Qantas bounces back with half-yearly profit

Qantas has turned its fortunes around one year after asking the government for financial assistance.
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Qantas has reported a first-half underlying profit before tax of $367 million, which is above the guidance range of $300 million to $350 million it had provided to the market in December and a major turnaround from the $252 million pretax loss in the year-earlier period.
All operating segments, including the airline's international division, returned to an operating profit. The company did not declare an interim dividend.
The airline's results were buoyed by cost-cutting, lower fuel prices, the removal of the carbon tax, lower depreciation charges and better conditions in the domestic and international markets
Qantas chief executive Alan Joyce: 'Without the impact of transformation, we would not be announcing a profit today.' Qantas chief executive Alan Joyce: 'Without the impact of transformation, we would not be announcing a profit today.' Photo: Louise Kennerley
On a net profit line, Qantas reported a statutory profit after tax of $204 million in the half, compared with a $235 million statutory loss in the previous year.
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Chief executive Alan Joyce said the result showed the airline was executing the right turnaround plan with discipline and speed.
"The decisive factor in our best half-year result for four years was our complete focus on the Qantas Transformation program," Mr Joyce said. "It's clear that without the impact of transformation, we would not be announcing a profit today.
On a net profit line, Qantas reported a statutory profit after tax of $204 million in the half. On a net profit line, Qantas reported a statutory profit after tax of $204 million in the half.
The factors that helped drive the return to profit included a $374 million benefit from cost-cutting, $208 million from reduced depreciation, $162 million from increased revenue per seat kilometre, $59 million from the removal of the carbon tax and $33 million from lower fuel prices.
Qantas shares were trading 12c higher at $2.93 at 11:15am on Thursday.
"We expect the positive share price momentum to continue for Qantas as the transformation benefits continue to deliver and the benefit of the lower oil price," Citi analyst Anthony Moulder said. "Given the lower oil expense being indicated, as well as the lower depreciation expense and coupled with the higher transformation savings, the strong momentum of the Qantas share price is expected to continue."
Most analysts had expected Qantas would report a full-year depreciation benefit of about $250 million after making larger write-downs last year, but they may not have factored in benefits from retiring the carrier's aging Boeing 767 fleet during the half.
Qantas said it was now targeting $675 million of benefits from its cost-cutting program for the full year, up from an earlier target of $600 million.