Q is becoming a serial offender in not complying.
Is this a sign of Q's desperation?
Possibly the last straw now gone for getting anything but an 'In administration' bailout from the Fed Govt that sees all shareholders lose 100% & unsecured creditors (especially those who just parted with $500m for 10 years) getting to claim tax losses.
Interesting data point (from Q's results). The Board only cancelled their overdue dividend payment just before 30 June 2020.
If the 13.5 cent dividend was paid then Q's net tangible assets (pre June 26 share issue) would have fallen to less than a weeks 'operating expenses' after receiving JobKeeper, at most a little over 3 cents per share if no value attributed to the 5.79 cents per share franking credit (17 cents - 13.5 cents).
Not paying the dividend saw Q left with around 5 weeks operating expenses worth of 'Net Tangible Assets' - AFTER raising the $1.4bn in new cash via their Institutional share issue on June 26th. That would only have taken them to August 5th or so.
Hard to reconcile these Q Annual Report figures (as at 30 June 2020) with AJ's claim of billions in security available for further borrowing? The Net tangible assets as at 30 June included the $1.360bn (gross) raised from the Insitutional issue on 26 June, after fees of $18m Q raised a net $1,342m.
Cash is classified as a tangible asset.
Net tangible assets per share of 17 cents is around $260m - I may be missing something here but $1,100m of the cash just poured in by the Institutional shareholders was required to OFFSET existing debt/liabilities.
The Statutory Loss of $1,964m equates to 129.6 cents per share loss, (see Q's report)
$1,964,000,000 / 129.6 = shares on issue used in calc = 1,515,432,000.
Cash raised of $1,342,000,000 / 1,515,432,000 shares = 88.6 cents per share.
Yet after getting in 88.6 cents per share in cash they only have 17 cents per share NTA remaining just 4 days later.
But AJ said the write down had no cash impact. Then what did?
Some creative accounting saw what I expected their 'underlying operating loss' of $400m+ become an $124m underlying operating profit. In the first half they booked the profits on fuel hedging as operating profits & in the second half they reclassified the $500m+ fuel hedging losses as non-operating expenses.
"Heads I win, tails you lose?"
Strange as for the first three months of 2020 Q used nearly 100% of projected fuel demand & for the last 3 months still used fuel - so over the entire half then at least 64% of the fuel hedges should have been booked as 'operating expenses'.
Even that basis would have resulted in a $220m operating loss. As the hedges had been in place since early 2019 (Q 2018/19 Annual Report) - does this seem to be an example of extreme cherry picking?
I do not recall this seeing this 'creative' methodlology before.
Figures also seem to show Q dragging the chain since the ACCC order for full cash refunds to be offered to ALL customers who were denied them & forced to take travel credits - by at least $1.7bn. Seems to tie in with the continuing anecdotal evidence here on AFF about pre- & post June 30. Then there is today's article from Newscorp.
Qantas passengers are growing increasingly frustrated as they wait more than five months for refunds on bookings worth thousands of dollars after travel plans were scuttled due to COVID-19.
www.news.com.au
Perhaps this cash situation explains their recent $500 unsecured 10 year bond issue. Yet again, somewhat inconsistent with AJ's claims about billions in security available to secure future borrowing - if so, then why pay a higher interest rate for unsecured debt?
Does make me wonder what the difference is in AJ & the Board's mind between loan 'covenants' vs 'conditions'?
