Australia's Qantas FY net profit 50 pct higher, to buy back shares

Australia's Qantas FY net profit 50 pct higher, to buy back shares - UPDATE

	Published : Thu, 16 Aug 2007 02:40 By : Agencies Print this Story

SYDNEY (Thomson Financial) - Australian flag carrier Qantas Airways Ltd said Thursday its next profit for the year ended June surged to a record 719.4 million Australian dollars from 480.0 million dollars a year earlier as robust passenger demand offset higher fuel costs.

But the figure was still lower than the market's consensus forecast of 766 million dollars.

Qantas said the profit includes a provision of 47 million dollars, announced earlier, against liabilities the airline may incur in the US for involvement in an alleged freight cartel.

Revenue was up 11 percent to 15.2 billion dollars. Pretax profit was 1.03 billion dollars.

Chief executive Geoff Dixon said the strong results were aided by contributions from QantasLink and Jetstar, with robust passenger demand leading to a 6.9 percent improvement in yield and a three percentage point increase in seat factor to 79.9 percent.

He said the results also reflected the airline's cost-cutting 'Sustainable Future' plan of trimming three billion dollars by June 2008.

The airline has declared a final dividend of 15 cents, up from the 11 cents paid a year ago.

Qantas also said it will buy back about 10 percent of its shares amounting to a capital reduction of over 1 billion dollars, made possible by a cash position of 3.4 billion dollars.

Chairman Margaret Jackson said the airline would fund the buyback from cash reserves, starting next month, which should not impact on its current 'BBB+/Baa1' unsecured credit ratings with negative outlook.

'The first six weeks of 2007/2008 (current financial year) have been very strong for all our flying businesses and forward bookings are equally buoyant through to the end of the calendar year. Subject to no major deterioration in market conditions...we are currently expecting to be around 30 percent higher than the 2006/07 profit before tax result,' the airline said in a statement.

Following a failed takeover bid led by Macquarie Bank, Qantas said it will restructure its organisation.

'We believe we can unlock further value from our individual businesses and work is underway across the company - most notably in our Frequent Flyer, Freight, Fleet and Holiday divisions.' Dixon said.

'We are looking at potential new ownership structures and strategic acquisitions. We expect to make announcements during the current financial year on the future direction of these businesses,' he said.

Qantas shares retreated after early gains spurred by news of the buyback. At 11.20 am (0120 GMT),

the stock was down 28 cents or 5.3 percent at 5.00 dollars.

(1 US dollar = 1.22 Australian dollars)

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Australia's Qantas FY net profit 50 pct higher, to buy back shares - UPDATE