Qantas bounces back to profit
Qantas has swung back into profit, beating its own forecasts and bouncing back from losses of almost $3 billion.
The airline’s interim net profit was $203 million, while its underlying profit was $367 million, its best first-half performance since 2010 and an improvement of $619 million compared to the same time last year.
Qantas International was profitable for the first time since the global financial crisis with underlying earnings of $59 million – a turnaround of $321 million over the same period last year.
The impressive result, in part driven by lower fuel costs, points to a strong second half result.
Shares in the airline soared in early trade. The stock was 18 cents, or six per cent, higher at $2.99 at 1009 AEDT.
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The result, which follows a loss of $2.8 billion in 2013/14, was driven by stronger earnings across all of the airline’s divisions and comes amid sliding fuel prices and efforts to cut $2 billion in costs.
Qantas had forecast an underlying profit of between $300 million and $350 million for the half year to December 31.
Chief executive Alan Joyce said the decisive factor in the airline’s “best half year performance in four years” was its transformation program which delivered $374 million in benefits.
“Without the impact of transformation, Qantas would not be profitable today,” he said.
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Joyce also singled out the repeal of the carbon tax as being a “positive driver” behind the turnaround, adding $59 million in benefits.
“These results confirmed that we are executing the right plan with discipline and with speed. We are meeting or exceeding all our targets as we build a strong, sustainable future for Qantas and grow long-term shareholder value,” he said.
Lower fuel prices improved the airline’s position by $33 million.
“While fuel prices produced a modest benefit in the first half, we expect fuel costs for the full year to be no more than $4 billion at current prices which will see a significant boost to the bottom line in the second half of this year.”
Qantas Domestic recorded underlying earnings of $227 million, up $170 million on the previous period.
The Jetstar Group reported an underlying profit of $81 million, an improvement of $97 million.
Qantas said the group’s outlook for the second half of the year had improved, but that no profit guidance could be given “due to the high degree of volatility and uncertainty in global economic conditions”.
No dividend was declared.
