Qantas posts $1.4b profit, Domino’s Pizza plunges on lower sales and consortium revises Origin Energy bid
Qantas chief executive officer Alan Joyce says the company was experiencing the recovery its shareholders have been waiting for.
After $7 billion-worth of losses over three years, Qantas (ASX: QAN) revealed on Thursday it was back in the black with a record underlying before tax profit of $1.4 billion for the December half.
The record profit compares to a $1.3 billion loss in the same period in 2021.
Qantas chief executive officer Alan Joyce said it is the recovery the company and its shareholders have been waiting for – with all business segments performing.
He said because the company has returned to profit, it is now able to reinvest in the business for the long-term, with new lounges, routes and aircraft.
The company has also launched a $500 million on-market share buy-back to add further value to the airline.
Despite the positive earnings news, Qantas’ shares slid almost 8% on Thursday after the announcement to a low of $5.97 before recovering slightly.
Domino’s Pizza takes a hit
Renowned pizza chain, Domino’s Pizza Enterprises (ASX: DMP) recorded a 21.5% drop in its underlying net profit after tax (NPAT) for the six months ending December (H1 FY2023) – prompting investors to dump the stock on Wednesday.
On the back of its lacklustre earnings, Domino’s share price plunged 24% from $71.36 to $54.37.
The company’s NPAT came in at $71.7 million for the period, and was impacted by lower-than-expected sales and inflation.
Domino’s chief executive officer and managing director Don Meij said the company’s response to combating inflation had not been optimal during the period, but it was confident in its strategy to grow order volumes, sales and earnings as FY2023 progresses.
Despite eventually lifting prices to combat inflation, Mr Meij said specific customer groups, particularly those requesting delivery, reduced ordering frequency resulting in December trade being “significantly” below expectations – particularly across its European operations.
As a result of the lower than anticipated earnings, Domino’s dividend for H1 FY2023 is down almost 24% to 67.4 cents per share (cps).
Smartgroup boss resigns
In other earnings news, employee management services provider Smartgroup Corporation (ASX: SIQ) achieved a full year net after tax profit of $61.2 million – 12% lower on the 2021 corresponding period.
Despite the reduced NPAT, Smartgroup noted it was at the top end of the guidance range it gave in November last year.
Smartgroup chief executive officer Tim Looi said the company’s operating cash flow was strong at $71.6 million and enabled the directors to declare a final ordinary franked dividend of 15cps – bringing total dividends for the 12 months ending December to 46cps.
He said the company had maintained a steady 2022 in the face of supply issues, inflation and rising interest rates.
Salary package growth rose from new and existing clients during the period – with the company now servicing 379,000 customers across Australia.
Following the earnings news, Mr Looi announced he was stepping down from the board after three years as managing director and chief executive officer and 14 years with the company.
Origin receives revised takeover offer
In the oil and gas space, Origin Energy’s (ASX: ORG) shares lifted despite a revised lower proposal from a consortium on Wednesday that valued it at $8.90 per share.
After completing due diligence, the consortium comprising Brookfield Asset Management and affiliates dropped the proposal from a non-binding offer of $9 per share in November last year.
The revised proposal does, however, include a US dollar cash component.
Origin holders have been offered $8.90 per share for the first 100,000 shares held. For stock owned above that threshold, holders will receive $4.334 per share plus US$3.19 (A$4.67) per share.
At the current exchange rate it equates to $9.004 per share for Origin holders selling more than 100,000 shares.
Origin’s board said the proposal had the potential to “deliver significant value to shareholders” and will progress discussions.
Cleanaway strains under labour shortages
In more earnings news, Cleanaway Waste Management (ASX: CWY) posted a 6.7% drop in statutory net profit to $49 million for H1 FY2023.
Although profits fell, gross revenue was up 30% to $1.78 billion, which chief executive officer Mark Schubert says reflects business growth and price increases.
The fall in profit was attributed largely to costs associated with outage of a medical waste facility and the acquisition and integration costs of GRL.
Mr Schubert added that company had also worm more overtime and labour hire expenses to supplement its workforce, which had shrunk its margins further.
The company is actively looking to widen its diversity and onboard more women as well as broaden its workforce with 672 roles available.