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Regional Express (Rex) has posted an 8.3 per cent lift in first half net profit and says the outlook for the rest of 2014/15 is moderately positive despite uncertain passenger demand.
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The company reported net profit of $3.9 million for the six months to December 31 2014, an increase of $0.3 million from $3.6 million in the the prior corresponding period.
Revenue rose 0.4 per cent to $129.8 million.
Rex chief financial officer Neville Howell said the outlook was uncertain, given passenger numbers softened at the start of the second half and lower oil prices could have a negative impact on the resources sector.
On a positive note, Rex said the initial weeks of its Queensland government route contracts that started on January 1 2015 – the regional carrier won five contracts, up from three previously, at the most recent tender held in 2014 – showed the new routes were performing well.
Also, the lower fuel prices were expected to result in a $2 million saving for the full 2014/15 year. Fuel was 14.7 per cent of Rex’s total costs in the first half of 2014/15, compared with 16.8 per cent in the prior corresponding period. The 2013/14 figure included the impact of the carbon tax, Rex said.
“The board remains optimistic that the net result of the headwinds and tailwinds will still be moderately positive for the Group and is committed to paying a final dividend if this materialises,” Howell said in a statement.
Rex cut some routes in regional NSW in September in a bid to stem losses on some marginal routes.
No dividend was declared.
However, Rex said in a slide presentation accompanying the first half results the board was committed to paying a full year dividend if the profit outlook was realised.
Rex shares closed Tuesday’s training day down 9.5 cents, or 8.84 per cent at 98 cents.
