Qantas Airways Limited Power Points

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Qantas AirwaysLimited

Prepared by:VINCENT MICAHFARRUKH, MUHAMMAD BABURBUSAYO FEMI OJOKORNILOV VITALY


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COMPANY PROFILE

Australias Premium Airline

Founded in 1920

2nd oldest airline industry in theworld

Notable for its outstanding record for

safety

Covers 182 destinations in 44countries


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Business and Investment

Primary Business is transportation ofpassengers

Divided into three groups.

Commercial group:- Includes salesand distribution, commercial planning

and alliances

Customer and Marketing:- Includescustomer experience, cabin crew, in-

flight services and marketing


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Flight route Operating around 5,600 flights a

week to 59 cities and regional

destinations in all states andmainland territories

Fleets

Operates a fleet of 252 aircraft,comprising of Boeing 747s, 767s,737s and 717s, Airbus A380s, A330sand A320s, Bombardier Dash 8s andBombardier 400s


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Cooperate SocialResponsibilities

The Qantas foundation, establishedas a charitable trust in 2008.

The foundation also aims toconsolidate and expand on some ofthe Qantas Groups existingcharitable and communityendeavours

Others environment social involvesreducing the impact of carbonemissions on the environment,


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Strategies

5 year strategic plan.

Changes are expected to strip tens of

millions of dollars of operating costsThese include Cutting :1000 jobs

from its 36000 workforce

Shifting its base closer to Asia Changing its fleet plan by buying lots

of the fuel efficient Airbus

Seeking more strategic alliances


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Year/ Ratio 2007 2008 2009 2010 2011

Return on total assets (ROA) 4.01% 3.77% 0.71% 0.86% 1.26%

Return on ordinary

shareholders' funds(ROSF) 8.56% 8.19% 1.66% 1.95% 2.89%

Return on capital Employed

(ROCE) 10.70% 8.44% 2.15% 2.82% 3.86%

Gross profit margin 7.34% 7.21% 1.57% 2.27% 1.76%

Net profit Margin 5.18% 4.71% 0.98% 1.24% 1.76%

Return on Equity 12.68% 12.94% 2.48% 2.89% 4.26%

Profitability Ratio


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Financial Gearing Ratio

The gearing ratio is the proportionof a company's debt to its equity

where a high gearing ratio representsa high proportion of debt to equityand Vice-versa

The interest cover ratio as at 2007was at the high end which was 75%nevertheless in the year 2008

Higher interest ratio returned in the


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Gearing

Year/ Ratio 2007 2008 2009 2010 2011

Financialleverage

3.16476 3.43513 3.47771 3.32887 3.39099

Interest Cover

Ratio

74.718 -24.8904 10.409 4.16 3.9646

NET Gearing

ratios

27.6303 27.2193 32.7147 33.6733 41.2128


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Efficiency Ratio

Efficiency ratios are used

to analyse how well acompany uses its assetsand liabilities internally

Qantas asset turn over

declined from 2009 to


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EFFICIENCY

Year/ Ratio 2007 2008 2009 2010 2011

Asset turnover

period(days) 282 292 265 252 261

PPE Turnover 1.23 1.28 1.20 1.10 1.09

Working Capital

Turnover -17.432 -7.9231 -19.455 -33.672 -25.074


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LIQUIDITY RATIO /SOLVENCY RATIO

Liquidity Ratio is the ability of anentity to earn profit, pay its debts

The better a company's solvency, thebetter it is financially.

The Current Ratios shows Qantas

Airways had a higher current ratiodurin the fiscal ear 2009 2010


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LIQUIDITY RATIO / SOLVENCYRATIO

Year/ Ratio 2007 2008 2009 2010 2011

Current Ratio 0.86624 0.73859 0.88859 0.93447 0.90473

Acid Test Ratio 0.83851 0.71023 0.85136 0.88335 0.84507

Cash Flow

Operation Ratio 0.36184 0.27991 0.16816 0.20942 0.27137


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Investment Ratio

A ratio that helps to determinewhether an investment in a particular

entity is likely to be profitable andsafe, from the ratio derived fromQantas

Dividend per share increaseddrastically at 2008 but later wentdown at 2009, dividend pay-out ratio

Dividend yield high in 2008 and


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INVESTMENT RATIO

2007 2008 2009 2010 2011Dividend per

share 6.69199 16.9651 2.50482 - -

Dividend payout

ratio 37.8898 89.5013 81.8182 - -Dividend yield

ratio 1.71 7.97 1.78 - -Earnings per

share 24.69091 30.15966 4.431599 5.069519 7.193472

Operating cash

flow per share 0.52902 0.543722 0.241704 0.279572 0.363324Price earnings

ratio 0.23 0.1 0.45 0.43 0.26


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Profit, Return onInvestment

The gross profit margin ratioindicates Qantas Airways financial

health; this shows investors howmuch gross profit every AUD ofrevenue the company is earning

Compared with company average,there was a slight fall at the year2008, then a sharp decline in the

gross profit at 2009 till 2011

ross pro marg n e


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ross pro marg n, eProfit, Return on

InvestmentYet, the company was still able to

declare profit.

Net Profit margin of the companyalso follows the same trend.

The Return on investment using our

ROE and ROA we could see that thereturns fell drastically at 2009 fromNet profit of 7.4 million of the

previous year to 1.4million against


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Liquidity

The Current Ratios shows QantasAirways had a higher current ratio

during the fiscal year 2009, 2010,and year 2011 respectively, rangingfrom 0.89, 0.93 and 0.90

Quick ratio also reflects thecompany's financial strength or

weakness, higher ratio shown in


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0

12

3

4

5

6

7

8

9

10

Liquidity


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Peer Analysis

Interesting to note that both thecompanies, Air NZ and Qantas, had

low turnout profits in 2008. AffectedAir NZ more than Qantas but Air NZrecovery was also much better thanQantass

Comparing ROE Ratios, both havedrastically decremented in the year2009 due to the Economic meltdown


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NET PROFIT MARGIN:

Year/

Company 2007 2008 2009 2010 2011

Air New

Zealand 4.981378 4.671095 0.45563 2.026693 1.86593

Qantas 5.18077 4.71147 0.98268 1.24165 1.7591


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NET PROFIT MARGIN:

Year/

Company 2007 2008 2009 2010 2011

Air

NewZealand 12.24% 13.82% 1.30% 5.24% 5.39%

Qantas 12.69% 12.95% 2.50% 2.88% 4.26%


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FUTURE EXPECTATION

Based on the analysis and ratios,Qantas revenue has increased from

2010.

Growth recorded in gross profit and

net profit in 2010 and 2011.

New 5 years strategy plan is basedon cuttin cost to reduce it ex enses

RECOMMENDATIONS AND


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RECOMMENDATIONS ANDCONCLUSION

With the future forecast, the newstrategic plans by Qantas and the

recent growth and improvementrecorded in the last 2 financial years.

The existing Shareholders areadvised to hold the share as moreprofit are expected in the comingfinancials years and the potentialshare holder are recommended to

venture into Qantas shares now that


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Thank youfor attention!

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Qantas Airways Limited Power Points

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