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

 


UPDATE: Air NZ shares hit 2-mth high on profit, special div

UPDATE: Air NZ shares hit 2-month high on profit growth, fatter dividend

(Updates with share price, broker comment, briefing comments)

By Paul McBeth

Aug. 27 (BusinessDesk) - Air New Zealand shares rose to a two-month high after the government-controlled national carrier boosted annual profit 45 percent on increased passenger numbers and capacity, and said it will double shareholder returns with a special dividend.

The shares rose as high as $2.20, and were recently up 1.4 percent at $2.18, having climbed 31 percent this year, outpacing a 6.4 percent gain in the NZX All Index over the same period. The stock is rated an average 'buy' based on six analyst recommendations compiled by Reuters, with a median target price of $2.30.

Net profit rose to $262 million, or 23.6 cents per share, in the 12 months ended June 30, from $181 million, or 16.4 cents, a year earlier, the Auckland-based company said in a statement. That was in line with brokerage First NZ Capital's forecast. Normalised pretax earnings climbed 30 percent to $332 million, as revenue edged up 1 percent to $4.71 billion.

The board declared a final dividend of 5.5 cents per share, taking the annual payout to 10 cents, and also declared a special dividend of 10 cents, following a review of the company’s capital structure and consideration of the current and expected medium term liquidity and gearing.

"The result itself very much met market expectations - the special dividend was the cream on the top," said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. "That got the share price a little firmer today."

Air NZ has been upgrading its fleet of plans and increasing ties with other airlines, including a code-share agreement inked with Singapore Airlines and increasing its stake in Virgin Australia.

Hamilton Hindin Greene's Williamson said while the special dividend was welcome, Air NZ needs to maintain the strength of its balance sheet in the face of its capital expenditure needs.

"They don't want to stretch the balance sheet too much - it doesn't take much for some worldwide event to affect international air travel," he said.

The airline expects more earnings growth in 2015 based on forecast market demand and fuel prices, excluding earnings from its stake in Virgin Australia.

Chief executive Christopher Luxon told an analysts' briefing the airline expects group capacity to grow about 6 percent in the 2015 financial year as new aircraft come on stream, supporting the forecast lift in earnings.

Air NZ increased its investment in Australia-based Virgin to 25.99 percent in June, having first sought an alliance with the airline in 2010 after a potential tie-up with Qantas Airways was knocked back in prior years. The New Zealand carrier has also entered into an code share alliance with Singapore Airlines, a fellow investor in Virgin.

The airline increased passenger numbers 2.34 percent to 13.72 million, with a 1.2 percent lift in revenue passenger kilometres to 14.85 million. Short-haul yields improved 0.3 percent to 17.1 cents per revenue passenger kilometre and long-haul yields increased 0.9 percent to 10.7 cents/RPK.

Operating cash flow shrank to $730 million from $750 million a year earlier. Air NZ had cash and equivalents of $1.23 billion as at June 30, and net debt of $384 million.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Post-Post: Brian Roche To Step Down As NZ Post CEO

Brian Roche will step down as chief executive of New Zealand Post in April 2017, having led the state-owned postal service's drive to adjust to shrinking mail volumes with a combination of cost cuts, asset sales, modernisation and expansion of new businesses. More>>

ALSO:

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news