TOKYO (XFNews) - All Nippon Airways Co Ltd (ANA), Japan's second-biggest airline, said its first half to September net profit tumbled 34 pct from a year earlier to 19.72 bln yen, hit by a writedown for impaired assets.
ANA said it spent some 17.6 bln yen during the six-month period to write down impaired assets, such as condominiums, as it sought to restructure its balance sheet.
But half-year operating profit jumped 16.4 pct to 69.59 bln yen, thanks to robust demand for domestic travel, which lifted revenue by 4.8 pct to 690.92 bln yen. Both revenue and operating profit were record high.
"Domestic travel demand was strong in particular... thanks to the Aichi Expo and recovery in business demand due to a turnaround in corporate profit," ANA director Tomohiro Hidema told a news conference.
The Aichi Expo held in central Japan drew 22.05 mln visitors between March 25 and Sept 25.
The number of domestic passengers during the first half rose 3.2 pct from a year ago to 23.27 mln, but the number of international passengers ANA carried fell 1.2 pct to 2.0 mln, as anti-Japan demonstrations in China led to cancellations of trips to that country.
"Demand on China-route, especially for sightseeing purposes, continues to be weak due to the lingering impact of anti-Japan moves there," Hidema said.
"Given that, we now have to brace for a 2 pct decline in international passengers for the full year."
ANA had earlier forecast a 2.7 pct rise in the number of international passengers for the current year ending March 2006.
"In addition, we are most likely to see some 30 bln yen increase in fuel cost for the full year," Hidema said.
As a result, the carrier stood by its full-year projections, predicting next profit of 10 bln yen, current profit of 44.5 bln yen and revenue of 1.326 trln yen.
Want more analysis like this? CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find out more and take a free trial.