Qantas H1 Profit Rises on Strong Domestic Demand

Key Financial Highlights

Qantas Airways reported a rise in first-half underlying profit before tax to A$1.46 billion, an increase of A$71 million from the prior year. The result was bolstered by strong domestic travel demand and contributions from fleet renewal. Statutory profit after tax reached A$925 million for the six months ending December 31.

Performance Overview

The carrier's domestic operations were a key driver, with group domestic underlying EBIT climbing 14% to A$1.05 billion, supported by firm business and premium leisure travel. Jetstar’s domestic EBIT surged 38%. In contrast, international underlying EBIT fell 6% to A$463 million, impacted by higher engineering and wage costs despite a 5% rise in capacity and revenue.

Market Reaction and Shareholder Returns

Despite the profit growth, Sydney-listed shares of Qantas fell more than 5% following the announcement. The board declared a fully franked interim dividend of 19.8 cents per share and announced a new on-market share buyback program of up to A$150 million.

Summary

Qantas's robust domestic performance successfully offset headwinds from rising costs in its international segment. The negative market reaction suggests investor concerns may outweigh the positive earnings figures and shareholder return initiatives.

FAQ

Q: What was Qantas's underlying profit for the first half?
A: The underlying profit before tax was A$1.46 billion, marking a A$71 million increase from the previous year.

Q: How did Qantas shares react to the earnings news?
A: The company's shares fell by more than 5% on the day of the announcement.

Source: Investing.com