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UPDATE 1-Cathay Pacific 2015 net profit jumps 90.5 pct on low oil prices, strong demand
March 9, 2016 / 5:42 AM / 2 years ago

UPDATE 1-Cathay Pacific 2015 net profit jumps 90.5 pct on low oil prices, strong demand

* 2015 profit HK$6 bln vs $5.7 bln estimate and HK$3.2 bln in 2014

* Attributes strong results to lower fuel prices

* Bigger contribution from partners also helps

* Confident on longer-term growth (Adds Cathay comments, share price)

BEIJING, March 9 - Cathay Pacific Airways reported on Wednesday a more than 90 percent surge in net profit for 2015, beating estimates, as record low crude oil prices and a higher contribution from its affiliate Air China boosted income.

Cathay said annual net profit was HK$6 billion ($772.57 million), slightly higher than the HK$5.7 billion estimate of 16 analysts polled by Thomson Reuters SmartEstimate.

In its earnings statement, Cathay said contributions from its partners had improved, without giving details. The plunge in crude oil prices also helped reduce fuel costs by 37.8 percent from a year ago, it added.

Air China, in which Cathay owns about a third, said in January it expects its annual net profit to rise by up to 80 percent as demand for air travel from China soars.

“The operating environment was better in 2015 than in 2014, but we faced some significant challenges which we expect to continue in 2016,” said Chairman John Slosar.

The airline said cargo revenue fell 9 percent to HK$23 billion, and forecast demand to remain low in 2016 due to industry overcapacity.

Cathay’s share price rose 3.14 percent to HK$13.8 on Wednesday after the earnings announcement, outperforming a 0.43 percent slip of the benchmark Hang Seng Index. ($1 = 7.7577 Hong Kong dollars) (Reporting by Fang Yan and Matthew Miller in BEIJING; Editing by Stephen Coates and Miral Fahmy)

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