Share buyback as Qantas half-year profit triples

Sydney / AFP

Australian carrier Qantas on Tuesday said first-half net profit soared 234 percent on the back of belt-tightening and lower oil prices, as it announced a Aus$500 million stock buyback to share the spoils with investors.
The Aus$688 million (US$497 million) result comes on the heels of a ruthless cost-cutting drive that has seen thousands of jobs axed and aircraft deliveries deferred in recent years to stem mounting losses.
Underlying profit before tax in the six months to December 31 — the airline’s preferred measure of financial performance — was Aus$921 million, at the upper end of analyst expectations, while revenue rose five percent.
The result was boosted by Aus$448 million in savings through the airline hedging on lower fuel prices.
“This record result reflects a stronger, leaner, more agile Qantas,” said chief executive Alan Joyce, who declared his intention to stay with the airline indefinitely. “Without a focus on revenue, costs and balance sheet strength, today’s result would not have been possible. 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,” said Joyce.
Despite the buoyant numbers Qantas shares, which have rallied strongly over the past 12 months, were down 4.76 percent at Aus$3.80 in afternoon trade.
“Its shares are falling after its decision to not pay a dividend,” said Commsec analyst Steven Daghlian, although other market watchers suggested it could also be related to a rise in oil prices overnight. The bottomline was boosted by strong performances across almost all of the airline’s divisions, with both domestic and international operations.