Cathay Pacific H1 net profit down, but results are encouraging
10 Aug 2011
Hong Kong: Though posting a 59 per cent fall in first-half net profit on soaring fuel costs. Cathay Pacific Airways Ltd, premier Asian airline, reported better results than regional rivals like Singapore Airlines. It also placed an order for 12 Boeing aircraft with a list price of $3.28 billion.
Cathay reported a net profit of HK$2.81 billion ($359.9 million) for the six months ended June, down from a record of HK$6.84 billion last year, which was exceptional because of sale of investments.
Cathay admitted that 2011 was proving to be a more challenging year than 2011.
"High fuel prices are increasing costs and recovering them through higher tariffs may affect demand," chairman Christopher Pratt said in a statement.
Fuel costs rose 49.5 per cent in the first six months against the same period last year and significantly impacted profitability for the reporting period, the airline said.
Though Cathay shares have lost about a quarter of their value this year on rising oil prices and recent market volatility, triggered by Standard & Poor's credit rating downgrade of the United States, analysts said the better-than-expected results could provide support to the stock.
