Reporting Season

Qantas posts -$1.2bn loss, issues $400m share buyback out of left field; shares briefly surge

Thu 25 Aug 22, 12:36pm (AEDT)
Qantas Travel Plane Flight
Source: iStock

Key Points

  • Qantas posted a -$1.2bn loss for FY22, almost half compared to a year ago
  • Domestic flying rebounded to 103% of pre-covid levels by 30 June and expected to trend higher

Qantas (ASX: QAN) posted an outsized -$1.19bn statutory loss in FY22, reflecting covid outbreaks in the first-half and restart costs when lockdowns were finally lifted.

The loss for the year was well-above Bloomberg estimates of -$855.8m. The company's stock still managed to rally as much as 10.4% in early trade.

Results at a glance:

Full year

2022

2021

% change

Revenue ($m)

9,108

5,934

53.5

EBITDA ($m)

281

410

-31.5

Statutory loss before tax ($m)

-1,191

-2,299

-48.2

Statutory loss ($m)

-860

-1,692

-49.2

Source: Qantas | Table: Market Index

The tale of two stories

The result is rather abysmal at face value as Qantas continues to incinerate cash amid labour shortages, surging fuel costs and industry wide inflation.

“This result takes the Statutory Loss Before Tax impact of COVID on the Qantas Group to nearly $7 billion and our total revenue losses to $25 billion. These figures are staggering and getting through to the other side has obviously been tough," said CEO Alan Joyce.

Through all the losses and government subsidies, Qantas had the audacity to announce a $400m on-market share buyback.

Still, the pent-up travel demand narrative continues to gather momentum.

"Total domestic flying averaged 63 per cent of pre-COVID levels for the year and reached 103 per cent by 30 June," Qantas said in a statement.

Across Qantas and Jetstar, revenue intakes from leisure bookings in the fourth quarter were approximately 125% of pre-covid levels and business purpose travel was around 90%.

The recovery of international flights remains sluggish at best, averaging just 17% of pre-covid levels for FY22 but improved to 49% by 30 June.

"Globally, airlines are constrained by aircraft and labour availability in returning to pre-COVID capacity levels despite high levels of demand," noted Qantas.

Outlook

Domestic demand was noted as "very strong in 4Q21 across both leisure and business travel segments" and expected to rebound further as capacity is restored.

To meet demand, Qantas and Jetstar domestic plans to ramp up to 100% and 120% of capacity in the second-half of 2022.

International border closure and quarantine restrictions are expected to ease once 80% of eligible Australians are vaccinated, said Qantas

The company expects international capacity to bounce back to 50-70% in the fourth quarter of 2022.

A short-lived rally

Qantas shares hit session highs of 10.4% on Thursday. Perhaps a rather unexpected upthrust in wake of the massive -$1.86bn full year loss.

The shares rallied to a two-and-a-half month high and also pushed through the key 200-day moving average (blue).

The rally was short-lived, with Qantas shares currently up 5.8%.

Qantas share price chart
Qantas share price chart (Source: TradingView)

 

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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