Qantas Airways Ltd said it expects first-half earnings to more than double as Australia’s national carrier benefits from lower fuel prices, a cost-cutting strategy and revenue growth across its international and domestic operations.
Underlying profit before tax for the six months ending on Dec. 31 is expected to be between A$875 million and A$925 million (US$633.8 million and US$670 million), the airline said in a statement yesterday.
That compares with A$367 million reported a year earlier and the A$885 million mean estimate of three analysts surveyed by Bloomberg.
“Qantas management worked very hard over the last couple of years to reduce costs to extricate themselves from a difficult period and get themselves into this position,” said David Liu, who helps oversee A$450 million including Qantas shares as head of research at Above the Index Asset Management Pty in Sydney.
“In a low oil price environment, if they are able to manage expenses and capacity appropriately, then we’d see them improving profitability,” he added.
Cost reductions, aided by tumbling oil prices, in August helped deliver the airline’s strongest full-year earnings since CEO Alan Joyce took over in 2008. The Sydney-based carrier last month regained its investment-grade credit rating for the first time in two years, while it handed back A$505 million to shareholders.
Qantas shares rose 2.4 percent to A$3.87 at 10:15am in Sydney. That extends this year’s gains to 52 percent, compared with a 9 percent decline for the benchmark S&P/ASX 200 index.
“We’ve seen improved revenue in our domestic and international operations, reduced costs across the group through the Qantas Transformation program, and expect another record half-year result from Qantas Loyalty,” Joyce said in the statement, referring to the airline’s frequent flyer program.
The airline’s forecast includes an estimated A$17 million non-cash impact from bond rate movements on employee provisions and a one-off A$25 million hit to earnings at its low-cost unit Jetstar Airways Pty Ltd from disruption caused by a volcano in Bali, Indonesia, Qantas said.
Qantas is scheduled to announce first-half earnings on Feb. 23 next year.
Just a few years ago, the millennial generation — generally defined as those born from the early 1980s through the mid-1990s — was synonymous with youthful rebellion. However, now, as the millennials ease into early middle age, they are finding their path out of their parents’ basement to be a lot harder than it was for earlier generations. The fundamental problem is that millennials are not building wealth. The wealth of the median US household headed by someone 35 or younger has actually shrunk in inflation-adjusted terms since the mid-2000s, even as the wealth of older Americans has continued to grow. An
‘LITTLE CHOICE’: The airline said it expected only about 8,000 of its 29,000 employees to be working by next month, but hoped to have 21,000 in the next two years Qantas Airways Ltd plans to cut at least 6,000 jobs and keep 15,000 more workers on extended furloughs as Australia’s largest airline tries to survive the coronavirus pandemic. Qantas yesterday announced a plan to reduce costs by billions of dollars and raise fresh capital. The plan includes grounding 100 planes for a year or more and immediately retiring its six remaining Boeing Co 747 planes. Chief executive Alan Joyce said the airline has to become smaller as it braces for several years of much lower revenues. He said the furloughed workers faced a long interruption to their airline careers. “The actions that we’re taking
Apple Inc’s decision to stop using Intel Corp processors in its Mac computers and switching to its own chips might benefit Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and boost Taiwan’s high-tech exports, Australia and New Zealand Banking Group (ANZ) said in a note on Tuesday. The US tech giant announced the “Apple silicon” initiative at its annual Worldwide Developers’ Conference, which started on Monday. The company said the first Mac powered by its own chips would debut by the end of this year and all product lines might shift to the new architecture in the next two years. TSMC is likely to
EXPERIMENTAL DRUG: While news about a COVID-19 vaccine is more eye-catching, developing a treatment would be more viable, the Senhwa boss said Senhwa Biosciences Inc (生華科) aims to raise NT$1.5 billion (US$50.57 million) by issuing 15 million new common shares in the third quarter of this year to fund the research of new drugs, including the experimental drug Silmitasertib for the treatment of COVID-19, the company said on Monday. That would be the firm’s largest fundraising effort after it raised more than NT$1.4 billion from an initial public offering on the Taipei Exchange (TPEX) in April 2017, chief financial officer Sarah Chang (張小萍) told the Taipei Times by telephone. The price of the new shares would depend on the firm’s average share price