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Air New Zealand posts 6% drop in interim profit
[WELLINGTON] Air New Zealand on Wednesday unveiled a six per cent fall in half-year net profit but said low fuel prices meant it remained on track for "significant" earnings growth in the second half.
New Zealand's flag carrier said profit for the six months to the end of December was NZ$133 million (US$100 million), down from the record NZ$141 million in the previous period.
The airline said normalised earnings, which strips out factors such as foreign exchange hedging, rose 20 per cent to NZ$216 million.
Chairman Tony Carter said the result demonstrated that Air New Zealand was "one of the few airlines in the world that is able to generate sustainable profits".
"The result is one that shareholders can be very pleased with," he said.
Mr Carter reiterated guidance from last year that Air New Zealand could expect a significant additional improvement in earnings in the second half of the financial year if jet fuel price levels remained consistent.
"Fuel prices are lower than November and the sales momentum has been maintained, further strengthening the company's outlook for the current year and beyond," he said.
The result included a NZ$14 million loss attributed to Air New Zealand's stake in Virgin Australia, which last week announced it had cut its interim loss to A$47.8 million.
Chief executive Christopher Luxon said the airline was "very comfortable" with its Virgin holding, which gives it exposure to the Australian domestic market.
"Our 25.92 per cent shareholding in Virgin Australia remains a key pillar of our Australasian strategy, and it has been pleasing to see that company delivering better results as market conditions improve in domestic Australia," he said.
Air New Zealand shares were up 2.52 per cent at NZ$2.64 at midday on an NZX 50 index that was up 0.82 per cent overall.