Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Qantas share price takes flight following FY21 report

We look at the highlights from the blue-chip airline’s full-year report.

Qantas share price takes flight following FY21 report Source: Bloomberg

The Qantas (ASX: QAN) share price rallied hard on Thursday, 26 August, after the blue-chip airline released its FY21 results to the market.

In isolation, that rally may seem surprising. The airline after all, posted a heavy loss before tax and saw billions of revenue stripped from its operations in FY21 as a result of the pandemic.

Of course, much of that was already known by the market heading into today’s results; the stock, to be sure, had been accordingly bid lower prior to their release. To that end, the market was likely more interested in management commentary around a potential reopening and its balance sheet strength, opposed to the above noted losses, which are assumed to be ‘temporary’.

FY21 results

On the top-line, Qantas saw its revenue collapse, coming in at $2,745 million for the full-year, down from FY20 and down from pre-covid levels of $6,098 million, booked in fiscal 2019.

Management quantified the impact of the pandemic, saying total revenue lost as a result of covid-19 has now topped $16 billion. This has been driven not only by international border closures, but oft sporadic and unpredictable covid outbreaks. The Greater Sydney covid situation is illustrative of such issues, as was Victoria’s protracted lockdown in 2020.

Off the back of this, the airline has seen its profits turn negative, with Qantas posting an underlying loss before tax of $1.83 billion in fiscal 2021 and a statutory loss of $2.35 billion. That statutory loss was higher as a result of redundancies and write-downs.

Click here to read our beginners’ guide to fundamental analysis.

The FY21 results weren't all bad news mind you, with Qantas highlighting a number of constructive developments it has made or is currently making. These included:

  • Commanding a total liquidity position of $3.8 billion
  • Reducing total net debt to $5.9 billion over the prior year
  • Delivering underlying earnings (EBIT) of $272 million from the Qantas Loyalty segment
  • The vast majority – 95% of domestic flying operations – are cash positive
  • Delivering $650 million in cost saving benefits in fiscal 2021

The outlook

Looking ahead, the airline remains realistically aware of the current impact border closures and other covid-related measures are set to have on Qantas’ operational performance in the current/ upcoming half.

Quantifying that impact, management said they expected a $1.4 billion hit to underlying EBITDA in H1 FY22.

'This estimate assumes borders in Victoria and New South Wales re-open in early December 2021. If borders open earlier and flying returns more quickly, capacity can be adjusted accordingly,’ management said.

To stock closed Thursday's session up 3.49% to $5.04 per share.

Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.