Air NZ annual earnings fall 21% in competitive market

FIRST CUT: Air New Zealand annual earnings fall 21% in competitive market, hikes dividend

By Rebecca Howard

Aug. 23 (BusinessDesk) - Air New Zealand's full year earnings fell 21 percent in an increasingly competitive market but were still the second highest ever as the airline continues to benefit from lower jet fuel prices and the country's ongoing tourism boom.

Pre-tax earnings dropped to $527 million in the year to June 30, compared to $663 million in the prior year, and were still the second highest in its history, the company said in a statement. In June the company said earnings before taxation were likely to exceed $525 million. Net profit fell to $382 million from $463 million. Earnings per share were 33.5 cents versus 40.8 cents in the prior period. Operating revenue slipped to $5.1 billion from $5.23 billion.

"This year Air New Zealand faced an unprecedented increase in the level of competition from some of the world’s largest airlines and effectively rose to the challenge," said chief executive Christopher Luxon.

The board declared final fully imputed dividend of 11 cents per share, an increase of 10 percent on the prior year, bringing the full year declared ordinary dividends to 21 cents per share. The final dividend will be paid on Sept. 18 to investors on record at the close of business on Sept. 8.

The airline's board also awarded a company performance bonus of up to $1,700 to be paid next week to approximately 8,500 Air New Zealand staff who do not have other incentive programmes as part of their employment agreement.

Looking forward to the year ahead, the airline said it is optimistic about the overall market dynamics. Based on current market conditions and assuming an average jet fuel price of US$60 per barrel (which represents the average over the past two months), the airline is aiming to improve upon 2017 earnings, it said.

The shares last traded at $3.40, and have jumped 55 percent this year.

(BusinessDesk)

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