3.0 cents from a year earlier, as well as a fresh onmarket share buyback of up to $332 million.