Qantas profit down on fuel
From: The Australian
http://finance.news.com.au/story/0,10166,18165594-462,00.html
Qantas Airways has reported a first half net profit of $352.6 million, which was lower than the $390.2 million profit it made from the same period last year.
Qantas (qan.ASX:Quote,News) said it's making changes to improve the efficiency of its business .. but the extraordinarily high cost of jet fuel is having a substantial impact.
The airline's profit for the six months ended December 31, which equated to a 9.6 per cent decline on the same period last year, included the impact of a one-off restructuring cost of $69.9 million.
"The result was achieved in very difficult trading conditions, with fuel prices increasing costs by $689.8 million before hedging benefits of $214.7 million, and aggressive competitor capacity increases in the international market," Qantas said.
Chief executive Officer Mr Geoff Dixon said Qantas' performance, like other airlines, was more and more being influenced on an ongoing basis by the price of fuel.
"Fuel costs climbed by 58 per cent in the half year and represented 28 per cent of our net expenditure," he said.
"All our business transformation initiatives are now focused on enabling Qantas to meet its future expenditure commitments and profit projections with a fuel cost above $US60 a barrel," he said.
But Mr Dixon warned that Qantas would continue to cut jobs as it made further efforts to protect profits.
"As we make these changes, job losses across various areas of the business will be inevitable," he said.
"Importantly, job growth will also occur in other areas as our major investments grow the company."
Mr Dixon said the Federal Government's new industrial relations legislation would give Qantas greater flexibility.
Qantas shed 600 jobs in the first half under its restructuring program.
Group revenue for the half year was $6.8 billion, up 8.5 per cent on last year.
Net passenger revenue, including fuel charges on tickets, rose 10.1 per cent to $5.3 billion.
The airline's expenditure was $6.4 billion - a rise of 9.6 per cent - and reflected the impact of fuel costs which rose 58 per cent.
Qantas said its low cost airline Jetstar generated earnings before interest and tax (EBIT) or $27.7 million, up 45.6 per cent.
The result was in line with capacity growth of 46 per cent following the expansion of Jetstar's networks.
But Australian Airlines made an EBIT loss of $6.9 million, compared to a profit of $8.5 million in the previous first half.
"The result reflected tough trading conditions, particularly within the Japan market, the impact of schedule cancellations following the October 2005 Bali bombings and higher fuel costs," Qantas said.
The travel agency arm Qantas Holiday contributed EBIT of $18.4 million, down 32.1 per cent, due increased competition and higher usage of on-line booking by passengers.
Qantas Flight Catering reported EBIT of $16.1 million, up 34.2 per cent.
Qantas declared an interim dividend of 11c, up from 10c last year.
Chairman Margaret Jackson said the increased dividend reflected the confidence of the board and management in the airline's future.
"We believe we can continue to grow and invest profitably despite the obvious challenges faced by the industry in all parts of the world," she said.
Ms Jackson also praised the efforts of Qantas staff.
"Despite publicity about job losses and some negative Union comments about Qantas, the facts are that very few Australian companies invest like we do in the growth of the nation or grow employment so consistently, and no other company has better overall employment conditions," she said.
Qantas shares were down 5c to $4 at 1015 AEDT.
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From: The Australian
http://finance.news.com.au/story/0,10166,18165594-462,00.html
Qantas Airways has reported a first half net profit of $352.6 million, which was lower than the $390.2 million profit it made from the same period last year.
Qantas (qan.ASX:Quote,News) said it's making changes to improve the efficiency of its business .. but the extraordinarily high cost of jet fuel is having a substantial impact.
The airline's profit for the six months ended December 31, which equated to a 9.6 per cent decline on the same period last year, included the impact of a one-off restructuring cost of $69.9 million.
"The result was achieved in very difficult trading conditions, with fuel prices increasing costs by $689.8 million before hedging benefits of $214.7 million, and aggressive competitor capacity increases in the international market," Qantas said.
Chief executive Officer Mr Geoff Dixon said Qantas' performance, like other airlines, was more and more being influenced on an ongoing basis by the price of fuel.
"Fuel costs climbed by 58 per cent in the half year and represented 28 per cent of our net expenditure," he said.
"All our business transformation initiatives are now focused on enabling Qantas to meet its future expenditure commitments and profit projections with a fuel cost above $US60 a barrel," he said.
But Mr Dixon warned that Qantas would continue to cut jobs as it made further efforts to protect profits.
"As we make these changes, job losses across various areas of the business will be inevitable," he said.
"Importantly, job growth will also occur in other areas as our major investments grow the company."
Mr Dixon said the Federal Government's new industrial relations legislation would give Qantas greater flexibility.
Qantas shed 600 jobs in the first half under its restructuring program.
Group revenue for the half year was $6.8 billion, up 8.5 per cent on last year.
Net passenger revenue, including fuel charges on tickets, rose 10.1 per cent to $5.3 billion.
The airline's expenditure was $6.4 billion - a rise of 9.6 per cent - and reflected the impact of fuel costs which rose 58 per cent.
Qantas said its low cost airline Jetstar generated earnings before interest and tax (EBIT) or $27.7 million, up 45.6 per cent.
The result was in line with capacity growth of 46 per cent following the expansion of Jetstar's networks.
But Australian Airlines made an EBIT loss of $6.9 million, compared to a profit of $8.5 million in the previous first half.
"The result reflected tough trading conditions, particularly within the Japan market, the impact of schedule cancellations following the October 2005 Bali bombings and higher fuel costs," Qantas said.
The travel agency arm Qantas Holiday contributed EBIT of $18.4 million, down 32.1 per cent, due increased competition and higher usage of on-line booking by passengers.
Qantas Flight Catering reported EBIT of $16.1 million, up 34.2 per cent.
Qantas declared an interim dividend of 11c, up from 10c last year.
Chairman Margaret Jackson said the increased dividend reflected the confidence of the board and management in the airline's future.
"We believe we can continue to grow and invest profitably despite the obvious challenges faced by the industry in all parts of the world," she said.
Ms Jackson also praised the efforts of Qantas staff.
"Despite publicity about job losses and some negative Union comments about Qantas, the facts are that very few Australian companies invest like we do in the growth of the nation or grow employment so consistently, and no other company has better overall employment conditions," she said.
Qantas shares were down 5c to $4 at 1015 AEDT.
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