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QAN

Qantas Airways Limited - Reports FY19 Results

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Qantas Airways Limited (ASX: QAN) operates passenger transportation airlines with Jetstar and Qantas being its two key brands.

Quantas Airways Ltd FY19 Results

What are the FY19 results for QAN?

This morning (22nd August 2019) Qantas Airways Limited reported its FY19 results that are highlighted below:

  • Underlying profit before tax fell to $1.3b down 17%
  • Record revenue reported at $17.9b up 4.9%
  • Earnings per share of 54.6 cents flat on FY18 results
  • Total dividend for FY19 of 13 cents per share
  • Off-market share buy back of up to 79.7m shares.

 

What are the key drivers of this result?

The 17% decline in profits Qantas has reported has been attributed to a $614m increase in fuel costs and $154m foreign exchange costs, the Company also reported a $92m accounting cost related to employee leave. Qantas has highlighted that its key business operations remain profitable as Qantas achieved 4%-unit revenue growth in its domestic operations despite flat volume growth, as a result of new baggage options and an uptake in mining operations. QAN’s international operations experienced a 28% decline in  EBIT as fuel prices raised fares and lowered sales volumes, however Qantas believes its new fleet and network will contribute to future revenue growth with its Perth-London route attracting popularity. Qantas loyalty reported an 8% growth in EBIT as membership reaches 250,000 customers and insurance and financial products continue to generate increased earnings.

 

What is the future outlook for QAN?

Qantas has predicted growth in fuel costs in 2020 at a value of $100m however QAN is expecting increased capacity to offset these costs. The Company is also offering guidance that capacity will grow by 1% across the group in FY 2020, whilst net depreciation and amortisation is expected to rise to $130m in 2020 worsening the possibility of QAN producing a strong balance sheet.

 

How has the market reacted?

The market has responded positively with the share price rising 3.2% to $5.96 as investors are encouraged by QAN record revenue result and the 79.7m share buy back.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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