Despite announcing a record half-year underlying net profit, following a loss of $1.3 billion at the same time last year, Qantas shares slipped on Thursday after the company revealed its capital expenditure would increase by up to $400 million in financial year 2023.
The group also announced an on-market share buyback of up to $500 million, due to commence in March 2023. It follows a $400 million share buyback completed in December 2022.
Commenting on Qantas’ results, Josh Gilbert, market analyst at eToro, said: “Some investors may be disappointed not to see the return of Qantas’ dividend, but a strong fiscal year could see it reinstated”.
“Airlines may not have been at the top of many investors’ lists over the last three years but these results from Qantas signify that there is plenty of opportunity ahead thanks to strong, renewed travel demand.”
Qantas’ $1.4 billion underlying profit before tax compares to a $1.3 billion loss for the same time last year.
According to chief executive officer Alan Joyce, the airline’s statutory losses accumulated to $7 billion across the three years of the pandemic.
Broad drivers of its financial performance “worth singling out”, according to Mr Joyce, included robust travel demand and higher yields.
“This is a huge turnaround considering the massive losses we were facing just 12 months ago,” Mr Joyce said.
“When we restructured the business at the start of COVID, it was to make sure we could bounce back quickly when travel returned. That’s effectively what’s happened, but it’s the strength of the demand that has driven such a strong result,” he noted.
Qantas’ net profit reached $1 billion compared to a loss of $456 million a year earlier, while revenue added 222.3 per cent to reach $9.9 billion.
Mr Joyce said the airline’s “people” have been fundamental to the group’s recovery.
“Around 20,000 non-executive staff across the group are eligible for shares and cash bonuses of up to $11,500,” he said.
“Today, we’ve added another $500 in staff travel credit, as an extra way to say thank you. In total, we’ve set aside over $400 million for reward payments for our people, on top of significant EBA-related pay increases.”
Qantas’ share price ended trading on Thursday down 6.8 per cent at $6.3.
Emirates are rumoured to have given their employees a $20,000 bonus and budget airline Scoot similar.