QANTAS ANNOUNCES PROFIT RESULT, RESPONSE TO ECONOMIC CONDITIONS Highlights:
Strong portfolio performance:
o Continuing record results for Jetstar and Qantas Frequent Flyer.1 o Revenue growth of 6 per cent.
o Yield and unit cost improvements.
o Offset by industrial action and record high fuel costs.
Improvement in net operating cash flow of 5 per cent.
Strategic initiatives to transform Qantas International and grow Jetstar in Asia. SYDNEY, 16 February 2012: The Qantas Group today announced underlying profit before tax2 of $202 million for the half-year ended 31 December 2011, a decrease of $215 million compared with the prior corresponding period. Statutory profit before tax was $58 million.3
The result reflects the $194 million financial impact of industrial action during the first half, as well as increased fuel costs compared with the prior corresponding period. Total fuel costs in the half were $2.2 billion, up $444 million (or 26 per cent).
The Group also today outlined measures that respond to global economic conditions and the structural challenges facing Qantas, including the European finance crisis, the changing Australian economy and the need to increase efficiency and competitiveness. These steps will position the Group for a strong, sustainable future and build long-term shareholder value.
They include a reduction in capital expenditure of $700 million over 2011/12 and 2012/13; a review of Qantas’ heavy maintenance footprint in Australia; and changes to Qantas’ catering and engineering operations. Qantas Chief Executive Officer Alan Joyce said the first-half result was a good performance in challenging circumstances.
“The termination of industrial action on 31 October 2011 brought operational certainty for the Qantas Group, our customers and our shareholders,” Mr Joyce said.
“While the impact of the dispute was severe, our portfolio of businesses once again demonstrated its resilience in difficult conditions. Improvements in operating cash flow, revenue, yield and unit costs, and record results for Jetstar and Qantas Frequent Flyer, helped offset the financial effect on the Group.” Qantas Chief Executive Officer Alan Joyce said the Group was taking decisive action to meet the challenges of the changing global economy and aviation industry.
“We have a clear strategy for the future based on our strong domestic airline businesses, transforming Qantas International and other business areas, the continued growth of Qantas Frequent Flyer and growing Jetstar in Asia.
Normalised for prior period changes in accounting estimates (refer to page 10 for further details) Underlying PBT is a non-statutory measure used by management and the Group’s chief operating decision-making bodies as the primary measure to assess the financial performance of the Group and individual segments. Financial information reported in this document is on an underlying basis unless otherwise stated
A reconciliation of Statutory and Underlying PBT is provided on page 11
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Further information and media releases can be found at the Qantas website: qantas.com
“With a volatile world economy, disciplined financial management remains vital. Today we have set out a package of initiatives appropriate both to the current conditions and our long-term goals. “At Qantas we know we must continue to adapt to the complex economic and competitive environment. That means taking hard decisions today to ensure that we can secure jobs and success for the future.” Segment financial performance
Qantas’ underlying EBIT in the first half was $66 million, compared with $165 million in the prior corresponding period.
“Qantas was hit hard by industrial action,” Mr Joyce said. “However, by late November bookings had recovered well – particularly in the domestic market. Qantas’ ontime performance was the best of any major domestic airline in December and we have retained and grown major corporate...
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