Air NZ profits dip to $71m

Photo / Paul Estcourt

Air New Zealand says its financial performance should see a strong improvement next year after this morning announcing a 12 per cent fall in full year profits, down to $71m for the year to the end of June.

Earnings before taxation rose 21 per cent to $91m from 2011.

While profits are down, today's result will be seen as positive for the airline and its management, since analysts were forecasting a much larger profit fall, with some expecting profits of between $50 million and $63 million.

It also comes a week after Qantas posted a worse than expected annual loss of A$244 million.

The Australian carrier blamed the result on high fuel costs, a damaging labour dispute and intense competition on its international routes.

Air NZ chairman John Palmer said the airline was now "well positioned to continue the growth trajectory" that it was pursuing until 2008 before the financial crisis.

"We have come through some tough times and the worst impacts of natural disasters like the Christchurch earthquake and tsunami in Japan are behind us, which means growth opportunities are no longer suppressed. We view the future with optimism and are pursuing a clear strategy to strengthen our Australasian operations, while being ahead of target in restructuring our International long haul network to improve financial performance," he said.

A final dividend of 3.5c per share will be paid, taking total dividends for the year to 5.5c per share.

Chief executive Rob Fyfe said the airline had delivered "the most consistent and best relative financial performance of any Australasian airline over the past three years".

AIR NZ results:

• Normalised earnings before taxation of $91 million, up 21 per cent

• Statutory net profit after taxation of $71 million, down 12 per cent

• Operating revenue increased to $4.5 billion

• Gearing improved to 46.1 per cent

• Full year dividend of 5.5 cents per share

-Herald Online