National carrier Air New Zealand capped off a busy year with
significantly improved profits, dividends and cash flow for
the year ended June 30.
Operating profit was up 26% to $898 million in the period,
profit before tax was up 172% to $256 million and reported
profit was up 156% to $182 million.
Revenue rose 3% to $4.62 billion and the final dividend of 5
cents per share took the total dividend to 8cps, up 45% on
the previous corresponding period.
The Government, as majority owner, received $40.2 million in
the interim dividend and $64 million for the year.
Operating cash flow was the highest ever at $750 million and
the company reported cash holdings of $1.15 billion. Gearing
improved 7% to 39.1%, a record low for the airline.
Air NZ's share price rose 3% yesterday to $1.41. At the same
time last year, the share price was 89.5c. The former Labour
government bailed out the airline, buying shares at 15c.
Chairman John Palmer said the result placed the airline among
the best performing globally.
''We are focused on further improving on this result in the
2014 financial year. Based on the airline's forecast of
market demand and fuel prices at current levels, early
results and forward bookings are encouraging.''
The result was one investors, staff, customers and the nation
could be proud of, he said. It marked the start of a new
phase as chief executive Christopher Luxon and his team drove
their ''Go Beyond'' strategy to grow the airline.
Mr Palmer will retire as chairman at the next annual meeting
and be replaced by deputy chairman Tony Carter.
Craigs Investment Partners broker Chris Timms said the result
was driven by increased passenger numbers but the
configuration of the Air NZ planes had changed, allowing the
airline to carry more passengers on each trip.
''This is an impressive lift in profit. Demand is good, they
have boosted market share, cash flow is strong and debt is
low. It has been a long road to this point but the company
has made good progress.''
Technology had helped Air NZ reach the point it had, Mr Timms
At airports now, passengers could swipe to check in, deal
with their own bags and book online. That increased
efficiency and lowered costs.
The company did not provide guidance, but Mr Timms said it
would not have committed to investing $1.8 billion in
aircraft over the next three years if it was not confident
about its future.
''They have made the commitment to continue improving the
fleet. They wouldn't do that without being comfortable in
their growth potential. These are the type of things you look
for,'' he said.
Aircraft due to enter the Air NZ fleet over the next three
years were: two Boeing 777-300ERs; six Boeing 787-9s; nine
Airbus A3202; four ATR72-600s.
Earlier, the Government had indicated it was preparing to
sell down its stake in Air NZ but Meridian Energy, followed
by Genesis, appear the most likely to be partially sold down
before the State's Air NZ holding is reduced.
Mr Luxon said the relentless focus on growing Air NZ was not
confined to the passenger side of the airline. The cargo team
delivered an ''outstanding result'' for the year against a
tough industry backdrop.