Qantas shares fell more than 6% on Thursday after the airline reported a near flat statutory profit for the first half and flagged higher costs in parts of the business.
The stock briefly rose early in trade, then slid back as investors looked through the details. By around midday, Qantas was trading near $9.98 a share, down about 6.3%.
For the six months to December 31, Qantas reported statutory profit after tax of $925 million, only $2 million higher than a year earlier. On an underlying basis, profit before tax was $1.456 billion.
The board announced interim shareholder distributions of up to $450 million. This included a fully franked base dividend of 19.8 cents a share plus an on market buyback of up to $150 million.
A key focus was Qantas International, where earnings fell as costs rose. Underlying earnings in the international division fell 6%, driven by higher costs, wages and staff training for new aircraft along with softer demand for economy seats on Australia to US routes.
A 14% lift in underlying EBIT for the first half. Qantas also pointed to growth in its loyalty arm with its investor materials showing frequent flyer marketing revenue and other Qantas Loyalty businesses up 18%.
Chief executive Vanessa Hudson said the group was pressing ahead with what it calls its biggest fleet renewal. Another 30 new aircraft are due over the next 18 months after six arrived in the half.
Looking ahead, Qantas said it expected travel demand to stay strong in the second half. It said it would keep reshaping capacity in response to changing conditions in key international markets.
