Full year results push the shares up in early trading with the announcement of a special dividend.
Shares soar for International Consolidated Airlines (IAG)
- Strong operating profit growth despite higher fuel prices helps push shares up 2.3% in early morning trading.
- Special dividend announcement alongside increased final dividend is welcome news for investors.
- We maintain our ‘buy’ recommendation albeit with higher risk due to uncertainty looming.
The positive full year results from International Consolidated Airlines have pushed the shares up nearly 2.3% in early morning trading. Investors will welcome the announcement of a special dividend of €35 cents on top of an increase in the final dividend to €16.5 cents. In addition there was also a better than expected fourth quarter performance with revenue of €6.1 billion and passenger unit revenue up 1.6%.
Profit increases despite hurdles
The owner of British Airways increased profit for the year despite facing hurdles of higher fuel prices, adverse FX moves and ongoing delays from air traffic operators. The CEO, also commented on how pleased he was with the company performance, as operating profit rose by 9.5% to €3,230 million and projections for the year ahead is for profits to be broadly the same.
With the deadline for the UK leaving the EU moving ever closer, there was little in the way of new detail regarding possible Brexit consequences. As the market is aware, the company will face increasing turbulence from rising fuel prices and uncertainty around whether the company will need to conform to the EU's rules on ownership post-Brexit.
Our View on International Consolidated Airlines - Buy
We therefore maintain our ‘buy’ recommendation for investors willing to accept a higher level of risk.
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