Air NZ posts higher normalised earnings   25 Feb 2015

Article - BusinessDesk

Air NZ posts higher normalised earnings

By Fiona Rotherham

Feb. 25 (BusinessDesk) - Air New Zealand has posted a 6 per cent fall in net profit for the half year but had record normalised earnings before tax of $216 million, up 20 percent, driven by lower fuel prices and increased numbers of travellers.

Net profit was $197 million for the six months ending Dec.31 with the result including equity accounting losses of $14 million from the New Zealand national carrier's stake in Australian airline Virgin Australia,

Revenue grew 3.4 percent to $2.4 billion, underpinned by increased capacity and improved yields across the network, the Auckland-based company said.

Operating cash flow of $378 million was up 26 percent on the previous corresponding period.

The board has declared a fully imputed interim dividend of 6.5 cents per share, an increase of 44 percent on the previous corresponding period.

Chairman Tony Carter said shareholders can be pleased with the result and the company has already stated in November that, should the current level of jet fuel price continue, there would be significant additional improvement in earnings in the second half of this financial year.

“Fuel prices are lower than in November and the sales momentum has been maintained, further strengthening the company’s outlook for the current period and beyond,” Carter said.

Chief executive Christopher Luxon said the airline will continue to be competitive on fare pricing.

“Whether it be here in New Zealand, on the Tasman, to the Pacific Islands or on our extensive long haul network, Air New Zealand customers can expect to see even more competitive pricing. Initiatives like the reintroduction of the popular Night Rider service and its extension to regional New Zealand have been a hit, as have Grabaseat’s low priced long haul fares to destinations like Los Angeles and Tokyo”, Luxon said.

The airline has earmarked $3 billion on aircraft capital expenditure over the next six years.

(BusinessDesk)

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