Ann: HALFYR: AIR: Air New Zealand's half year

• Release Date: 28/02/13 11:03
• Summary: HALFYR: AIR: Air New Zealand's half year earnings up more than 300%
• Price Sensitive: No
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AIR
28/02/2013 09:03
HALFYR

REL: 0903 HRS Air New Zealand Limited (NS)

HALFYR: AIR: Air New Zealand's half year earnings up more than 300%

Air New Zealand has lifted its normalised earnings* before taxation for the
first half of the 2013 financial year by more than 300 percent. Normalised
earnings before taxation were $139 million, up from $33 million in the
previous corresponding period. Statutory net profit after taxation increased
$62 million to $100 million.

Chairman John Palmer described the interim profit result as excellent
progress when put against the backdrop of a sluggish economic recovery and
ongoing challenges facing the airline industry.

The Board has declared a fully imputed interim dividend of 3.0 cents per
share, an increase of 50 percent on the previous corresponding period
combined with the benefit of full imputation.

"This is the best interim profit result for five years.  The substantial
change programme the airline has been implementing has positioned the
business for consistent growth and sustainable profitability over the coming
years," Mr Palmer says.

Backing up the airline's confidence in its future, the company will lease two
additional Boeing 777-300ER aircraft to join the fleet in 2014.

Chief Executive Officer Christopher Luxon says Air New Zealand is one of the
strongest airlines financially and has a world class management team that is
resolutely focused on optimising and growing existing markets, combined with
developing new markets.

"We have a new leadership team with deep industry experience fused with fresh
perspectives from world class leaders who have joined us from other sectors.
The focus and energy within Air New Zealand is quite remarkable.  We are
stepping it up in all areas of the business to drive improved operational and
financial performance while further enhancing our award-winning customer
experience," Mr Luxon says.

"While aviation will always continue to have its challenges, we have a new
level of agility and we're more focused than ever on managing what is
controllable within our business."

Mr Luxon says Air New Zealand has seen increased demand on its domestic
routes, despite a slower than expected economic recovery. "It has been
particularly pleasing to see regional New Zealand embrace our commitment to
more deals every day."

"Our customers value our quality product offering, on-time performance and
competitive pricing. Watch this space for a range of market leadership
initiatives over the coming months," he says.

The Tasman and Pacific Islands remain a critical part of the airline's
network. Our alliance with Virgin Australia is proving very successful, and
our ownership interest of 19.99 percent reinforces this relationship. Our
Seats to Suit fare structure continues to be well received by our customers
and allows us to cater to a wide range of fares and service levels within
each aircraft we operate," Mr Luxon says.

The airline's cargo business has performed well also, with a 9 percent boost
in revenue to $164 million during the first half of the year. "This is an
outstanding performance given the difficulties many of our cargo competitors
have experienced globally," Mr Luxon says.

For the first time since the financial crisis, the international long haul
part of the network is profitable.  "A key driver in achieving this
turnaround has been getting our network right and improving our sales
execution," says Mr Luxon.

Mr Palmer says that, based on the company's current forecast of market demand
and fuel prices at current levels, the expectation is that normalised
earnings before taxation for the second half of the 2013 financial year will
comfortably exceed the corresponding period last year.

Key points:
o Normalised earnings* before taxation of $139 million, up more than 300
percent
o Statutory net profit after taxation of $100 million, up $62 million
o Operating revenue of $2.4 billion, up 3.4 percent
o Operating cash flow more than doubles to $343 million
o Gearing improves by 4.3 percentage points to 41.8 percent
o Fully imputed interim dividend of 3.0 cps, a 50 percent increase

* see attached document for details of Normalised Earnings
End CA:00233554 For:AIR    Type:HALFYR     Time:2013-02-28 09:03:38