Air New Zealand (AIR) H2 2024 earnings summary

Executive summary

• Transported 16.5 million passengers, up 4% year-over-year, with on-time performance at 79.4%.

• Customer satisfaction returned to pre-COVID levels, supported by digital enhancements and Airpoints membership growth of 14% to over 4.6 million.

• Awarded New Zealand's Most Attractive Employer, reflecting strong team engagement.

• Earnings before taxation fell to NZD 222 million, down 61% year-over-year; net profit after tax was NZD 146 million, down 65%.

• Ordinary dividend for FY24 totaled 3.5 cents per share.

Financial highlights

• Operating revenue reached NZD 6.8 billion, up 7% year-over-year, with passenger revenue up 11% to NZD 5.9 billion.

• Cargo revenue was NZD 459 million, down 27% year-over-year but 18% above pre-COVID levels.

• Liquidity ended at NZD 1.5 billion; net debt to EBITDA ratio at 0.8x.

• Operating cash flow dropped 56% to NZD 810 million; gross debt at NZD 2.8 billion.

• ROIC was 9.7%, down from 22.3% last year.

Outlook and guidance

• Capacity growth constrained in H1 FY25 due to ongoing aircraft maintenance issues; group capacity expected to be down 1% to flat versus FY24.

• Challenging trading conditions expected to persist into H1 FY25, with some relief anticipated as aircraft return to service in H2.

• No formal earnings guidance provided due to continued uncertainty.

• Targeted cost adjustments, including a 2% reduction in headcount, are planned.

• Aircraft-related capital expenditure of NZD 3.2 billion is planned over the next five years.