Qantas Airways (QAN) SNAPSHOT
Profile: Qantas (QAN) is Australia’s largest airline, flying passengers both domestically and internationally through two primary brands, Qantas and Jetstar. It also operates the Freight Enterprises and Loyalty businesses (frequent flyer and business rewards), as well as subsidiaries including other airlines and businesses in specialist markets, such as Q Catering and Express Ground Handling.
History: Qantas was formally registered as a company in 1920. The name Qantas was abbreviated from Queensland and Northern Territory Aerial Services Limited. The first aircraft operated by Qantas was an Avro 504K, which carried two passengers behind the pilot for joy rides and air taxi services.
Earnings composition: In FY19, QAN’s Domestic division delivered 42% of total underlying earnings before interest and tax (EBIT) with $740m. The International division reported EBIT of $285m (16%), while the Jetstar Group and Qantas Loyalty accounted for EBIT of $370m (21%) and $374m (21%) respectively.
Most recent result – FY19: Underlying EBIT declined 15% on the prior corresponding period (pcp) to $1.5bn. This was driven by a $614m increase in fuel costs as well as an additional $154m forex impact on non-fuel expenses. Group underlying profit before tax was $1.3bn, down 17% on the pcp, while underlying earnings per share (eps) was down 11% on the pcp to 56 cents per share (cps). A 13cps dividend was declared, bringing the full year dividend to 25cps, up from 17cps in the pcp. QAN also announced a c.$400m off-market buy-back (up to 79.7m shares) to distribute surplus capital and franking credits.
Company outlook: QAN expects group capacity to increase by c.1% in 1H20 from 1H19. It expects domestic market capacity to remain flat to slightly down in 1H20 from 1H19. QAN expects group international capacity to increase by c.1.5% and competitor capacity to decline by c.1% in 1H20 from 1H19. Fuel costs in FY20 are forecast to be c.A$3.95bn, up from FY19 fuel costs of A$3.85bn
Important dates: Ex-dividend date is 2 September 2019. Payment date is 23 September 2019. AGM is scheduled for 25 October 2019. 1Q20 results are scheduled for 24 October 2019. QAN’s investor day is scheduled for 19 November 2019. Shares will be quoted ex-entitlement from 2 September 2019 for the buy-back. The buy-back date is 4 November 2019 (buy-back price announced).
Submit your email address below to download the full PDF Snapshot.