CAL says first half profit fell on low cargo demand

China Airlines Co (華航) said profit in the first half fell 21 percent after Taiwan's largest airline was forced to cut its cargo charges by a third as demand fell along with slowing economies.

Net income in the six months to June fell to NT$1.1 billion ($32 million), or NT$0.45 a share, from NT$1.39 billion, or NT$0.68 a shares, in the year-earlier half, according to a statement released by the Taiwan Stock Exchange.

"Cargo demand was hurt by Taiwan's slowing economy and exports," company spokesman Paul Wang (王振畬) said. "China Airlines was lucky to be able to maintain healthy revenue on the passenger business."

Taiwan's economy shrank 2.4 percent in the second quarter from a year ago as exports fell.

Overseas orders for Taiwan-made electronics and other goods fell 17 percent in July from a year earlier after dropping 20 percent in June, according to the Ministry of Economic Affairs.

Sales in the first six months rose to NT$34.1 billion from NT$32.6 billion the same period a year earlier on strong passenger travel for its Taiwan-Hong Kong and Taiwan-Japan routes, said Wang. Passengers accounted about 70 percent of China Airlines' sales in the first half, he said.

China Airlines shares have lost 6.8 percent this year, compared with TAIEX Index's 5 percent drop. The stock rose 5.2 percent, or NT$0.90, to NT$18 yesterday.