In news that’s great for the industry and shareholders alike, Qantas has reported positive financial results for the half year of 2016, with solid profits across the group.
Qantas today reported an Underlying Profit Before Tax of $852 million and a Statutory Profit Before Tax of $715 million for the six months ended 31 December 2016.
These results reflect a strong performance in a mixed global aviation market, with the national carrier’s integrated Group strategy and ongoing transformation enabling it to keep delivering value for shareholders while investing for customers.
All areas of the Qantas Group were profitable in the half. Combined domestic airline earnings across Qantas and Jetstar were $522 million, while Qantas Loyalty had a record result, giving the Group a strong, profitable core in an improving Australian economy.
The Jetstar Group as a whole also had a record result. Qantas International’s profitability is impacted by the high levels of capacity growth affecting all major airlines, but it achieved significantly higher margins than the industry average.
Although the underlying result was down 7.5 per cent compared with the prior corresponding period, the results are above the guidance range provided in October last year.
“Qantas and Jetstar’s domestic operations produced an outstanding result and Qantas Loyalty continued to thrive. It’s a combination that keeps delivering and sets us apart from our competitors.”
Alan Joyce, CEO, Qantas.
“Our focus is to stay disciplined on capacity, keep downward pressure on costs, and introduce game-changing improvements like the Dreamliner and high-speed Wi-Fi.
“This result is a credit to the hard work and dedication of our people, who have helped deliver high levels of customer satisfaction right across Qantas, Jetstar and Loyalty.” Joyce said.
For shareholders, the results are also great news. The Qantas Board has declared an interim dividend of 7 cents per share, 50 per cent franked, to be paid on 10 April 2017. This is in addition to completing the remaining $91 million of the $366 million on-market share buy-back announced in August 2016.
Once these distributions are complete, Qantas will have returned more than $1.6 billion in capital to shareholders since July 2015 – and reduced the number of Qantas shares by approximately 18 per cent.
Where Qantas has surplus capital available, it intends to continue paying a dividend every six months – to be supplemented with other capital management initiatives should additional surplus exist.
So what’s in store for the Flying Kangaroo’s future?
In addition to the introduction of a new next generation Premium Economy seat, Qantas will continue to invest well into 2017 and beyond, with new lounges to open in Brisbane Domestic and London Heathrow, as well as the entry into service of the Qantas Boeing 787-9 Dreamliner, which will enable the retirement of older 747s.