Air N.Z. FPO NZ (ASX: AIZ), otherwise known as Air New Zealand, released its interim profit results this morning in what it said was a set of results "shareholders can be very pleased with."
The Results
For the period ended 31 December 2014, the Kiwi airline reported a 5.7% reduction in statutory NPAT (net profit after tax) to NZ$133 million, although its normalised earnings before taxation hit a record NZ$216 million, up 20% on the prior period. This was driven, in part, by a 3.6% lift in revenue to NZ$2.43 billion, as well as increased capacity and improved yields across the network. Operating cash flow also jumped 26% to $378 million, leaving the airline with a strong cash balance of NZ$1.27 billion.
Commenting on the result, Chairman Tony Carter said "(This set of results) demonstrates again that Air New Zealand continues to be one of the few airlines in the world that is able to continue to generate sustainable profits."
An interim fully imputed 6.5 cent dividend was declared, which represents a 44% increase on the prior period.
Virgin Australia
Air New Zealand is a major shareholder (with a 25.9% stake) of Virgin Australia Holdings Ltd (ASX: VAH), which resulted in a NZ$14 million equity loss during the period. Air New Zealand's CEO Christopher Luxon said the company is comfortable with its current stake but declined to say whether or not it would look to increase.
The Outlook
The company said that the average jet fuel price per barrel was down 13% during the period, resulting in a NZ$82 million improvement in fuel costs (once hedge losses are accounted for), although the benefits of lower fuel prices would be even greater during the second half. This, combined with capacity growth, could make 2015 a positive year for the airliner.
