Qantas Airways Limited (ASX: QAN) released its 2018 financial results to the market today revealing a 15% increase in net profit.
Qantas is Australia’s largest airline by fleet size, international flights and international destinations. It also operates the budget airline Jetstar.
Here are some of the highlights from its report:
- Revenue up 6.2% to $17 billion
- Underlying net profit before tax up 14.5% to $1.6 billion
- Reported net profit up 15% to $980 million
- Full year dividend up 21% to 17 cents per share
According to Bloomberg, analysts were expecting Qantas to report a profit of $1.1 billion. A dividend of 14 cents per share was also expected. With the result below estimates investors appear to have been disappointed by the company’s performance.
Qantas was pleased to report that it achieved a 22% return on invested capital and its net free cash flow was up 10% to $1.44 billion. Along with a final dividend of 10 cents per share, it also has an ongoing on-market buyback of up to $332 million, meaning a total shareholder return of $500 million.
In a nice move for employees, 27,000 non-executive staff would receive a total bonus of $67 million, an average of nearly $2,500 per person.
CEO Alan Joyce said: “These numbers show a company that’s delivering across the board. Our investment in free WI-FI and cabin improvements are delivering a better experience for customers as well as higher earnings…This record comes despite higher oil prices.”
Outlook
The value of forward bookings was up 6.2% and the FY19 fuel cost is expected to be $3.92 billion. It will be spending approximately net $1 billion on capital expenditure.
Mr Joyce commented, “Our strong balance sheet, forward bookings and the demand environment give the Group confidence that we will substantially recover higher fuel costs. We expect to invest for the future and still deliver strong net free cash flow.”
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