Australian carrier Qantas Airways Ltd yesterday posted record annual profits and announced its first payout to shareholders in seven years, staging a turnaround after axing jobs and selling aircraft in an aggressive restructuring.
The results were also boosted by the sharp fall in global oil prices and a less competitive domestic market that has given the firm a stable base of earnings.
Other international airlines such as Cathay Pacific Airways Ltd (國泰航空), All Nippon Airways Co Ltd (ANA) and Japan Airlines Ltd (JAL) have seen profits plunge amid intense competition from lower-cost rivals and as terrorism fears eat into demand.
Photo: EPA
Qantas reported a net annual profit of A$1.42 billion (US$1.08 billion) in the year to June 30, an 80 percent increase from the previous corresponding period.
Underlying profit before tax — Qantas’ preferred measure — jumped by 57 percent to also hit a record A$1.53 billion.
The company resumed paying dividends of A$0.07 per share, the first payout since 2009, and announced a share buy-back of up to A$366 million. Qantas also said it would give an A$3,000 one-off bonus to some 25,000 staff who had signed up to a pay freeze.
“These are fantastic results that we’ve had in the last year, as I said, record results for the group,” Qantas chief executive Alan Joyce said.
“We do see the strong performance of the company continuing. This business has taken a lot of cost out and improved revenue dramatically. The transformation program has changed the business completely, delivering over A$1.66 billion in performance improvements. Without that, we wouldn’t be where we are today,” he said.
Qantas shares closed 1.47 percent higher yesterday at A$3.45 in Sydney trading.
“One of the reasons why Qantas is looking quite compelling and is producing very good results of late is the fact that the domestic market here has now basically shrunk to mostly a duopoly between them and Virgin,” IG Markets’ analyst Angus Nicholson said.
“Many other airlines are faced with sharp competition on many of their different major routes, which crimps potential earnings and crimps margin growth,” he said.
Qantas’ domestic business reported record underlying earnings of A$578 million, a 20 percent increase from the previous year, while its international division posted a 92 percent jump in underlying earnings to a record A$512 million.
The airline’s discount carrier Jetstar Asia likewise reached record profits, with a 97 percent leap in underlying earnings to A$452 million.
“Qantas now has this quite comfortable steady cash flow coming from the domestic market that can really finance their ventures into the more competitive international routes and that’s probably its major advantage against many other airlines,” Nicholson said.
Joyce said Qantas was set to roll out Wi-Fi access for passengers on its regional and international fleets, and would start selling tickets for its Dreamliner flights before the end of this year, with routes for the incoming Boeing jet starting next year.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
RSS