Air New Zealand Profit Hit by Fuel Prices, Disasters
By Gyles Beckford, Reuters | Aug. 24, 2011
National carrier Air New Zealand Ltd. reported a lower profit on Thursday, as natural disasters in key markets and high fuel prices crimped earnings.
The airline posted a net profit of NZ$81 million (US$66.9 million) for the year ended June 30, compared with NZ$82 million last year.
Normalised profit before tax was NZ$75 million compared with NZ$90 million last year. It said it had recorded a NZ$37 million loss in the second half of the year.
A survey of analysts by Thomson Reuters had forecast a profit of around NZ$74.5 million.
Last month the airline's chief financial officer reaffirmed March guidance that it expected to lose money in the second half of the year because of high fuel prices and the impact of the earthquakes in Christchurch and Japan. Normalised full year earnings were likely to be below NZ$100 million.
It said it expected better earnings and results in the coming year as long as the world economy holds up and fuel prices do not rise further.
The company declared a final dividend of 2.5 cents per share, compared with 4 cents a share last year.
Air New Zealand shares, around 73 percent owned by the government, closed on Wednesday at NZ$1.11. So far this year the company has fallen nearly 10 percent against a flat showing for the benchmark NZX-50 index.
The carrier has taken a 15 percent stake in Australian carrier Virgin Australia , with whom it has a commercial alliance, to combat aggressive competition from Australian carrier Qantas and its low cost offshoot Jetstar on routes between the two countries.
It has also set up code sharing deals with Virgin Atlantic and Etihad.
The New Zealand government has indicated that if it is re-elected at this year's election it plans to sell down its stake in the airline, but will retain majority control.