Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Air NZ says full-year earnings to rise more than 17%

Air NZ says full-year earnings to rise more than 17% after record first half

Feb. 27 (BusinessDesk) – Air New Zealand, the state-controlled airline, said full-year earnings will rise more than 17 percent after reining in fuel costs to deliver a record first-half profit.

Normalised earnings before tax would be in excess of $300 million in the year ending June 30, the Auckland-based company said in a statement. It earned $256 million on that basis a year earlier.

The airline made the forecast after posting first-half profit of $140 million, up from $100 million a year earlier, beating the $130 million forecast of First NZ Capital. Normalised pretax earnings rose 29 percent to a record $180 million. Operating revenue fell 1.6 percent to $2.3 billion including a $49 million impact of foreign exchange movements.

Passenger revenue was little changed at $1.93 billion in the first half although the company was able to trim fuels costs by almost 10 percent to $572 million, helped by efficiency measures and the benefits of a strong kiwi dollar. Wage costs rose about 7 percent to $566 million and included some redundancies, training and maintenance while headcount remained little changed.

“We have worked hard on improving our cost base in an environment where we have not grown,” said chief executive Christopher Luxon. That’s allowed the airline to “continue to price fares competitively.”

The airline will pay a first-half dividend of 4.5 cents a share, about 50 percent above the year earlier payment.

The shares rose 1.1 percent to $1.77 and are above the $1.65-a-piece price at which the government sold down 20 percent of the airline last November, leaving it with 53 percent. In the past 12 months the shares have gained 32 percent, almost twice the gains of the NZX 50 Index. They are rated a ‘buy’ based on the consensus of six analysts polled by Reuters.

The airline delivered a yield of 13.6 cents per revenue passenger kilometre, or RPK, in the first half while its load factor rose to 84.3 percent, better than the 76.7 percent load factor rival Qantas Airways achieved last year. The New Zealand company’s unit costs improved by 3 percent.

While passenger yield and traffic both rose, cargo volumes fell 3 percent as it stopped servicing the Hong Kong-London route and rivalry trimmed cargo yields by about 5 percent.

Air New Zealand is upgrading and expanding its fleet, including Boeing 787-9s and 777-300s set to start in mid-2014 and to lift capacity by about 8 percent in 2015.

“With new fleet additions and the growth that comes from that, our scale grows,” Luxon said in a shareholder presentation. “Our cost base continues to be a key strategic focus, allowing us to price our fares competitively.”

As part of its strategy, Air New Zealand has increased ties with other airlines, including a code-share agreement inked with Singapore Airlines inked in January. In November, the airline said it would take up its full entitlement to the rights issue of Virgin Australia, taking its stake up to 25.5 percent and strengthening the alliance against arch rival Qantas. Singapore Airlines and Etihad Airways are other major shareholders of Virgin.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Maritime: Navigation Safety Review Raises Big Issues For The Govt

Shipping Federation: "The reports makes it clear that the ratification of the Maritime Labour convention (MLC) is long overdue. Only when the MLC is ratified will Maritime NZ be able to inspect and enforce the labour conditions on international ships visiting our ports." More>>

ALSO:

100 Years After Einstein Prediction: Gravitational Waves Found

For the first time, scientists have observed ripples in the fabric of spacetime called gravitational waves, arriving at the earth from a cataclysmic event in the distant universe. This confirms a major prediction of Albert Einstein’s 1915 general theory of relativity and opens an unprecedented new window onto the cosmos. More>>

Farming: Alliance Plans To Start Docking Farmer Payments

Alliance Group, New Zealand's second-largest meat cooperative, plans to start withholding some stock payments to its farmers from next week to bolster its balance sheet and force suppliers to meet their share requirements. More>>

ALSO:

Gambling: SkyCity First Half Profit Rises 30%, Helped By High Rollers

SkyCity anticipates the Auckland business will benefit from government gaming concessions which were triggered on Nov. 11 in recognition of SkyCity’s $470 million Convention Centre development. Morrison said the concessions would allow the Auckland business to lift its activity during peak period, noting it had a record revenue week over the Christmas and New Year period. More>>

ALSO:

Money For Light: Kiwi Scientists Secure Preferential Access To Synchrotron

Science and Innovation Minister Steven Joyce today announced a three-year investment of $2.8 million in the Australian Synchrotron, the largest piece of scientific infrastructure in the Southern Hemisphere, to secure preferential access for Kiwi scientists. More>>

Telco Industry Report: Investment Hits $1.7 Bln A Year

Investment in the telecommunications sector is $1.7 billion a year, proportionately one of the highest levels in the OECD, according to a report released today on the status of the New Zealand sector. More>>

ALSO:

PGPs: New Programme Sets Sights On Strong Wool

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news