Profit falls but Qantas bullish

QANTAS Airways is forecasting blue skies ahead despite another bumpy year in which revenue and profits declined across several divisions.

Qantas’s net profit for the year to June was $852 million, a 17 per cent plunge compared with last year.

Total revenue was down by 1 per cent at $16.06 billion, but earnings before interest and tax also fell 13.8 per cent to $1.37 billion.

Shareholders will receive a final 7c a share unfranked dividend to take their full year payout to 14c, double last year’s total of 7c.

The company announced another on-market share buyback, which helped outweigh the profit fall and boost the share price to a long term high in trading yesterday.

The company announced bonuses of $2000-$2500 for staff, to help compensate them for their wages freeze, with up to 25,000 staff expected to be in line for a top-up payment.

Qantas chief executive Alan Joyce said the past year marked the completion of the airline’s restructuring program. “Three years ago we started an ambitious turnaround program to make the Qantas Group strong and profitable,” Mr Joyce said.

“Today’s announcements show this plan has well and truly paid off.

“Aviation is a competitive business. We take nothing for granted and we have no intention of being complacent.

“That’s why we’re taking the energy and focus from the turnaround and putting it into continuous improvement.”

Mr Joyce also announced further improvements to its flight lounges, Wi-Fi availability and cabin upgrades.

The company yesterday reported only underlying results, which stripped out restructuring costs, bonuses and other expenses.

On an underlying basis, Mr Joyce said Qantas’s pre-tax profit was $1.4 billion, down only 8.6 per cent.

Domestic travel revenue fell 1.4 per cent to $5.6 billion, but underlying profit was a strong $645 million, up 12 per cent.

Mr Joyce said Qantas International revenue was steady at $5.7 billion, however its profit fell 36 per cent to $327 million.

Jetstar had a 1 per cent fall in revenue to $3.6 billion and its profit fell 7.7 per cent to $417 million. The freight division had a 4.4 per cent decline in revenue with profit down 26 per cent to just $47 million.

The airline’s loyalty flight program achieved the strongest income growth, up 3.5 per cent to $1.5 billion with profit up 6.6 per cent to $369 million.