Qantas results for half year ending December 31

Highlights

• Profit before tax of $483.5 million
• Net profit after tax of $352.6 million
• Revenue of $6.8 billion
• Interim dividend of 11 cents per share fully franked
• Earnings per share of 18.4 cents

Qantas today announced a profit before tax of $483.5 million for the half-year ended 31 December 2005, a 3.4 per cent decrease on the halfyear to 31 December 2004.

The 2005 half-year profit includes a one-off restructuring cost of $69.6 million under the airline’s Sustainable Future Program. The 2004 half-year results included a release of surplus revenue accounting provisions of $52.1 million.

Adjusting for these two items, profit improved by $104.6 million, or 23.3 per cent during the six months to 31 December 2005.

The result was achieved in very difficult trading conditions, with fuel prices increasing costs by $689.8 million before hedging benefits of $214.7 million, and aggressive competitor capacity increases in the international market.

Net profit after tax was $352.6 million, down 9.6 per cent on the comparative half-year.

This figure reflects the impact of the restructuring charges and fuel prices, but also reflects a lower tax expense in the comparative 2004 half-year when the Qantas Group entered into Tax Consolidations.

The Directors declared a fully franked interim dividend of 11 cents per share, an increase of 1 cent per share on the prior half-year.

The Chairman of Qantas, Ms Margaret Jackson, said the increased dividend reflected the confidence of the Board and Management in the airline’s future.

“We believe we can continue to grow and invest profitably despite the obvious challenges faced by the industry in all parts of the world.

“While doing this, it is also important that we continue to reward our shareholders by paying franked dividends,” she said.

“Despite publicity about job losses and some negative Union comments about Qantas, the facts are that very few Australian companies invest like we do in the growth of the nation or grow employment so consistently, and no other company has better overall employment conditions.”

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said that Qantas’ performance, like all airlines today, was more and more being influenced on an ongoing basis by the price of fuel.

“Fuel costs climbed by 58 per cent in the half year and represented 28 per cent of our net expenditure. Without our successful hedging strategies, this would have been 31 per cent.

“All our business transformation initiatives are now focused on enabling Qantas to meet its future expenditure commitments and profit projections with a fuel cost above US$60 a barrel.”