Cathay Pacific Swings To Profit In 2009

Titlu: Cathay Pacific Swings To Profit In 2009
Sursa: http://news.airwise.com/story/view/1268217001.html
Autor: Reuters
Data: 10/03/2010

Citat :

Hong Kong's dominant carrier, Cathay Pacific Airways, reported its best half-year earnings in two years, beating forecasts and indicating improving market conditions for Asian airlines.

Cathay, Asia's No.5 airline by market value, returned to profit in the six months ended December 2009, helped by better air cargo and passenger traffic, oil hedging gains, and the sale of part of its stake in Hong Kong Aircraft Engineering.

The results sent its stock up 5 percent to an 18 month high on Wednesday.

"The earnings are better than the market expected and should boost its stock," said Kelvin Lau, an analyst at Daiwa Capital Markets, who added that a smaller-than-expected decline in cargo yields and cost cutting helped boost profits.

The strong result comes amid improving sentiment for Asian airlines overall. Shares of the big Chinese carriers, including China Southern Airlines, have rallied on improving capital positions. Smaller airlines such as Garuda Indonesia and the Philippine's Cebu Pacific are seeking to list shares.

But Cathay said it was cautious about prospects for 2010.

"Revenues and yields remain below levels experienced prior to the recent downturn and there has not been a sustained improvement in premium passenger demand," Cathay Chairman Christopher Pratt said in a statement.

"In addition, the cost of fuel, which rose steadily from the middle of 2009, remains stubbornly high and threatens to undermine profitability."

The global financial crisis triggered a deep downturn in Cathay's key markets last year, hurting its revenues.

The full year earnings were lifted by a profit of HKD$2 billion from fuel hedging while revenue fell 22.6 percent to HKD$67 billion.

Passenger volume for Cathay rose 0.4 percent in January and cargo surged 31 percent from a year earlier. Premium passenger numbers continued to recover, although still with a long way to return to yield levels seen before the economic downturn.

PROFIT TURNAROUND

The result represents a sharp improvement in Cathay's fortunes. The carrier earned HKD$3.88 billion (USD$502.6 million) for the six months ended December, based on Reuters' calculations using Cathay's annual results.

Cathay recorded a loss of HKD$7.9 billion for the second half of 2008 when unprecedented oil price volatility inflicted heavy hedging losses and the global financial crisis hit demand.

For the whole of 2009, Cathay posted a net profit of HKD$4.69 billion, compared with a net loss of HKD$8.7 billion in 2008.

Regional rival Singapore Airlines, the world's No.2 airline by market value, last month reported a lower-than-expected 19.7 percent rise in quarterly profit for October-December and said it was on course to avert a full-year loss because of a recovery in passenger and cargo demand.

Cathay shares rose 5 percent to a high of HKD$15.24 before settling at HKD$15.04, up 3.6 percent. They outperformed the broader market which was flat.

The company's stock price advanced 36 percent in the second half of 2009 as the global economy became more stable and air traffic demand started to recover, outperforming the Hang Seng Index's percent rise in the same period.