Business | Companies warn of hit to earnings

Companies are flagging hits to the bottom line as a result of the carbon tax, with many planning to pass on the cost to consumers through price rises.

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Qantas Airways
says the government's carbon pricing scheme will have a likely cost impact of $110 million to $115 million and it will pass on the full impact to customers. It expects price on a single domestic flight sector to rise by about $3.50 in fiscal 2013.

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Virgin
Australia said it was likely to face a cost impact of $45 million in fiscal 2013 from the carbon tax and will pass on the fare increase of about $3 a ticket to customers.

■ Brick maker
Brickworks
intends to pass on the cost of the government’s carbon tax with price rises of up to 6 per cent. The company says the $23 carbon tax will hit earnings by $9 million in the first year of operation, before it undertakes any further action to reduce emissions. Brickworks said the carbon tax would mainly hit its Austral brick division.

■ Cement and lime producer
Adelaide Brighton
on Monday estimated its net profit would receive a $5 million hit before mitigation measures in the first full year of the Labor government’s carbon scheme. “In light of the impost of the proposed carbon tax and the high strong Australian dollar, Adelaide Brighton will continue to evaluate its domestic footprint compared to the potential enhancement of import flexibility," it said in a statement to the stock exchange.

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Regional Express
says the proposed price on carbon, on top of an “avalanche" of adverse government measures, will “decimate" air services to the bush. Rex chief operating officer Chris Hine said pricing carbon, removing some rebates for regional airlines, an increased fuel excise and additional security measures would cost the airline about $6 million per year. “I foresee many regional operators without the financial strength and diversification of the Rex Group being forced out of business once these take effect after 1 July 2012," Mr Hine said in a statement.