Net income increased to 1.14 billion yuan ($187 million) from 1.04 billion yuan a year earlier, the carrier said in a Shanghai stock exchange filing today, citing international accounting standards. That exceeded the 1.02 billion-yuan average estimate of five analysts compiled by Bloomberg.
Currency gains also helped China Southern Airlines Co. prop up its first-half profit as a stronger yuan helps Chinese carriers pare the repatriated value of dollar-denominated debts. Air China and rivals are offering discounted fares as they contend with the nation’s economic slowdown and intensified competition from bullet trains.
Air China’s sales fell 3.6 percent from a year earlier to 45.9 billion yuan. It carried 37.5 million passengers in the period, 7.8 percent more than a year earlier, and filled 81.1 percent of seats.
The carrier had 1.12 billion yuan of foreign exchange gains, compared with a loss of 341 million yuan a year earlier, after yuan appreciated 1.5 percent against the U.S. dollar in the period. It also booked 44 million yuan of gains from its about 30 percent stake in Cathay after the Hong Kong carrier posted a first-half profit.
Shares of Air China rose 0.2 percent to close at HK$5.15 in Hong Kong trading before the earnings announcement. The stock has lost 21 percent this year, compared with a 3.45 percent drop in the benchmark Hang Seng Index. (HSI)
Air China’s passenger yields, a measure of average ticket price, fell 13 percent to 0.60 yuan, according to the statement. China Southern’s yield also declined.
China Southern, Asia’s biggest carrier by traffic, yesterday posted a first-half profit as gains from the yuan’s appreciation helped mask an operating loss. Still, the Guangzhou-based company’s profit missed estimates and was the worst in three years.
The yuan was the best performer in 24 emerging market currencies tracked by Bloomberg in the first half.
Source: Bloomberg News By Jasmine Wang | Photo: CNN
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