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Thread: AIR - Air NZ.

  1. #14421
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Beagle View Post
    You've overlooked their hedging program mate. Management are confident around the mid point of forecast of $370m before tax and are not content with that, hence the ongoing comprehensive operational review.
    Says ‘inclusive of hedging’

    Forecast fuel cost for H2 is $594m based on average of US$75 / barrel fuel (inclusive of hedging)

    If it stays over US$80 add at least another $20m to that

    That’s how I read that chart ....which I think is cool
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  2. #14422
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by winner69 View Post
    Says ‘inclusive of hedging’

    Forecast fuel cost for H2 is $594m based on average of US$75 / barrel fuel (inclusive of hedging)

    If it stays over US$80 add at least another $20m to that

    That’s how I read that chart ....which I think is cool
    Fair enough I can't cover everything at once mate. During the call they sounded confident around the mid point of the forecast and very confident about cost efficiencies going forward from there as direct and indirect costs around the RR engine issue fall away. I'm very much focused on (what I know we dislike but it is) normalised profitability for FY20 excluding non repeating RR impact. I see a very sound medium term case for investment on the basis of yield at around the current level.
    Last edited by Beagle; 28-02-2019 at 11:54 AM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  3. #14423
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by Beagle View Post
    Fair enough I can't cover everything at once. During the call they sounded confident around the mid point of the forecast and very confident about cost efficiencies going forward from there as direct and indirect costs around the RR engine issue fall away.
    I can now understand their confidence - RR Engine design has recently been moved to Germany! BREXIT directly helping Air NZ and other airlines suffering of poor British Engineering!

    From the latest Wall Street Breakfast:

    Brexit preparations... Boeing (NYSE:BA) is shifting spare parts between its distribution centers in the U.K. and across the globe, according to Ken Shaw, head of supply chain management. Earlier this month, Airbus (OTCPK:EADSY) spent tens of millions of euros on stockpiling parts and securing IT systems. Brexit worries have also led Rolls-Royce (OTCPK:RYCEY) to move the home for its best-known jet engine designs to Germany to avoid regulatory delays or sales disruptions.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  4. #14424
    Speedy Az winner69's Avatar
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    Quote Originally Posted by BlackPeter View Post
    I can now understand their confidence - RR Engine design has recently been moved to Germany! BREXIT directly helping Air NZ and other airlines suffering of poor British Engineering!

    From the latest Wall Street Breakfast:
    Bad news for one shareholder -Some German engines seize up after a few days
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  5. #14425
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by winner69 View Post
    Bad news for one shareholder -Some German engines seize up after a few days
    Hmm - if you refer to beagles recent user experience: Are you sure his car had a German engine? I thought he was buying a Holden, which would be GM ...
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  6. #14426
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by BlackPeter View Post
    Hmm - if you refer to beagles recent user experience: Are you sure his car had a German engine? I thought he was buying a Holden, which would be GM ...
    Yes it is made in Germany but has a GM engine installed that was probably assembled in a plant in Mexico (which would explain everything). https://en.wikipedia.org/wiki/GM_High_Feature_engine
    Last edited by Beagle; 28-02-2019 at 12:43 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  7. #14427
    Speedy Az winner69's Avatar
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    Quote Originally Posted by BlackPeter View Post
    Hmm - if you refer to beagles recent user experience: Are you sure his car had a German engine? I thought he was buying a Holden, which would be GM ...
    https://en.m.wikipedia.org/wiki/Holden_Commodore_(ZB)
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  8. #14428
    Legend peat's Avatar
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    Quote Originally Posted by Beagle View Post
    Can we get back on topic to discussing the financial performance and outlook for AIR now, seeing as they have just reported...
    Some more well considered opinions on that wouldn't go amiss...

    I think we're headed back to ~ 30 cps earnings next year which out the stock on a forward PE of 8.5 and a gross yield as mentioned above of 12%.
    Pretty compelling metrics for a well managed company that's been going nearly 80 years.
    Isn't this where we mention cyclical and coming down off a peak?
    And longevity only via state support so not exactly a boasting point cf HLG.

    I guess I'm just feeling conservative these days with stock selection and have a deep seated fear of airlines despite Warrens change of heart.
    Those P+L's , whew they turn on the proverbial dime.

    And yeh no Jetstar or Holden haha jk dont really care, topicality can be over rated.
    For clarity, nothing I say is advice....

  9. #14429
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by peat View Post
    Isn't this where we mention cyclical and coming down off a peak?
    And longevity only via state support so not exactly a boasting point cf HLG.

    I guess I'm just feeling conservative these days with stock selection and have a deep seated fear of airlines despite Warrens change of heart.
    Those P+L's , whew they turn on the proverbial dime.
    Airlines not for everyone I agree but analysts don't see it the way you do and neither do I, (see earnings growth estimates for FY20 and FY21 coming off a cyclical low in FY19 base this year) https://www.marketscreener.com/AIR-N...07/financials/
    Management extremely confident about their ability to pay the current level of 22 cps annual dividends going forward. 12% gross yield so dividends hounds will probably stop reading right here, that's all they need to know. They proudly noted during the call that AIR had only cut dividends twice in the last 15 years. Once for the GFC and the other for the Chch earthquakes.
    Last edited by Beagle; 28-02-2019 at 12:52 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  10. #14430
    Reincarnated Panthera Snow Leopard's Avatar
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    Quote Originally Posted by Beagle View Post
    I think you should disclose that you work for JetStar as chief of public relations Thank you for the humour, I could not disagree more.
    Bit much coming from Luxon's Pet Poodle

    So profit down and declining share price but pays a good dividend - much like TRA.

    So applying the Beagle formula in it's generous PE * 8.5 that would value AIR at
    $0.24 * 8.5 =
    $2.04.

    Luckily I did not use his PE * 7.5 version.

    But seriously folks, OK result but I will wait for the $2.04 before buying.
    om mani peme hum

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