Cathay Pacific gains almost 4% on positive first half, Qantas and Singapore Airlines higher
Cathay Pacific’s shares surged 3.9% yesterday as the carrier revealed a profit of HKD6,840 million for the six months ended 30-Jun-2010, compared to a profit of HKD812 million in the previous corresponding period. Revenue surged 33.7% to HKD41,337 million and sales are “returning to almost pre-financial crisis levels.”
The result was well ahead of analysts’ expectations and while the airline “remains confident in the long-term future of the Cathay Pacific Group and Hong Kong, we are in a challenging and unpredictable industry and we have to be mindful of the many things – economic fluctuations, rising fuel prices, even volcanic eruptions – that can quickly have an impact on our business."
Cathay Chairman, Christopher Pratt said: “If present trends continue, we expect our financial results to continue to be strong in the second half of 2010. That said, conditions can change rapidly in the airline industry. Our results would be adversely affected, and very quickly so, by a significant further increase in fuel prices or any return to the recessionary economic conditions of 2008 and much of 2009.”
RBS Equities stated it expects analysts to upgrade their forecasts on Cathay in coming days. But it added as Cathay begins to increase capacity, “we expect fuel and staff costs to slowly begin to inch up”, concluding, “we think that profitability is unlikely to get significantly better going forward.”
Asia Pacific selected airlines daily share price movements (% change): 04-Aug-2010