Qantas posts H1 net profit of A$111m

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Qantas Airways has more than doubled its statutory profit after tax to A$111 million ($114 million) in the first half of its fiscal year.

For the six months ended 31 December, underlying profit before tax (PBT) grew by 10% to A$223 million.

Qantas says that the underlying PBT includes A$125 million in revenue from Qantas’s restructuring of its Boeing 787 orders after it reached an agreement with the airframer in August 2012.

Group revenue increased by 2% to A$8.24 billion, while expenses grew by 2% to A$7.93 billion, with fuel expenses remaining flat at A$2.18 billion.

For the six-month period, the group's passenger traffic, as measured in RPKs, increased by 0.7%, while capacity grew by 1.7%. Passenger numbers increased by 4.3% to 24.7 million as load factor fell by 0.7 percentage points to 80%.

All operating segments of the group's portfolio were profitable with the exception of Qantas International, says the airline. Losses at Qantas International, however, were down by 65% from the corresponding period last year.

Qantas Domestic reported underlying earnings before interest and taxes (EBIT) of A$218 million, down by 34% year on year. Qantas chief executive Alan Joyce attributes the decline to increased capacity growth from competitors, which he says has placed pressure on yield for all airlines.

Jetstar reported underlying EBIT of A$128 million during the six-month period, down by 13% from $147 million a year ago. The airline attributes the decline in EBIT to domestic market conditions and start-up investments such as Jetstar Japan and Jetstar Hong Kong.

Qantas Freight reported underlying EBIT of $22 million, down by 42% from $38 million a year ago. Joyce says: "International freight earnings held up well in the first half despite a soft global cargo market. Domestic performance was weaker, and the time was right for the group to sell its stake in StarTrack and integrate Australian air express with Qantas Freight - creating operational and commercial efficiencies."

Looking ahead, the airline expects the second half of the fiscal year to remain challenging and volatile. It expects group capacity to increase by 0.5-1.5% in the second half on a year-on-year basis, with domestic capacity expected to increase by 5-7%. Underlying fuel costs for the group are expected to total A$2.25 billion in the second half of the fiscal year.