(Reuters) -Australian carrier Qantas Airways on Thursday posted its second-best annual underlying earnings and announced the highest full-year dividend payout in 17 years, as profits are bolstered by strong travel demand across its routes.
Qantas, which has been striving to rebuild its reputation after a string of damaging years since the pandemic, reported strong demand across its domestic and international divisions, as well as its budget arm, Jetstar.
Robust earnings growth and financial strength
allowed the flag carrier to announce a final dividend of 16.5 Australian cents a share and a special dividend of 9.9 Australian cents apiece.
Alongside distributions announced in February, the full-year ordinary dividend payout of 33 AU cents per share is the highest in 17 years. Full-year special dividends of 19.8 AU cents are also being paid for the first time since fiscal 2000.
"Continuing strong demand across all market segments, combined with our dual brand strategy, helped the group grow earnings," said CEO Vanessa Hudson.
"Hudson inherited a mammoth challenge in balancing shareholder returns, rebuilding trust with consumers, and satisfying regulators," Josh Gilbert, a market analyst at eToro, said.
"Just under two years in the job, and the results speak for themselves," he said, adding that the return of the dividends is a "great way to keep investors pleased".
For the year ended June 30, Qantas reported underlying profit before tax of A$2.39 billion ($1.55 billion), beating the Visible Alpha consensus estimate of A$2.38 billion and above the prior year's A$2.08 billion.
It was its second-best showing, only below fiscal 2023, when it reported underlying pre-tax earnings of A$2.47 billion.
Qantas also expects the strong demand to continue into the first half of fiscal 2026, guiding to a 3% to 5% growth in domestic unit revenue, compared with a 5% growth in the prior year. It expects international revenue to grow 2%-3% in the first half.
The airline also placed an order for 20 additional Airbus' narrowbody A321XLR aircraft as part of its broader ongoing fleet renewal program.
($1 = 1.5389 Australian dollars)
(Reporting by Sameer Manekar and Roshan Thomas in Bengaluru; Editing by Alan Barona)
