There are no clear skies ahead for Regional Express Holdings (REX) with the stock hovering at a more than two year low on a grim outlook at its annual general meeting today.
The regional carrier warned that it won’t catch a break as its financial performance will “significantly deteriorate” in the current year even though 2012-13 had been a tough year for the company with pre-tax profit plunging 45.3% to $19.2 million.
But the news didn’t prompt investors to bail with the stock managing to claw back early losses to trade flat at 93.5 cents as despair has given way to hope that things will not turn out that badly in 2013-14 if the carbon tax is repealed.
REX puts the blame squarely on the previous Labor federal government as demand for its services hit a brick wall since the introduction of the carbon tax; but while Prime Minister Tony Abbott looks determined to scrap the tax, it is unclear when that might happen.
The stock is not for the faint hearted, but the stock could re-rate in the months ahead as highlighted in last week’s article.
REX is part of the Uncapped 100 and the stock has shed 15.5% since the start of the calendar year.