Ann: FLLYR: AIR: Air New Zealand Announces Record Annual Result

• Release Date: 26/08/15 08:41
• Summary: FLLYR: AIR: Air New Zealand Announces Record Annual Result
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					AIR
26/08/2015 08:41
FLLYR
NOT PRICE SENSITIVE
REL: 0841 HRS Air New Zealand Limited (NS)

FLLYR: AIR: Air New Zealand Announces Record Annual Result

Air New Zealand has today announced its 2015 annual result with normalised
earnings  before taxation of $496 million for the 2015 financial year, an
increase of 49 percent on the prior year. Statutory earnings before taxation
were $474 million, while statutory net profit after taxation was $327
million, an increase of 24 percent.

Capacity growth supported by strong demand, cost efficiencies and lower fuel
prices has driven a year of significant earnings growth. Very strong
operating cash flow of $1.1 billion was up 51 percent on the prior year.

The Board has declared a fully imputed final ordinary dividend of 9.5 cents
per share, an increase of 73 percent on the prior year, resulting in a 2015
full year ordinary dividend of 16.0 cents per share, an increase of 60
percent on the prior year.

"Our strategic initiatives over the past three years have positioned us well
to take advantage of market dynamics which have contributed to these
results," Chairman Tony Carter says.

"Our investment in new efficient aircraft, the continued development of our
alliance partner relationships, world class sales and marketing execution,
great customer service and strong focus on cost management have enabled Air
New Zealand to achieve revenue growth against a stable cost base.

"We indicated at our interim result that lower fuel prices and current sales
momentum have strengthened the company's outlook, and this has seen the
delivery of a record annual result that our shareholders and staff can be
immensely proud of," Mr Carter says.

"Given the current known operating environment, along with our increased
capacity and improved operating efficiencies, we expect to achieve
significant earnings growth in the coming year."

Chief Executive Officer Christopher Luxon says a continued focus on superior
commercial results, enhancing the customer experience and further developing
the airline's people and culture have resulted in a terrific 2015 financial
year across all three of these commitments.

"We remain focused on the Pacific Rim as our growth strategy and will
continue to provide the best connections, product and service at competitive
prices, to maintain and grow our market share in these regions.  Next year
will see further capacity growth in international markets as we look forward
to new routes starting in December 2015 to Houston and Buenos Aires.  And
while we are gearing up to launch these exciting new routes we have a team
assessing potential new opportunities in Australia, Asia and the Americas,"
Mr Luxon says.

"We operate one of the most comprehensive domestic jet and regional turboprop
networks in the world renowned for frequency, service and reliability. Our
domestic operation will grow eight percent in the year ahead, while at the
same time maintaining our price leadership with more than two million
domestic fares expected to be offered for sale for less than $100."

Mr Luxon says Air New Zealand has spent considerable time and effort
enhancing the on-the-ground and in-flight experience in 2015 financial year.

"This has resulted in a further lift in customer satisfaction including
amongst our most frequent flyers, and has seen the airline receive many
awards in the past year."

Air New Zealand's loyalty programme, Airpoints, continues to grow at pace
with around 1.9 million members now, which is up almost 17 percent on the
previous year. Australia remained the biggest overseas membership base with
growth in that market exceeding 20 percent during the year.

"This doesn't surprise us as more Australians than ever are embracing the Air
New Zealand product and service offering whether it be on the Tasman, to the
Pacific Islands, North America or South America."

A cornerstone focus for Air New Zealand in 2015 financial year was knowing
its customers better than ever before through the enhanced use of data and
analytics.

"Air New Zealand will deliver more personalised and relevant offers to its
customers in the future through the use of data and analytics. We have the
systems, people and global partners in place to see the airline be more
relevant than ever in our customers' lives and in turn to deliver even more
commercially through the Airpoints programme," Mr Luxon says.

While Air New Zealand's record annual result is good news for shareholders,
it is also a great outcome for the airline's employees.

"Our people are critical to the airline's success.  In the last year we have
established a Company Performance Bonus to allow all Air New Zealanders to
benefit when we deliver superior commercial results, and this will be paid to
eligible employees next week." Mr Luxon says.

The bonus will see 8,000 staff who are not on other incentive programmes,
receive payments of up to $1,400.

____________________________________

Result Highlights:

o Normalised earnings before tax of $496 million, up 49%
o Statutory net profit before tax of $474 million, up 32%
o Statutory net profit after tax of $327 million, up 24%
o Result includes equity accounted losses of $29 million from Virgin
Australia
o Operating revenue of $4.9 billion, up 5.9% (6.3% excluding foreign
exchange)
o Passenger revenue of $4.1 billion, up 6.8% (7.5% excluding foreign
exchange)
o Operating cash flow of $1.1 billion, up 51%
o Strong cash position of $1.32 billion, up 7.1%
o Gearing at 52.4%
o Fully imputed final ordinary dividend of 9.5 cents per share, an increase
of 73%, bringing 2015 full year fully imputed ordinary dividend of 16.0 cents
per share, an increase of 60%
o Expected aircraft capital expenditure of $2.6 billion over the next 4 years

o Upgraded credit rating - Moody's Baa2 investment grade, outlook stable

See attached for reconciliation of normalised earnings before taxation.

Ends
Issued by Air New Zealand Public Affairs ph +64 21 747 320
End CA:00269074 For:AIR    Type:FLLYR      Time:2015-08-26 08:41:17