Airwork annual profit boosted by fixed wing business

Airwork Holdings lifted annual profit 0.7 percent, in line with its guidance, as a bigger fleet in its fixed wing division delivered better earnings offsetting a weaker result from its helicopter unit.

Net profit increased to $24.8 million, or 47.3 cents a share, in the 12 months ended June 30, from $24.6 million, or 47.4 cents, in the prior year, the Auckland-based company said in a statement. In February, the company, which is 75 percent-owned by China's Zhejiang Rifa Holding Group, said it was expecting annual profit of $25 million. Revenue rose 1.4 percent to $168.4 million.

The bottom line was bolstered by a $14.7 million insurance payment, which more than offset a $13 million impairment after a plane suffered major damage when it overshot a runway during a landing in Italy last year.

The increase in revenue and earnings was "due to significant expansion of the fixed wing division including the impact of contracts that commenced in the prior year," chief executive Chris Hart said. "The net gain on insurance associated with an Airwork owned aircraft incident in Europe in August 2016 (operated and maintained by a third party, and, as referred to in prior announcements) has been offset by some non-recurring costs associated with the introduction of additional freighter aircraft in NZ and Australia."

Airwork's board declared a final dividend of 9 cents a share, with a record date of Sept. 12 and a payment date of Sept 19. The total dividend for the year is 17 cents, unchanged from the prior year.

Revenue in the company's fixed wing division rose 16 percent to $93.2 million while earnings before interest and tax was up 54 percent to $31.3 million. Airwork noted fixed wing growth was offset by a reduction in the helicopter division where revenue declined 12 percent to $75.1 million and ebit fell 35 percent to $15.3 million due to continued challenging market conditions, in particular within the resources sector.

Looking ahead, Airwork said it will assess further fleet expansion opportunities in its fixed wing division and expects the current year's earnings to be similar to FY17, net of insurance proceeds less impairment.

Within the helicopter division, it said there is an "uncertain earnings outlook" as challenges faced by the resources sector continue to affect the helicopter industry.

The shares last traded at $4.50 and are up 3.7 percent so far this year.

(BusinessDesk)