Qantas reports $1.53 billion full-year profit, declares dividend after best result in 95 years

Australian flag carrier Qantas (ASX: QAN) is soaring high. Besides the arrival in 2017 of a new Boeing 787 Dreamliner which could be a direct London-Perth flight, the flying roo also logged its best result in 95 years with a full-year profit of $1.53 billion.

The 57 percent improvement in the air carrier’s profit is the result of the transformation programme initiated by Qantas Chief Executive Alan Joyce. He says the programme made the airline a more agile business, created value for stockholders and provided the firm a platform to invest for the future.

News.com.au reports that all four operations – Qantas Domestic, Qantas International, Jetstar and Qantas Loyalty – reported record results that contributed to the $1.53 billion profit. It is slightly lower than the $1.57 billion forecast by Deutsche Bank in July.

It would be the first time since 2009 that Qantas would pay a regular dividend due to lack of franking credits to declare a meaningful payout. The Australian reports that Qantas shareholders would receive a full-franked dividend of 7 cents a share, or a total of $134 million on Oct 12. The company would also launch a new $366-million share buyback programme.

More dividends would be declared in the future as Qantas’s preferred way of returning capital to shareholders. In the future, dividends would be partially franked or unfranked until the air carrier’s franking balance – down to $26 million after the distribution of this year’s dividend – goes up again.

Joyce credits the transformation programme, introduced in 2014, for the $1.66 billion in permanent cost and revenue savings. Qantas saved $664 million by effective fuel hedging which lowered its fuel expenditures compared to the previous financial year.

The airline passed on to travelers the savings through lower airfares. Employees too would benefit with all 25,000 workers getting a one-off bonus of $3,000. Shareholders could expect another $500 million.

Qantas is in the final stages of providing more options to its regional and international fleet after it conducted a trial of high-speed in-flight WiFi in the earlier part of 2016. It may live-stream cricket on Wi-Fi enabled planes during the summer season if a partnership with Cricket Australia it is exploring would push through.

VIDEO: Qantas Full Year Result 24 Aug 16: Qantas (QAN) pays first dividend since 2009 as profits take off

Source: CommSecTV