Long suffering Qantas (QAN) shareholders are about to be rewarded for the first time in six years with a capital return of 23 cents a share.
News of the proposed return (and share consolidation) – to cost $505 million, was one of the headlines from this morning’s expected strong 2014-15 results from the airline.
The return will need shareholder approval at the AGM in late October.
Qantas reported an underlying pre-tax profit of $975 million thanks to lower fuel costs and the continuing benefits of its deep cost cutting of the past two years.
At the same time the wasteful capacity war with Virgin is over, and the airline is benefiting from more rational pricing in the domestic market, especially in business.
Competition in the airline’s international business also eased.
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The airline said this morning all parts of the airline reported strong profits performances for the year to June.
The airline’s underlying pre-tax profit of $975 million for the year is a major rebound from the $646 million loss in 2013-14.
The market had expected Qantas to post a $982 million pre-tax profit, which is the preferred measure for both market analysts and the airline.
Revenue rose 3% to $15.8 billion.
It is Qantas’s biggest profit since 2008 when Qantas posted a $1.18 billion profit. Net profit after tax was $557 million for the year, compared to a loss of $2.48 billion a year ago after the airline slashed asset values.
The airline also announced that it will buy eight Boeing 787 Dreamliner jets from 2017. They will replace the airline’s oldest Boeing 747s.
No profit guidance was give in this morning by Qantas.
