South Pac Share and Oil Price Weekly Update

    Each week the Blue Swan Daily brings you a snap shot of the key share and oil prices related to all things travel and aviation.

    Monthly Share Price Snapshot:

    Source: ASX (Prices in AUD)

    Key news stories of the week

    Virgin Australia

    Virgin Australia Group released financial results for H1FY2018 last week. CEO and MD John Borghetti said the group generated a “significantly improved” underlying financial performance in H1FY2018, recording “one of our strongest ever first half results”. The AUD102.5 million (USD80 million) underlying profit before tax result was up 142.3%, driven by a “number of factors including unit revenue and passenger growth, capacity and network optimisation and further progress in implementing the Better Business program” said Mr Borghetti. The Virgin Australia Group grew RPKs by 2.4% and revenue passengers by 2.3%.

    The Virgin Australia Group board also confirmed there is no current intention to privatise the group and announced a share buy-back facility to provide liquidity to “unmarketable” parcel holders. The group will offer an opt-out facility to buy-back unmarketable parcels of shares from unmarketable parcel holders at a price of AUD0.30 per share. An unmarketable parcel of shares is defined as a shareholding valued at less than AUD500 (USD390), comprising 1666 shares or less as of 06-Mar-2018. Virgin Australia Group chairman Elizabeth Bryan said the board “remains conscious that the company has a small free float and a register made up of more than 38,000 shareholders, of whom approximately 21,000 hold unmarketable parcels of shares worth less than AUD500”.

    Regional Express

    Regional Express (Rex) also released its financial results for H1FY2018 last week. Rex executive chairman Lim Kim Hai reported H1FY2018 passenger traffic rose 3.6% year-on-year registering a “steady improvement” and “continuing the trend that was observed in FY2017”. Mr Hai reported charter activity also increased, “indicating that the worldwide economic recovery is having its effect in Australia”. Mr Hai reported the Rex board believes that H2FY2018 will also see improvement over the prior period “although not by such a spectacular amount”.

    The carrier’s board approved, for the first time ever, an interim dividend of AUD0.04 per share (USD0.031) (fully franked). Mr Hai stated the Rex board is committed to a healthy dividend pay-out ratio and if the carrier achieves its full year earnings forecast then the board believes that the total dividend pay-out for FY2018 “should at least match” that of FY2017. 

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