Air China, the country's largest carrier, yesterday said its
third-quarter net profit amounted to 2.1 billion yuan, down 42.55
percent from the same period of the previous year, when earnings
were inflated by a one-off extraordinary item.
In a statement to the Shanghai Stock Exchange, the company said
it posted net earnings of 3.48 billion yuan on sales of 37.21
billion yuan in the first nine months.
Earnings per share were 0.184 yuan in the third quarter compared
with 0.287 yuan in the first nine months. The third-quarter return
on net assets was 7 percent, down 2.73 percentage points from the
previous year. The return on net assets in the first nine months
was 11.16 percent.
Analysts said the lower earnings for the third quarter of 2007
were largely accounted for by the fact that the third quarter of
2006 was boosted by the 1.84 billion yuan gain from the sale of a
stake in Hong Kong Dragon Airlines.
Stripping out the gains from that share sale, the third-quarter
net profit would have risen 93 percent from the corresponding
period last year, the company said yesterday in a report to the
Hong Kong stock exchange.
Analysts said airline companies' profits are expected to shrink
in the fourth quarter as the tourism off-season approaches.
Li Lei, an analyst at CITIC China Securities, said the steady
increases of passenger-seat ratio, or load factor, and the
effective control of operating costs would remain the major
contributors to the profit margin of airline companies.
"Airline companies are expected to compete with each other by
increasing their profit margins by reducing the operating costs and
improving the load factor," said Li.
"Anticipation of renminbi appreciation and flight route
resources will give Air China more growth space."
In the three months running up to the end of September, Air
China's revenue rose 11 percent to 14.5 billion yuan, compared with
the first nine months' revenue increase of 15 percent from the year
before.
Operating costs in the third quarter rose 3 percent to 10.3
billion yuan from the previous year, while they climbed 10 percent
in the first nine months.
Air China's A shares yesterday rose 5.96 percent to 22.05 yuan
while its H shares fell 2.17 percent to HK$11.68.
(China Daily November 1, 2007)
