QANTAS annual result
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QANTAS annual result
This is due on the 12th of August and i cant help but wonder in light of the excellent financial result from Cathay with new orders announced if QF will be in a similar vein. Rumours abound of one 747 to come back from Victorville and the possibility of 25 787 to be delivered to Qantas starting in 2012 from a cancelled order from a US carrier. Would be wonderful if it was correct. Anyone have any news?
Nunc est bibendum
Perhaps this year, supposedly not the next.
...and I've absolute confidence that the most profitable business domestically, the way this is returning, within the next year to 18 months, will be Qantas mainline," Joyce said.
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Prediction
- Profit closer to $400m than $300m
- Subsidiary businesses (Frequent Flyer etc.) most profitable segment
- QF Mainline Domestic most profitable core business segment
- QF International a basket case
- JQ Domestic profitable
- JQ International a basket case
- JQ Asia break even \ basket case
- The costs that were to finally be apportioned to the real entity occuring them will not happen, despite plans to do so in order to show the real cost basis of each business.
Last edited by What The; 5th Aug 2010 at 05:14.
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I agree with What The. From what I see on a day to day basis I think it will be closer to the $400m mark.
QF Domestic seems to be going gang busters at the moment. I haven't seen too many flights with a lot of seats available. Has anyone tried staff travel to BNE ex MEL lately?
QF Int from what I've seen seems to be going ok, though not great. I only see a few ports, so can't comment on the overall operation. But I do think International has picked up a little since the 1/2 yearly results.
QF Domestic seems to be going gang busters at the moment. I haven't seen too many flights with a lot of seats available. Has anyone tried staff travel to BNE ex MEL lately?
QF Int from what I've seen seems to be going ok, though not great. I only see a few ports, so can't comment on the overall operation. But I do think International has picked up a little since the 1/2 yearly results.
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Some hefty number crunching taking place alright. Of particular intrest is the JQ Domestic figures, I heard from a reliable insider that that around 4 months ago they were break even, nil profit, which was surprising. It will be interesting to see what the accountants pull out of the bag. Interesting how David Hall has joined JQ`s ranks, perhaps Boston Bruce isn`t doing as well as expected ??
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$377 million before Tax
Media release and other data here
About Qantas - Investors
Some bits and pieces
.
and finally
I'll leave the Jetstar v. QF stuff to those who like to get excited about it.
About Qantas - Investors
Some bits and pieces
KEY POINTS
- Underlying Profit Before Tax of $377 million
- Revenue of $13.8 billion
- Operating cashflow of $1.3 billion
- Cash balance of $3.7 billion
- Unit costs down 4.3% across the Qantas Group, excluding fuel
- Underlying Profit Before Tax of $377 million
- Revenue of $13.8 billion
- Operating cashflow of $1.3 billion
- Cash balance of $3.7 billion
- Unit costs down 4.3% across the Qantas Group, excluding fuel
Significant Unit Cost Reductions
Operating expenses (excluding non-recurring items) were $968 million lower compared to the prior year, with substantial savings in fuel and manpower. Also included were QFuture savings of $533 million achieved during the year. This translated to a 4.3 per cent reduction in net underlying unit costs from 5.80 c/ASK in 2009 to 5.55 in the current year.
Fuel costs benefited from lower average prices, with into plane fuel price being 13 per cent lower than 2009
Operating expenses (excluding non-recurring items) were $968 million lower compared to the prior year, with substantial savings in fuel and manpower. Also included were QFuture savings of $533 million achieved during the year. This translated to a 4.3 per cent reduction in net underlying unit costs from 5.80 c/ASK in 2009 to 5.55 in the current year.
Fuel costs benefited from lower average prices, with into plane fuel price being 13 per cent lower than 2009
During the year, the Group entered 23 new aircraft into service:
- Qantas and QantasLink – 3 A380s, 1 A330-200, 3 B737-800s, 7 Bombardier Q400s
- Jetstar, including Jetstar Asia – 1 A330-200, 6 A320-200s, 2 A321-200s
The Group retired 9 aircraft – 3 B747-400s, 3 B767-300ERs and 3 B737-300s.
- Qantas and QantasLink – 3 A380s, 1 A330-200, 3 B737-800s, 7 Bombardier Q400s
- Jetstar, including Jetstar Asia – 1 A330-200, 6 A320-200s, 2 A321-200s
The Group retired 9 aircraft – 3 B747-400s, 3 B767-300ERs and 3 B737-300s.
Qantas Freight’s Underlying EBIT of $42 million was $35 million above the comparative year. The significant improvement reflects recovery in the air freight market since November 2009.
The freighter network has shown strong recovery of volumes and yields on the key China-US routes. This is due to restocking of retail inventories and the global launch of new electronic devices. This was the most profitable year for Qantas freighters.
The belly space freight market has been slower to recover. Volumes are improving but, due to intense competition, yields remain lower than the prior year.
The freighter network has shown strong recovery of volumes and yields on the key China-US routes. This is due to restocking of retail inventories and the global launch of new electronic devices. This was the most profitable year for Qantas freighters.
The belly space freight market has been slower to recover. Volumes are improving but, due to intense competition, yields remain lower than the prior year.
Dividend
The Board remains focused on balancing funding requirements of the business and investing for future growth with providing dividends for shareholders.
In this context, coupled with significant capital expenditure program associated with fleet renewal, the Board considers it prudent not to pay a final dividend. Future dividends will be assessed against ongoing earnings performance and capital requirements.
The Board remains focused on balancing funding requirements of the business and investing for future growth with providing dividends for shareholders.
In this context, coupled with significant capital expenditure program associated with fleet renewal, the Board considers it prudent not to pay a final dividend. Future dividends will be assessed against ongoing earnings performance and capital requirements.
If present conditions continue, first half Underlying PBT for FY11 may be materially stronger than first half FY10.
I'll leave the Jetstar v. QF stuff to those who like to get excited about it.
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For Pete's sake, not even the media is this dumb. The ABC just called it for the disaster it was, a profit of just over $178 million before tax, and none of this total bull**** underlying profit nonsense.
The whole flamin' outfit barely made as much money as Virgin Blue did from domestic a year ago, and I've looked at the ASX posting and most of the money came from flogging points for food at Woolies.
The whole flamin' outfit barely made as much money as Virgin Blue did from domestic a year ago, and I've looked at the ASX posting and most of the money came from flogging points for food at Woolies.
We have come out of the GFC and the Euro volcano drama, agreed. BUT low fuel prices, low interest rates, favourable exchange this is a PISS POUR result.
Some heads at QF need to roll. Time for a big clean up. Wake up to the fact that EK, SQ and the like have lower operating costs. Sack all the time wasters and extravagent expenses other wise Qantas will become another Japan Airlines.
Without JQ and the huge profit from comp payments for late delivery of new a/c and the FF program (ie selling points for dog food, nappies and bananas) QF would have a huge loss.
Lots of errors from the past - hanging onto the 743/744 fleet until they WERE scrap metal, failing to get the 777, waste on corporate indulgences, reliance on LHR and LAX for profits, excessive useless middle management that still need to go, etc
Wake up QF this is 2010 not 1990. Its a different world. The likes of EK, AirAsiaX and Tiger are biting the kangaroo's tail. Total Disaster Qantas
Some heads at QF need to roll. Time for a big clean up. Wake up to the fact that EK, SQ and the like have lower operating costs. Sack all the time wasters and extravagent expenses other wise Qantas will become another Japan Airlines.
Without JQ and the huge profit from comp payments for late delivery of new a/c and the FF program (ie selling points for dog food, nappies and bananas) QF would have a huge loss.
Lots of errors from the past - hanging onto the 743/744 fleet until they WERE scrap metal, failing to get the 777, waste on corporate indulgences, reliance on LHR and LAX for profits, excessive useless middle management that still need to go, etc
Wake up QF this is 2010 not 1990. Its a different world. The likes of EK, AirAsiaX and Tiger are biting the kangaroo's tail. Total Disaster Qantas
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The Result of Poor Dixon Management
When you offer an inferior product compared to your competitors this is the result you deserve
Aging aircraft
Totally FarQd IFE
Top heavy with management
Incentive bonuses for screwing up.
A disengaged workforce who are embarrassed by the product.
Poor aircraft choice
High yield passengers are returning but not to Qantas
......the list is endless.
Cost cutting has always one of the least sophisticated ways of managing a business.At Qantas its an art form because there is no one in the joint who is smart to do anything else
Aging aircraft
Totally FarQd IFE
Top heavy with management
Incentive bonuses for screwing up.
A disengaged workforce who are embarrassed by the product.
Poor aircraft choice
High yield passengers are returning but not to Qantas
......the list is endless.
Cost cutting has always one of the least sophisticated ways of managing a business.At Qantas its an art form because there is no one in the joint who is smart to do anything else
Last edited by DEFCON4; 12th Aug 2010 at 05:58.
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Firstly, I do not work for Qantas. However I am saddened and annoyed by the attitude that some staff appear to have toward the company.
Last week, I met two Flight Attendant friends of my partner, one domestic mainline and one long haul, whilst having a post dinner drink in a Sydney bar. Admittedly they were both pretty drunk, but the conversation turned to having a big weekend of partying. However to do that, they would both have to go "sick". That was no issue in their eyes as they "hated the job".
If it is so bad, then get OUT and stop poisioning the work place.
Stop blaming others and start taking some ownership/responsibility for your work environment.
Last week, I met two Flight Attendant friends of my partner, one domestic mainline and one long haul, whilst having a post dinner drink in a Sydney bar. Admittedly they were both pretty drunk, but the conversation turned to having a big weekend of partying. However to do that, they would both have to go "sick". That was no issue in their eyes as they "hated the job".
If it is so bad, then get OUT and stop poisioning the work place.
Stop blaming others and start taking some ownership/responsibility for your work environment.
VC9,
Longhaul cabin crew have very recently been informed that passenger satisfaction levels in the international division are higher than at any other time in the companies history.
I can think of no reason why cabin crew management would tell it's staff that other than it's the truth.
Despite what you seem to want to imply, the staff are not the problem.
Oh BTW.
Your posting history suggests a preoccupation [obsession ?] when it comes to anti flight attendant matters.
Help is out there.......
Longhaul cabin crew have very recently been informed that passenger satisfaction levels in the international division are higher than at any other time in the companies history.
I can think of no reason why cabin crew management would tell it's staff that other than it's the truth.
Despite what you seem to want to imply, the staff are not the problem.
Oh BTW.
Your posting history suggests a preoccupation [obsession ?] when it comes to anti flight attendant matters.
Help is out there.......
Last edited by standard unit; 12th Aug 2010 at 08:07.
VC9, there are always bad apples, and people have been doing that since school through uni, part time work and into their full time careers. So hopefully these are just bad apples and not a standard across QF
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Management cf. Employees
Management run the company and are therefore responsible for its profit or loss.
There are those that seek to blame employees when profits are not what expected and equally are prepared to applaud management when profit exceeds expectations.
Two pissed CC contribute nothing to either scenario.They are indeed a minority.There are abpout 3% of individuals employed as CC who should be sharpening pencils for a living.The other 97% get on with doing what they are employed to do.
The same can be said for every other department in an airline.
Want to go after someone ?
Find out where Dixon lives and give him an earful.
If another business posted a profit like that on a revenue of $13 billion one would have to seriously consider its viablity and its management's business acumen
There are those that seek to blame employees when profits are not what expected and equally are prepared to applaud management when profit exceeds expectations.
Two pissed CC contribute nothing to either scenario.They are indeed a minority.There are abpout 3% of individuals employed as CC who should be sharpening pencils for a living.The other 97% get on with doing what they are employed to do.
The same can be said for every other department in an airline.
Want to go after someone ?
Find out where Dixon lives and give him an earful.
If another business posted a profit like that on a revenue of $13 billion one would have to seriously consider its viablity and its management's business acumen
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If another business posted a profit like that on a revenue of $13 billion one would have to seriously consider its viablity and its management's business acumen.
The headlines from Dow Jones don’t sound too bad, “Qantas Airways FY Net Profit -4.3% at A$112M” and “1H FY11 Pre-tax Profit May Be Materially Stronger On Year”.
But just as a newly polished car may look good on the outside, it’s only when you look under the bonnet that you can see what’s really going on. In the case of Qantas, forget the net profit amount and the forecast for the first half of the 2011 financial year, that’s just the lovely polished finish. If you want to look at the engine you need to look at the company’s cash flow.
And that’s where you can see the engine has almost seized up. You see, while Qantas reports a $112 million profit, if it wasn’t for proceeds from borrowings of $1.352 billion, Qantas would have had negative cash flow for the year to the tune of $1.265 billion.
In other words, just like the Aussie battler who needs to go to a payday lender in order to cover the cost of a gas or electricity bill, Qantas has had to go to its payday lender and draw down from a debt facility in order to pay its bills.
This is despite supposedly having $3.7 billion of cash in the bank.
But you can see why Qantas went down the road of increasing its borrowings rather than drawing down on cash. Minus the borrowings, Qantas’ cash holdings would have decreased by around a third. Doubtless the analysts wouldn’t have liked that as it would have played havoc with a bunch of cash based ratios.
Much better to go further into debt instead. Just like the rest of the population. Debt is all the rage after all - $1 trillion of household debt can’t be wrong!
The rotten state of the company’s cash flow is evident elsewhere too, such as the decision not to pay a dividend for the third half-year in a row.
Which is hardly surprising considering on a per-share basis Qantas earned just 4.9 cents per share, or earnings of 1.9% of the share price.
When a company’s earnings are that low, and it needs to borrow money in order to be cash flow positive it’s not hard to figure out that the company is in terrible shape.
But just as a newly polished car may look good on the outside, it’s only when you look under the bonnet that you can see what’s really going on. In the case of Qantas, forget the net profit amount and the forecast for the first half of the 2011 financial year, that’s just the lovely polished finish. If you want to look at the engine you need to look at the company’s cash flow.
And that’s where you can see the engine has almost seized up. You see, while Qantas reports a $112 million profit, if it wasn’t for proceeds from borrowings of $1.352 billion, Qantas would have had negative cash flow for the year to the tune of $1.265 billion.
In other words, just like the Aussie battler who needs to go to a payday lender in order to cover the cost of a gas or electricity bill, Qantas has had to go to its payday lender and draw down from a debt facility in order to pay its bills.
This is despite supposedly having $3.7 billion of cash in the bank.
But you can see why Qantas went down the road of increasing its borrowings rather than drawing down on cash. Minus the borrowings, Qantas’ cash holdings would have decreased by around a third. Doubtless the analysts wouldn’t have liked that as it would have played havoc with a bunch of cash based ratios.
Much better to go further into debt instead. Just like the rest of the population. Debt is all the rage after all - $1 trillion of household debt can’t be wrong!
The rotten state of the company’s cash flow is evident elsewhere too, such as the decision not to pay a dividend for the third half-year in a row.
Which is hardly surprising considering on a per-share basis Qantas earned just 4.9 cents per share, or earnings of 1.9% of the share price.
When a company’s earnings are that low, and it needs to borrow money in order to be cash flow positive it’s not hard to figure out that the company is in terrible shape.
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Noted Worth What
However, according to one respected Investment Bank
· "Qantas reported FY10 underlying PBT of $377m. Operationally the result was in line with expectations with higher than expected lease costs seeing a slightly lower number at the PBT line.
· No dividend was declared for FY10, however this was not a huge surprise and reflects a conservative approach from the board ahead of a period of significant capex spend. Given an expected rebound in earnings next year, we are forecasting dividend payments to resume,
· Qantas guided for 1H11 PBT to be ‘materially’ higher than 1H10 underlying PBT of $267m. We are forecasting a 45% increase in PBT in 1H11 to $387m supported by yield growth and capacity additions. We expect the market to view positively some bullish comments from management around the potential for a strong recovery in yields over the medium-term towards FY08 levels.
· Qantas reaffirmed plans to invest significantly in its fleet over coming years outlining plans for $2.6bn in capex next year and $2.7bn in FY12, in line with our expectations. Qantas maintains the flexibility to manage its fleet size should capacity growth requirements fall away.
· The result gave further indications that yields are recovering, albeit gradually, and follows positive incremental data from the August airfare index released yesterday by BITRE.
· We have downgraded slightly our Jetstar yield growth expectations given continuing domestic competition and discounting. However, this was offset by an increase to our yield expectations for Mainline, which is benefiting from a pick up in business and corporate travel and the re-emergence of a premium yield for its domestic business relative to competitors.
· We retain our Overweight recommendation for Qantas and $3.00 Price Target. Our thesis for Qantas remains unchanged. We continue to see good valuation support for the stock based on historical trading multiples while we expect a gradual yield recovery in FY11 to support a strong rebound in earnings."
Think United!
However, according to one respected Investment Bank
· "Qantas reported FY10 underlying PBT of $377m. Operationally the result was in line with expectations with higher than expected lease costs seeing a slightly lower number at the PBT line.
· No dividend was declared for FY10, however this was not a huge surprise and reflects a conservative approach from the board ahead of a period of significant capex spend. Given an expected rebound in earnings next year, we are forecasting dividend payments to resume,
· Qantas guided for 1H11 PBT to be ‘materially’ higher than 1H10 underlying PBT of $267m. We are forecasting a 45% increase in PBT in 1H11 to $387m supported by yield growth and capacity additions. We expect the market to view positively some bullish comments from management around the potential for a strong recovery in yields over the medium-term towards FY08 levels.
· Qantas reaffirmed plans to invest significantly in its fleet over coming years outlining plans for $2.6bn in capex next year and $2.7bn in FY12, in line with our expectations. Qantas maintains the flexibility to manage its fleet size should capacity growth requirements fall away.
· The result gave further indications that yields are recovering, albeit gradually, and follows positive incremental data from the August airfare index released yesterday by BITRE.
· We have downgraded slightly our Jetstar yield growth expectations given continuing domestic competition and discounting. However, this was offset by an increase to our yield expectations for Mainline, which is benefiting from a pick up in business and corporate travel and the re-emergence of a premium yield for its domestic business relative to competitors.
· We retain our Overweight recommendation for Qantas and $3.00 Price Target. Our thesis for Qantas remains unchanged. We continue to see good valuation support for the stock based on historical trading multiples while we expect a gradual yield recovery in FY11 to support a strong rebound in earnings."
Think United!
Airlines do not make big money! It is simple, aircraft and airlines are expensive to run. They are not a good investment if you want a big return on capital. And while there are so many companies offering heavily discounted tickets non will make much profit. Yes Qantas needs to regroup but they will never see the profits they had several years ago as the playing field has changed. I presume though that with no share divedend executive bonuses will be curtailed as well.
