AIR - Air NZ.

[iceman]

More bad publicity for AIR https://www.nzherald.co.nz/business/...ectid=12110581

[winner69]

More bad publicity for AIR https://www.nzherald.co.nz/business/...ectid=12110581

Just the daily trials and tribulations of an airline eh Iceman

Probably punters think they just unlucky if they get caught up in these incidents

Main thing is AIR continue to make heaps

[winner69]

Annual result much as expected

Next year going to make less -

Based upon current market conditions and assuming an average jet fuel price of US$85 per barrel, 2019 underlying earnings before taxation is expected to be in the range of $425 million to $525 million.

This excludes an estimated $30 million to $40 million impact from schedule changes prompted by the global Rolls-Royce engine issues.


With such a wide range makes you wonder why they bother put out a forecast ..all I know $385m is a long way from $540m and even $485m is not that good compared to $540m (10% down)

Never mind ...still making heaps and got heaps of cash to throw aroundbon new toys and staff bonuses and shareholders

[bull....]

good result , agree big downgrade in earnings next year

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-websit...646/285099.pdf

Based on mid point of forecast including engine issue costs, (finally they are coming clean and saying this is a real issue that's costing them serious money) pre tax profit is estimated at $440m compared to $540m this year. $440m compares to average analyst forecast as of yesterday for FY19 of $494m $54m less than previous estimate.
Mostly this is lower due to the impact of the RR issue, (an impact which the company appears to saying is non recoverable from RR?).
Final divvy as expected. Noting the forecast is based on a jet fuel price of $U.S.85.
I am hoping the RR issue will finally be resolved properly during the year ahead so the $30-40m cost is really an extraordinary item and normalized pre tax profit forecast at the mid point is $475m, more or less in line with analyst expectations of $494.
Shares about fair value in my opinion cum an 11 cent fully imputed divvy which is already priced in, in my opinion. Hold.

[Beagle]

Further thoughts. Analysts are generally positive on FY20 and indications are that the current dividend rate is sustainable.
The market is hungry for yield with ANZ Bank this week coming out and predicting the next move in interest rates is down !

Market will be disappointed with FY19 outlook which at mid point forecast treating the RR costs as a one-off is 4% below average analyst expectations.
Logic would suggest this might lead to a 4% correction in the SP from $3.41 yesterday to $3.27 today...but these things often overshoot so maybe we'll see $3.20 soon still trading cum an 11 cent divvy.

There is still the possibility of special'(s) in FY20 - FY 22 but forgetting about those what does the investment case on a yield basis look like going forward ?

At $3.20 cum divvy, (theoretical ex price of $3.09), investors are expecting gross divvies of 22 / 0.72 = 30.55 cps going forward which gives a gross yield of 9.9% plus the possibility of specials in due course. I think there's a sound investment case at that level and I would be prepared to add around there. Happy to hold a modest stake in the meantime.

Forward PE for FY19 looks to be about 11. Shares priced about right at present in my opinion.

[sb9]

https://www.nzherald.co.nz/business/...ectid=12111737

Boomer of a result from across the ditch for Qantas.

[Bobdn]

Cool, thanks for the info Beagle. The dividend returns are incredible with this company. I get these Motley Fool emails talking about dividend plays on the ftse yielding 5%!, and here we are with yields almost twice that. My net dividend is 8.3% now. I think 8.7% GROSS was the absolute highest big bank term deposit you could get in the 2000s. I remember thinking when the GFC hit "gee I wish I had got one of them 5 year term high term deposits when they available". No regrets now.

I'd like to celebrate by buying a model aircraft. I wonder if they'll be bring out a model A320neo? I'll stay away from the 787-9, almost got that one before the troubles.

https://merchandise.airnewzealand.co.nz/aircraft

[winner69]

https://www.nzherald.co.nz/business/...ectid=12111737

Boomer of a result from across the ditch for Qantas.

Pretty good airline that Qantas

[Beagle]

Pretty good airline that Qantas

Yeap that is a cracker. Shows their strong focus on cost control is paying dividends....something AIR need to work harder at.