Regional Express (Rex) has reported modest profit and revenue growth in the first half of the 2019 financial year, which the company’s boss described as a “particularly difficult” period.
Australia’s largest independent regional airline posted a statutory net profit after tax of $9.8 million for the six months to 31 December 2018 – up nearly eight per cent per cent on the prior corresponding period.
Rex’s half-yearly overall revenue rose almost nine per cent to $163.8 million, with passenger revenue up just over nine per cent per cent to $145.4 million.
The number of passengers for the regional airline increased by nearly five per cent during the six-month period to 664,832.
These positive results were in the face of a 51 per cent hike in fuel costs to $23 million. However, Rex’s executive chairman told shareholders that fuel for the second half of FY19 has been hedged and will translate to a $2.3 million reduction in costs.
Lim Kim Hai said the first six months of the 2019 fiscal year was “particularly difficult with fuel prices skyrocketing and with the sharp slowdown of economic activity from December due to the Sino-US trade war”.
“I am pleased to report that Rex has bucked the worldwide airline trend of steep decline in profitability by turning in a modest three per cent improvement in profit before tax.”
Lim said there were too many uncertainties in the Australian and global economies for the company’s board to provide a specific profit forecast.
“However, the cash flow of the company has remained strong and the board has decided to maintain a full-franked dividend of four cents per share,” he said.
“The board remains committed to a healthy final dividend payout for FY19 if the group turns in an improvement in earnings.”