IAG unveils €500m share buyback as annual profits take off
By Oliver Haill
Date: Friday 24 Feb 2017
(ShareCast News) - British Airways and Iberia owner International Consolidated Airlines Group announced a new share buyback as it reported an improved profits in the fourth quarter of last year and guidance for continued improvement in 2017.
Even though IAG's various airline brands carried more than 100m passengers, up 12m from 2015, full year passenger revenues fell 2% to €19.9bn and total revenues slipped 1.3% to €22.57bn, though this was bang in line with analysts consensus forecasts.
In the fourth quarter passenger unit revenue fell down 12.7%, down 4.3% at constant currency, meaning for the full year passenger unit revenue was down 5.4% at constant currencies.
Fourth quarter operating profits jumped 17% to €620m, which lifted 2016 operating profit before exceptional items to €2.54bn, a rise of 8.6% on the previous year.
Full year profit before tax of €2.36bn was up 33%, with diluted earnings per share up 25.7% to 88.5 euro cents.
IAG's cash stood at €6.4bn at the end of December, up €572m over the 12 months, and a final dividend of 12.5 cents means the full year dividend of 23.5 cents per share will be a 17.5% increase on 2015.
For 2017, based on current fuel prices and exchange rates, management expects operating profit for 2017 "to show an improvement year-on-year".
Chief executive Willie Walsh said for the full year it was "a good performance in a challenging environment".
"Our performance was affected by an adverse currency impact of €460 million. In particular, this was due to the weak pound following the UK's EU referendum. However, despite that, we've made good progress and continue to build on all we've achieved in our first five years.
On Friday Walsh also announced a share buyback of €500m during the course of 2017 which he said may be implemented through one or more share buyback programmes.
"We have great confidence in IAG's future prospects and are increasing cash returns to our shareholders."
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