Qantas dumps dividend, cites uncertainty
SYDNEY – Qantas Airways disappointed its shareholders yesterday by decling to pay a dividend.
“The Qantas financial report for the six months to December 31 contains some sobering figures as well as some reasons for optimism, but basically, Jetstar is booming, mainline isn’t and shareholders get nothing by way of dividends,†said aviation analyst Ben Sandilands in his Plane Talking blog.
The airline, said there were some signs of improvement by the end of the second quarter, but increased fuel and depreciation costs would be felt in the second half.
“Remaining uncertainty in the economic outlook, particularly in international markets, industry capacity, passenger and freight demand and high levels of volatility in fuel prices and exchange rates continues,” the company said in a statement.
Qantas said it expects underlying profit before tax for the full year of between $300 million and $400 million, if there are no further significant changes in market conditions and fuel prices.
Underlying profit before tax rose to $267 million in the first half, with an accounting change adding an extra $78 million, while statutory net profit before tax in the half was $90 million compared with the group forecast range of $50 million to $150 million.
Net profit after tax fell to $58 million for the six months to December from $210 million a year earlier.
Chief executive Alan Joyce defended the result, contrasting Qantas’ profitability against global aviation industry losses.
‘”While the operating environment has been unprecedented and challenging, this result reflects the strength and diversity of our operations,” Joyce said in a statement.
“In this context, coupled with a significant capital expenditure programme associated with fleet renewal, the board considers it prudent not to pay an interim dividend, and future dividends will be assessed against ongoing earnings performance and capital requirements.”
First half revenue totalled $6.91 billion, down from $8.07 billion in the prior corresponding period.
Joyce said Jetstar had a record half-year, delivering improved profitability while increasing capacity by 32.9 per cent across its network.
“Jetstar has continued to develop as a highly successful pan-Asian brand and innovative low fares leader,†he said. “We remain committed to Jetstar’s expansion in Asia, including Vietnam.â€
Ian Jarrett
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