QF Half Year Profit Announced

[Wod]

About Qantas - Media Room - Media Releases (http://www.qantas.com.au/regions/dyn/au/publicaffairs/details?ArticleID=2010/feb10/4016)

Some selected bits


* Statutory Net Profit Before Tax of $90 million
* Underlying Profit Before Tax (PBT)1 of $267 million
* Revenue of $6.9 billion
* Operating cashflow of $483 million
* Cash balance of $3.5 billion
* Statutory earnings per share of 2.6 cents
* No interim dividend




"Qantas uses Underlying PBT to assess the performance of the Group and its segments by matching all hedge derivative gains and losses in the same reporting period as the underlying exposures being hedged. In addition, Qantas removes the impact of non-recurring items to assess the underlying quality of returns.
"In the future, we will now provide any future guidance to Underlying PBT as it reflects the operational performance of the business that can be more accurately forecast."

[Ultergra]

This solid half yearly profit coupled with Qantas set to celebrate their 90th birthday this year, QF is starting to fire up.

The worlds oldest continually operating aviation company also hold the best on time performance in Australia for 2009. This applies to both on time departures and on time arrival.

Good job everyone at the mighty Q, keep up the great work! :ok:

[denabol]

You must be daft. I've just waded through all the underlying profit crap in all the stuff posted on the ASX, and it says there is no more standard profit guidance being given only some new form of horse**** that says it really made $267 million not $90 million like they had to report to be legal, and yet can't pay a dividend when last February when QAN paid 6 cents a share on a profit of $288 million. What the ****. I've had no dividend since then, even though they say they are making an underlying profit nearly three times bigger than the $90 million they actually reported.

[blueloo]

Qantas set to celebrate their 90th birthday this year, QF is starting to fire up


Wonder if they will invite some Pilots or engineers to the 90th Birthday bash....you know some of the folk who have actually helped the Company to make it to 90 years....... oh foolish me, it will just be for the leeches and hangers on!!! Just like the 85th bash.

[Jabawocky]

3.87% profit on revenue is not that flash. Thats a sneeze away from making a loss! :ouch:

And what about return in investment :confused:

[Ultergra]

If you're not happy there blueloo, leave.

If you feel unappreciated, see a councillor or something.

[RedTBar]

blueloo,Everyone who works at QF has helped achieve that result not just pilots and engineers.

Jabawocky,considering the economic climate a profit is a profit.How many other airlines posted a loss?
It's been said before about creative accounting.I wonder how much Jetstar operating costs covered by the parent is offset by the revenue made by jetstar?

It would be interesting to see both airlines operating under their own steam:oh:

[blueloo]

Ultergra
If you're not happy there blueloo, leave

You make 'vely' funny funny joke. Ha ha.

You should be a comedian. Maybe they will pay you double?

RedTbar: I thought everyone else got an invite? What you mean you didnt either? Astonishing! :}

[LetsGoRated]

It would be interesting to see both airlines operating under their own steam

Interesting yes, but not particularly helpful for the bottom line of the Qantas group.

[Torres]

I've just waded through all the underlying profit crap in all the stuff posted on the ASX, and it says there is no more standard profit guidance being given only some new form of horse**** that says it really made $267 million not $90 million...

I hope he flies an aircraft better than he understands financial accounting. :ugh:

Jabba, the pre-tax profit it is actually 1.3% margin on total revenue of $6.9 Bn.

Statutory earnings per share of 2.6 cents

Which, at the current share price, equates to a 0.96% return on share holder investment!!

QAN margin is extremely "thin". Fortunately increased demand for air travel should see improved results in the current half year.

RedTBar, the Jetstar versus Qantas debate is irrelevent as JetStar is merely a business unit within Qantas/QAN - the financial results reflect the consolidated performance of the entire Group.

If your suggestion that JetStar under performed financially were correct, the same arguement could be used to cut or terminate low yield Qantas flights and the group should concentrate only on high yield, high profitability flight sectors.

And we all know that can't happen.........

But you are correct, Qantas made a profit and the prognosis for the future must be for improved financial performance.

[hotnhigh]

Highlights of Result - Operational
�� Effective capacity management in Qantas and Jetstar
�� Qantas reduced 9.6%, Jetstar increased 32.9%

Highlight alright!

[Mr Whippy]

I love this bit from the media release:

“Current accounting rules result in certain material movements of hedge derivatives being
recognised in periods that differ from the underlying exposures,” he said.
“This results in significant earnings volatility and does not reflect the underlying economic
outcomes of the Group’s hedging strategy.
“Qantas uses Underlying PBT to assess the performance of the Group and its segments by
matching all hedge derivative gains and losses in the same reporting period as the underlying
exposures being hedged. In addition, Qantas removes the impact of non-recurring items to
assess the underlying quality of returns.

In other words they've found a way to try and fool the public that $90m is actually $267m. I'd bet anything that if this measure gave a lower result then it wouldn't have been reported.

The rhetoric and spin in this press release is unbelievable - must be a flurry at QCC at the moment as management types scramble to get their kpi's adjusted.

Anyway the market hasn't fallen for it with the share price down 24c.

[1/2 bank]

No wonder they have not spun off the Frequent Flyer business yet, they can't afford to, it is propping the rest of the Company up.

In the December (first) half Qantas's frequent-flyer operations accounted for more EBIT (a record $157m) than either the core Qantas business ($60m) or Jetstar (also a record at $121m).

Qantas headwinds remain | The Australian (http://www.theaustralian.com.au/business/opinion/qantas-headwinds-remain/story-e6frg9lo-1225831762498)

[crocodile redundee]

Very disappointing!!!! The Shareholders not impressed!!!! Writing is on the wall methinks. I always thought that any airline which bought the A380 would be in trouble in a downturn. Exactly whats happened. Cant make money when they are only half full. Lets hope the world gets back on its feet in next few years.......& QF stays accident free!!!!!!!

[argusmoon]

I remember being in LHR when the 75th birthday bash occurred.
As CC we were invited along, but in uniform, so we could serve the canapes
We respectfully declined.
These happenings are only for the groundhogs.Much back slapping and wet pockets from people who have never met a qantas customer.
As far as profit goes,profit no matter how small, is still preferable to a loss

[3 Holer]

3.87% profit on revenue is not that flash. Thats a sneeze away from making a loss!

I suspect that's why there will be no interim dividend Jaba!:{

I always thought that any airline which bought the A380 would be in trouble in a downturn.

Is that why VA went with the 777 ? :D

[Jabawocky]

Torres

I was too scared to calculate it on the pre tax ammount, the gross profit before the write downs of extra ordinary things (whatever it is they have hidden in there) is a far better gauge of how the company is trading in my simple mind.

Its still a scary result either way.

J:ok:

[Torres]

A few of the old biased prejudices being expressed here......

The facts are simple:

Qantas weathered the GFC and returned a marginal profit;
Qantas financial performance in the first half was infinitely better than the majority of world airlines - British Airways for example;
With increasing demand for air travel, one would expect Qantas second half performance should show a significant improvement.


No doubt Qantas benefited from the strong performance of the Australian economy and minimal impact of the GFC on Australia.

[indamiddle]

statutory profit $90m
underlying profit $267m
difference between the two figures
1/ stat profit is signed off by the auditors
2/ underlying profit is not signed off by auditors.
a mate of mine (accountant) has always said underlying profit is creative accounting by the in house bean counters as directed by the board. the most important part is 'underlying'. note the word 'lying', says it all.
imagine the screaming from QF if the ATO suddenly decided to use underlying profit as the taxable base, figures would suddenly change!
maybe word should be changed to 'overlying'

[p.j.m]

No wonder they have not spun off the Frequent Flyer business yet, they can't afford to, it is propping the rest of the Company up.

Amazing, is the current management actually looking at the company from a long term perspective?

Flogging it off this year and adding $157m to the bottom line, would be the norm for most of the current crop of "greed id good" CEO's. Not to worry that next year the company would suffer a $100m loss as a result.

[Pedota]

Qantas' results as described in today's Air Line Transport World (Geoffrey Thomas). Interesting that JQ's contributed twice as much to the bottom line (EBIT) than QF ($121m v's $60m) - bold italic below (my emphasis).


Qantas to eliminate most first class service as half-year profit plunges
Friday February 19, 2010

Airline Transport World - Geoffrey Thomas

Qantas yesterday reported a A$58 million ($52.2 million) profit for the half-year ended Dec. 31, down 72% from the A$210 million earned in the year-ago semester, and announced the elimination of first class service to all but two destinations in an effort to lift yield.

The group result would have been a loss but for the contribution of low-cost subsidiary Jetstar Airways, which trebled its earnings, and the frequent-flyer program that doubled earnings. Consolidated revenue slumped 14% to A$6.09 billion while costs declined 15% to A$6.76 billion. Operating profit sank 48% to A$143 million from A$274 million in the first half of fiscal 2008-09.

The Qantas mainline unit posted EBIT of A$60 million, down 63.33% year-over-year, while Jetstar recorded a thumping 181% lift in EBIT to A$121 million. The loyalty program reported EBIT of A$157 million.

Group traffic increased 1.2% to 51.49 billion RPKs against a 2.2% decline in capacity to 62.47 billion ASKs. Load factor improved 2.7 points to 82.4% but yield decreased 14.9% to A10.28 cents. There were some significant differences within those numbers, with Qantas International suffering an 8.9% drop in RPKs to 25.73 billion while Jetstar International experienced a 40.2% leap to 5.53 billion. The group's fleet numbered 237 aircraft at period end, up from 226 the previous year.

Qantas announced that it has committed A$400 million to reconfigure and enhance its A380s and nine 747-400s. It will eliminate first class on all long-haul aircraft except for 12 A380s that will be dedicated to Los Angeles and UK service. Those A380s, however, will be reconfigured with fewer business class and more premium economy and economy seats. From 2012, the remaining eight A380s on order will be delivered in a three-class, 550-seat configuration with no first class. QF will revamp its newest 747-400s, including its six 747-400ERs, in a 359-seat configuration comprising 58 business, 36 premium economy and 265 economy seats.

CEO Alan Joyce told ATWOnline that the outlook remains tough on the international front, with "the UK and US still weak." While declining to provide specifics, he said QF's "international operations are losing money while domestic is making money." He added that "passenger revenue in the second half of this financial year is expected to be higher than the first half as yield continues to improve. Our yield in the month of December had recovered 16.5% from the lows in August." For the full year the company is forecasting an operating profit in the A$300-A$400 million range.

[Mr. Hat]

Joyce warned fares would rise next year

Most common sense thing I've read in years. Its cheaper to get a plane than a taxi. Enoughs enough.

[stubby jumbo]

We had a "manager" come into our briefing this morning ( day trip) to give us the "real " version of the profit figures.

.........'straight out of the Mr Geoff Dixon Cook Book- How to keep the masses down !

Oh its bad, oh its really bad, we need to cut back, we need to reduce costs, oh the market is poor, oh we are taking off P/C, geeze we may not make our Q Future targets.

So you can imagine -how we were feeling when the punters rolled in at Left 1.:{:{

Ok - the figures weren't great. But surely in the context of the rest of the world airlines ( many of whom are govt backed)-not bad. :D

So pleeeze......enough of the negative spin

[ratpoison]

The worlds oldest continually operating aviation company
Quite a bullsh*t statement there ULTERGRA. You had better do a little more homework and think outside the box of Oz before posting. If only you were around 70 years ago and living in Germany, you would have excelled at the brainwashing of the Nazi propaganda. :cool:

[Wod]

Quote:
The worlds oldest continually operating aviation company
Quite a bullsh*t statement there ULTERGRA
.

Bit overstated ratpoison. I thought there was a consensus that by most measures QF was second after KLM. Same name, essentially same entity over time.

[3 Holer]

Interesting article (http://money.ninemsn.com.au/blog.aspx?blogentryid=601528&showcomments=true#ugc_comments) in today's Money brief.

I loved this paragraph: Meanwhile, Barry Jackson, president of the Qantas pilots' association, had just convinced his fellow pilots to slash $8 million off their wages in order to save 67 jobs.

"We ended up getting enough volunteers to offset some of the potential redundancies," he told the SMH. "Just when we'd completed that, the company offers the departing chief executive $10.7 million".



I thought it was the Jetstar pilots who were getting screwed?

[Jetsbest]

"Noone took a 'paycut' as such..."

I must have missed something? Given QF's implied message that "if we don't save 8mil we can't promise to avoid redundancies", how does more time at home pay the pilot's mortgage when their income is substantially less? :rolleyes:

[Cactusjack]

Keep on eye on JQ Asia. Lots of scurrying happenning behind the scenes within the QF Group.The Auditors have almost finished, but a lot of 'cleaning' is still being done.
New appointments, structures and direction coming very shortly. Even one of the new blood who after just a month of taking over from those those who are still 'confined to barracks' up there has pulled the pin and run away....All very messy.
Probably what is needed are some consultants on a decent retainer, anybody know of any ?

[QFinsider]

Get that fool buchanan from Boston Consulting Group...oh that's right he is CEO of the whole crappy mess.....

[stubby jumbo]

How about we bring in da' boys from.....F-TROOP.

Now thats a formidable team of consultants.:D

They all have had - "Asian experience",can speak the lingo ( ni hao ) and like to eat sweet & sour pork.

Pay them in Vietnamese Dong and grab their passports on arrival- until the "mess" is fixed.

xie xie

[Mstr Caution]

Jetstar Expects Lower Costs as Demand Boosts Traffic (Update2) - Bloomberg.com (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0wrEW.OwG_c)

Could someone more business savvy then myself, please explain this one to me. Am I missing something?

When queried by the interviewer on projections. What passenger numbers going forward, the number of seats your (J*) likely to sell?

Buchanan responded. "Ahh, we haven't made any projections on J* numbers."

Wouldn't forward projections be critical for any business, especially if you were planning agressive growth.

Also, nice to hear it straight from the J* CEO that they effectively "pool" with mainline on fuel hedging, cash & treasury functions.

[Pedota]

Looks like a return to 'normal airfares' is still a while off . . . my bold/italics.





March air fares cheapest on record

The Age
Andrew Heasley
March 23, 2010

Savvy air travellers are bagging the cheapest air fares on record, but airlines are quietly pushing up the price of other classes of travel, according to financial analysts.

Based on an examination of air fare data from the Bureau of Infrastructure, Transport and Regional Economics, air fares in March are at a record 17-year low (the entire time records have been kept), and 13.2 per cent lower on average than a year ago, CommSec analysts have found.

When the cost of living is taken into account, real airfares are even cheaper, 15.1 per cent lower than a year ago.

The analysts looked at the bureau's "smoothed" 13-month averages, which takes out distortions caused by seasonal volatility in fares.

"It has never been cheaper to fly – that is, if you are prepared to shop around for the best deals," says CommSec's Chief Economist and author of the analysis, Craig James.

"Aussie consumers are very price conscious at present and are scouring for the best deals. As a result, airlines are being forced to keep fares low in order to fill up their planes."

But full economy and business class fares are another story.
Business class fares have crept up almost 7 per cent from their low in September last year.

"Airlines are no doubt hoping that improved economic times will lead to less price-conscious customers, especially from businesses," Mr James says.
While these airfares are creeping higher, they're still cheaper than they were before the global financial crisis hit.

"Business class fares are around 5 per cent down on late 2008 highs while full economy fares are down 11 per cent from their peaks," Mr James says.

"While companies are moving their staff around the country again for sales meetings and conferences, they remain cost-conscious, preventing airlines from lifting fares too far, too fast."