Qantas Airways Ltd shares yesterday dropped the most in almost five months on concern that rising fuel prices and costs would erode earnings, even after the Australian airline reported record annual profit.
The fuel bill — among the biggest expenses for any airline — would probably jump 21 percent this financial year, the carrier said.
Wages and aircraft leases would also become more onerous, it said, stoking concern a run of record earnings could falter.
Shares fell 2.8 percent in Sydney, after tumbling as much as 7.7 percent earlier. The biggest loss since March 2 trimmed the stock’s gains this year to 30 percent.
Brent crude, which has doubled to about US$75 a barrel from a January 2016 low, is casting a shadow over Qantas’ outlook, after chief executive officer Alan Joyce restored the carrier to profit with his cost-cutting turnaround plan.
He has rewarded investors with share buybacks and dividends over the past three years, and the stock is still the best performer this year among global airlines.
With profit at a record, the airline pledged to return as much as A$500 million ($365 million) to shareholders, including a higher-than-expected dividend and another stock buyback, it said in a statement.
Underlying pretax profit in the 12 months ended June rose 14 percent to a record A$1.6 billion, the top of Qantas’ own forecast.
However, investors were spooked by the fuel bill.
The airline said its total cost on kerosene is expected to increase by about A$690 million to A$3.92 billion in the year through June next year.
It is confident it can “substantially recover” that larger fuel bill, based partly on forward bookings, Qantas said.
Qantas should be able to “more than cover” higher fuel costs in the domestic market, where the airline dominates smaller rival Virgin Australia Holdings Ltd, Joyce told reporters.
He did not match that pledge for the more competitive international market, saying only that Qantas would “substantially recover” the higher cost of fuel on those routes.
He is also upgrading his fleet with more fuel-efficient aircraft and redirecting international capacity toward Asia to tap a travel and tourist boom.
The carrier has ordered six additional Boeing Co 787-9 aircraft, the first of which are to be delivered before the end of next year, taking its Dreamliner fleet to 14 by 2020.
“We don’t see anything that’s indicating to us that our strong cash flows won’t continue into the future,” Joyce said on Bloomberg Television, when asked whether Qantas might be better off stockpiling money for tougher times.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last