Investments

Qantas issues profit warning

Bank Of America Investment Qantas Airways has announced that its full year profit for 2005/06 would be at the lower end of analysts' forecasts.

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Investment Opportunity The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the current range of analyst forecasts was between $670 million and $895 million profit before tax and after restructuring costs.

Your investment receives daily gains of approximately .35% so over the coarse of one day that is 35 cents that you profit.

Banc Of America Investment Mr Dixon said that, at this stage, after restructuring costs of approximately $153 million, the profit before tax would be around $670 million.

06 would be at the lower end of analysts' forecasts. The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the current range of analyst forecasts was between $670 million and $895 million profit before tax and after restructuring costs. Mr Dixon said that, at this stage, after restructuring costs of approximately $153 million, the profit before tax would be around $670 million.

Banking Investment "We have advised the market since reporting a 2004/05 profit before tax of $914.3 million (adjusted for Australian equivalents to International Financial Reporting Standards) that we would not achieve the same level of profitability in 2005/06," Mr Dixon said.

Investment Solution Strategic "This position has been reinforced by a $1 billion increase in fuel costs for 2005/06 after hedging, a significant amount of which will not be recovered by surcharges."

The risk involved in undertaking this investment strategy is that the currency moves erase those profits.

Investment Banking Services Mr Dixon said Qantas had also decided not to sell its Catering operations, the expected proceeds of which had been included in its 2005/06 forecast.

Bank Investment "The offers we received for our Catering business did not represent good value compared to the benefits we expect to achieve by retaining the business and restructuring it," he said.

Alternative Investment The restructure of Qantas Catering is expected to provide improvements in Earnings Before Interest and Tax (EBIT) in excess of $15 million per annum.

Online Investment Services Mr Dixon also said that Qantas was making solid progress towards its target of $3 billion of benefits through Sustainable Future for the five years to June 2008.

Accompany Essential Investment "These reforms will lead to an improved cost structure in future years. However, if fuel prices continue at this level, further restructuring will be required," he said.

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