REGIONAL Express (Rex) Chairman Lim Kim Hai yesterday warned of a “very challenging economic environment ahead,” with the company expecting its profits to slump as much as 30% over the next 12 months.
The weak Australian economy, soft Aussie dollar & ongoing trade war between the USA and China are all expected to moderate demand, not to mention the “devastating natural disasters affecting many regional areas”.
Passenger numbers are expected to be “sluggish”, and Lim noted that the carrier’s board had decided not to declare any interim dividends this financial year to preserve cash for several key development projects, as Rex continues to invest for the future.
The recent acquisition of a flight training school in Ballarat (TD 19 Nov) is complementing several key infrastructure developments, including establishing a Sydney Airport Simulator Centre as well as a new hangar at SYD over the next couple of years.
“These expansion plans, at a time when the global economy is looking morose, speaks volumes about the strong foundations we have at Rex and of our confidence in being able to weather the downturn and emerge stronger at the other end,” Lim said.
“Rex remains confident that its strong foundations, highly efficient operations and almost no leverage will carry it through the turbulent conditions until the conclusion of the presidential elections in the United States.”
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Source: traveldaily