Air New Zealand announces interim profit of $211 million

Lauren Eldershaw
By Lauren Eldershaw February 28, 2019 09:56

Air New Zealand announces interim profit of $211 million

Air New Zealand has announced earnings before taxation of $211 million for the six month period ended 31 December 2018, compared to $323 million in the prior period. Net profit after taxation was $152 million.

Shareholders of Air New Zealand will receive a fully imputed interim dividend of 11.0 cents per share.

Chairman Tony Carter thanked the team of over 12,000 Air New Zealanders for their hard work and customer focus during a very challenging operational period for the airline.

Key drivers of the interim result included operating revenue growth of 7.1%, which was more than offset by a 28% increase in fuel price and increased operational costs. Operating cash flow of $475 million remained strong despite the headwinds faced over the period.

Looking ahead to the remainder of the year, Chief Executive Officer Christopher Luxon acknowledged the rate of growth in the New Zealand market is slowing from previous years to be more in line with other developed markets. Accordingly, the airline will be reviewing its network, fleet and cost base to reflect the new environment.

“While we continue to expect solid growth across our key markets including domestic New Zealand, we cannot ignore signals that the rate of growth has slowed somewhat from prior years. We pride ourselves at Air New Zealand on being nimble and able to quickly adjust our business to reflect the changing macro environment and this time is no different.”

Air New Zealand issued a revised outlook for the 2019 financial year on 30 January, prompted by slower revenue growth expectations in the second half of the year. The airline has reaffirmed that outlook statement for the financial year ending 30 June 2019. Based upon current market conditions and assuming an average jet fuel price of USD $75 per barrel for the second half of the financial year, 2019 earnings before taxation is expected to be in the range of $340 million to $400 million.

Lauren Eldershaw
By Lauren Eldershaw February 28, 2019 09:56