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Qantas soars to record $921m half-year profit Qantas soars to record $921m half-year profit
(about 1 hour later)
Lower oil prices has helped Qantas post a record underlying pre-tax profit of $921m Australian dollars ($665m; £470m) for the six months to December. Lower oil prices have helped Qantas post a record underlying pre-tax profit of $921m Australian dollars ($665m; £470m) for the six months to December.
The result is the best first-half profit in the Australian airline's 95-year history.The result is the best first-half profit in the Australian airline's 95-year history.
It was $554m higher than the same period in 2014. It was $554m higher than the same period in 2014 - an increase of 151%.
However, Qantas fell 5% in morning trading in Sydney despite announcing a A$500m share buyback.However, Qantas fell 5% in morning trading in Sydney despite announcing a A$500m share buyback.
The buyback is aimed at pushing up the value of its shares and shoring up investor sentiment.The buyback is aimed at pushing up the value of its shares and shoring up investor sentiment.
Evan Lucas, an IG Markets analyst, said the slide on Tuesday was partly due to a near-7% rise in oil prices overnight.Evan Lucas, an IG Markets analyst, said the slide on Tuesday was partly due to a near-7% rise in oil prices overnight.
"Qantas has forecast lower costs in the future due to lower oil prices globally, so the oil price rise overnight is impacting shares today," he said."Qantas has forecast lower costs in the future due to lower oil prices globally, so the oil price rise overnight is impacting shares today," he said.
Investor disappointment
Airline expert Ellis Taylor from Flightglobal said Tuesday's numbers were "a very strong result for Qantas", but that investors were likely to expect more capital returns through dividends rather than share buybacks.
"Last time Qantas announced a share buyback we also saw the share price fall, and I think the perception is that, with some good franking credits up their sleeve, that Qantas should really look to pay fully or partially-franked dividends rather than on-market share buybacks," he said.
"The airline hasn't indicated that it plans to really have a dividend policy, and in that light I think there are some investors who are happy to take their profits for now and leave it at that."
Turnaround
In 2014, Qantas reported its biggest annual loss and has since been focused on cutting costs and boosting its bottom line. Mr Joyce predicted the airline would return to profit the following year.
In December the airline said it expected to report better-than-expected profits for the period due to lower oil prices and a continued focus on its revival plans and forecast a figure of about $875m for the period.In December the airline said it expected to report better-than-expected profits for the period due to lower oil prices and a continued focus on its revival plans and forecast a figure of about $875m for the period.
"Without a focus on revenue, costs and balance sheet strength, today's result would not have been possible," said chief executive Alan Joyce on Tuesday."Without a focus on revenue, costs and balance sheet strength, today's result would not have been possible," said chief executive Alan Joyce on Tuesday.
"Both globally and domestically, the aviation industry is intensely competitive. That's why it's so important that we maintain our cost discipline, invest to grow revenue, and continue innovating with new ventures and technology.""Both globally and domestically, the aviation industry is intensely competitive. That's why it's so important that we maintain our cost discipline, invest to grow revenue, and continue innovating with new ventures and technology."
In the year to June 2015, Qantas posted a return to annual profit and announced plans to buy new planes. Qantas posted a return to annual profit for the year to June 2015 and announced plans to buy new planes.
Underlying pre-tax profit came in at A$975m, compared with a loss of A$646m for the year earlier.Underlying pre-tax profit came in at A$975m, compared with a loss of A$646m for the year earlier.
The company said it would not give annual profit guidance due to "industry and economic dynamics".The company said it would not give annual profit guidance due to "industry and economic dynamics".