Profit loss announcement drops Qantas shares to all time low | WPN World People News

Australian flag carrier Qantas has warned its annual profit will drop by up to 91 per cent, sending its shares to an all-time low amid investor fears.

Qantas chief executive Alan Joyce warned that this financial year's pre-tax profit will fall to between $50 million and $100 million from $552 million last year.

Joyce said it would be a bottom-line loss for the year, but he declined to offer a forecast.

Joyce's announcement that flummoxed investors led to shares to a record low close, down 26.5c to $1.155, wiping $600 million off the value of the company, which has almost halved in value in a year.

According to The Australian newspaper, the company is now valued at $2.6 billion. That compares with Airlines Partners Australia's $11 billion private equity takeover offer that shareholders rejected for the airline in 2006.

The firm blamed the downgrade on a worsening global aviation environment, driven by high fuel prices that pushed up the airline's annual bill by $700 million to a record $4.4 billion, and a fall in yields due to increased international competition and domestic capacity increases.

It revealed that earnings before interest and tax (EBIT) at its international unit would blow out from $216 million last year to $450 million this year.

Chief financial officer of the airline Gareth Evans said cash flow was holding up. "We still retain a significant amount of cash on the balance sheet: over $3 billion. We still retain significant flexibility in our capital pipeline, which we've demonstrated a number of times over the last six, 12, 18 months, and we still hold an investment-grade credit rating which gives us access to a wide variety of different sources of funding. So we're very comfortable in that position."

Source: Europe News.Net