Air New Zealand (AIR) H2 2024 earnings summary

Executive summary

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

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

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

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

• Dividend of NZD 0.035 per share declared for FY24.

Financial highlights

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

• Liquidity ended at NZD 1.5 billion, including a new $250 million revolving credit facility; net debt to EBITDA at 0.8x.

• Operating cash flow dropped 56% to $810 million; cash position at $1.3 billion.

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

• Return on invested capital (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, or ~92% of pre-COVID levels.

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

• No formal guidance provided for FY25 due to uncertainty.

• Underlying CASK expected to remain under pressure in FY25.