Anyone Calling Sub $2 for QANTAS ?, page-1336

I will attempt to provide a comprehensive unbiased analysis on QAN regarding the current market conditions and based on key data from the balance sheet and the market sentiment which is what this website is designed for.

Net property plant and equipment remains relatively the same as 2019 period not taking into account the fact that the majority of the Airbus fleet would be considered as a liability since there is no demand for aircraft of that size for the current market. While these aircraft are incurring storage and maintenance costs they produce no income and should therefore be written off. With analysts not expecting 2019 air traffic numbers to return until 2024 one would not expect a need for the Airbus until that time.

The likelihood of QAN remaining solvent until that period depends on the health of their balance sheet which I will try to explain using key figures from their most recent reporting period.

All figures are relating to activity from 2020.
Long term Debt - AUD$6,343Billion
Current Debt - AUD$1,392Billion
Total Debt - AUD$7,735Billion

Equity from the balance sheet comes to AUD$756Million with current liabilities being double the current assets.
Market Cap is steady and rising at AUD$10,37Billion

In the last 2 quarters of 2020 QAN issued AUD$900Million in new shares and a total of AUD$1.56Billion in new debt most of which has been kept in cash reserves.

Total liquidity in cash is at AUD$2,606Billion (Cash on hand counts towards the equity of AUD$756Million)
If the cash balance falls below AUD$2BIllion the company will be precarious with a near negative equity position.

Taking into account a 3% interest rate on the total debt QAN will be expected to pay a minimum of AUD$232Million in interest payments alone on its loan facilities per year. If principle repayments are necessary this will be much higher. On top of the loan repayments there is also to upkeep of loss making routes and maintenance and upkeep of unused facilities and unused aircraft.

With the cash balance on hand I can expect QAN to remain solvent for 2 years unless more funds are received from a CR or other means.
However at this rate I can see negative equity being a reality within 12 months.

DYOR
Regards