Qantas posted a record full year underlying profit of $1.53 billion, a 57% improvement, completing one of Australia’s biggest corporate turnarounds.
Just two years ago, the national airline reported a $2.8 billion loss.
Today, Qantas returned to paying dividends for the first time since 2009, declaring a fully franked final dividend of seven cents a share, totalling $134 million, and an on-market share buy-back of up to $366 million.
“Qantas is stronger than ever, but we’re also determined to keep changing and adapting so that we can succeed no matter what environment we’re in,” says CEO Alan Joyce.
“This is the best result in the 95 year history of Qantas — and the best result in Australian aviation history, full stop.”
Qantas shares were up 4.5% to $3.55 in early trade.
Statutory profit was up 84% to $1.03 billion on a 2.4% rise in revenue to $16.2 billion.
And earnings per share almost doubled to 49 cents from 24 cents.
Qantas Domestic, Qantas International, Jetstar Group and Qantas Loyalty all reported record results.
The big improvers were Jetstar with a 97% rise in EBIT (earnings before interest and taxes) to $452 million and Qantas International with a 92% improvement to $512 million. Qantas Domestic was up 20% to $578 million.
The staff will benefit. About 25,000 of them are eligible for a one-off $3,000 record result bonus if they were included in the airline’s 18-month pay freeze.
Qantas is benefiting from an ongoing transformation program which aims to strip out $2 billion in costs, lower fuel prices and an end to a domestic seat price war with Virgin Australia.
“Our transformation program is paying dividends for our shareholders, our customers and our employees,” says Joyce.
“Our people can be incredibly proud of what they’ve achieved. It’s thanks to their skill and commitment that we’re announcing a record profit today.
“This was a true team performance, which shows that our strategy is the right one for the tough markets we’re operating in and the long-term opportunities we see ahead of us.”
The 2016 results in detail:
Joyce says Qantas expects to continue its strong financial performance in the first half of the 2017 financial.
“We are focused on preserving high operating margins through the delivery of the Qantas transformation program, careful capacity management, and the benefit of low fuel prices locked in through our hedging,” he says.
Qantas is planning for capacity growth of 2% to 3% in the first half of the 2017 financial year 2017. Earlier this year it started cutting capacity due to negative sentiment caused b y the federal election.
Full year benefits from cost cutting and fuel efficiency are expected to be $450 million.