Air China joins China Eastern and China Southern in forecasting 50% decline in 1H2012 net profits
Air China stated (17-Jul-2012) it expects net profit in the six months ended 30-Jun-2012 (1H2012) to "decrease by more than 50%" year-on-year amid a weak global economy, higher jet fuel costs and reduced foreign exchange gains. The carrier reported a net profit of CNY4.06 billion (USD637 million) in 1H2011. Last week, China Eastern Airlines also issued (13-Jul-2012) a profit warning, estimating 1H2012 net profit to have declined by more than 50%. The carrier said the weaker results were due to weak passenger and cargo demand and higher jet fuel costs. The carrier forecast a net profit of CNY2451.73 million (USD383.89 million) in the six months to Jun-2012 and a basic earnings per share of CNY0.2174 (USD 3.40 cents). Prior to this, China Southern Airlines similarly forecast (10-Jul-2012) a 50% year-on-year decline in net profit due to factors including the slowdown in the domestic economic growth and the growth of demand for aviation industry, the “substantial” increase in jet fuel prices and the foreign exchange losses attributable to the depreciation of the Chinese yuan against the US dollar. In 1H2011, the carrier reported a net profit of CNY2755 million (USD421.8 million) and an earnings per share of CNY0.28 (USD 4.29 cents), according to China Accounting Standards for Business Enterprises. [more - original PR - Air China] [more - original PR - China Eastern Airlines] [more - original PR - China Southern Airlines]
Air China: "During the period from 1 January to 30 June 2012, the operating results of the Company decreased comparing to the corresponding period in 2011 due to various factors including, among others, the slowdown in the growth of demand in the PRC aviation industry, the continued depression of demand in the international aviation market and the year-on-year growth in the price of jet fuel. In addition, compared to the significant appreciation of Renminbi against US dollars in the corresponding period in 2011, the exchange rate of Renminbi remained relatively stable during 2012. As a result, the Company enjoyed significantly lower foreign exchange gain compared to that of the corresponding period in 2011," Company statement, 17-Jul-2012.