Regional airline, Regional Express Holdings (REX) has produced not a bad result for the third quarter, given all the gloom surrounding the airline business and the recession.
It said yesterday third quarter profit fell 6.3% as passenger numbers declined.
It warned that annual earnings will be around 10% lower than last year (but those at Qantas will be down a lot more, as we know).
The regional airline operator said pre-tax profit for the three months ended March 31 fell to $7.5 million, from $8 million in the same period last year.
"The company has advised that its net earnings for the full financial year could be up to 10 per cent below that of last year," it said in a statement and presentation to the ASX.
The airline said its freight business saw a 25% quarter on quarter fall in volumes, while the load factor was down to 63% from 67% for the passenger side.
Passenger revenue fell 10.8% to $45.4 million as passenger numbers dropped a substantial near 20% to 292,386.
The third quarter result left the airline’s 9 month pre-tax profit up 1.9% at $21.9 million.
That again is a better performance than at Qantas (relatively speaking).
REX made a pre-tax profit of $32.48 million in 2007-08.
No wonder Rex shares rose 2.5c to 87.5cyesterday.
Oil and gas explorer Petsec Energy has reiterated its 2009 production forecasts, and says it hopes to make acquisitions during the year.
At the company’s annual general meeting in Sydney yesterday, Petsec said it was still on track to meet production forecasts of seven bcfe (billion cubic feet of natural gas equivalent).
Company chief Terry Fern said after reaching highs of $US14 per Mcf (thousand cubic feet) in 2008, gas prices had dropped to about $US4/Mcf and could fall as low as $US2.50/Mcf.
The company said the global financial crisis had increased the number of distressed companies and asset sales, leading to acquisition opportunities.
"Our acquisition targets would be less than US$100 million, funded in large part by our banking facilities, underwritten by hedging.
"We will seek to extend our reach to larger targets, of the order of US$200 to US$500 million, by forming a joint venture of like-minded entities that see that the current state of the market will offer many compelling opportunities to acquire producing reserves in the Gulf of Mexico.
"We will conserve our capital and apply our energies to the acquisition of producing properties predominately in the US where the market, infrastructure and administrative rules allow profitable operations at current commodity prices.
"We plan to have our best prospects drill-ready when service costs have fallen to allow profitable exploration with current gas prices.
"We don’t expect to drill until late 2009, but we have a number of very good sized prospects ready to drill.
"In the USA we expect to produce some 7 Bcfe of gas in 2009, much of which is hedged at an average price of the order of US$8/Mcfe, so if spot gas averages US$4/Mcfe, this would generate revenues in the order of US$50 million and cashflows in excess of US$32 million.
"It is intended that much of our cashflow will be used in 2009 to further reduce our net debt, which stood at US$36.8 million at year end, and currently about US$27 million unless required for the acquisition of producing properties.
"We have expectation of sufficient cash flow this year, banking accommodation, a dedicated team of accomplished professionals, and a determination to make a meaningful acquisition which will result in agreeable growth for the Company," Mr Fern told the AGM.
The shares ended down 1.5c at 30c.
And a bit of history yesterday with Lion Nathan producing what could be its last result as an independent company.
It revealed a 6.9% rise in interim profit on the back of solid beer sales and refined its full year earnings outlook.
That’s likely to prove immaterial with the company accepting an offer from its major shareholder, Kirin, of $12.22 a share.
Lion’s interim profit for the half was $176 million, up from $164.6 million in the previous corresponding period.
Net sales revenue rose 5.7% to $1.185 billion, with earnings before interest and tax (EBIT) up 8.4% to $307.0 million.
Lion Nathan said the result meant it had revised its guidance for full year net profit to between $305 million and $315 million, before significant items.
It had previously forecast a result between $300 million and $315 million.
CEO Rob Murray said in a statement yesterday that the result was based on a strong performance by the Australian business, which grew its EBIT by 12.7% to $280.3 million and net sales by 11.3%.
"The company’s investment decisions over the past five years have built a stronger business, which is positioned to deliver in fiscal 2009 and beyond," Mr Murray said.
"The company expects a higher growth rate in the second half due to innovative momentum, Boag’s growth accelerating, the timing of Easter and the cycling of the investment period of the prior year, where fourth quarter marketing spend and the funding costs relating to the Boag’s acquisition had a significant impact on results."
The takeover by Kirin is expected to happen around the end of the financial year in September through scheme of arrangement meetings.
Lion Nathan shares rose 1c to $11.69.
