EVA Airways Corp (長榮航空), Taiwan’s second-largest airline, posted a narrower loss in the second quarter as gains from fuel-hedging contracts offset slumping travel demand.
The net loss for the April to June period was NT$1.88 billion (US$57 million), compared with NT$3.68 billion a year earlier. The figures were derived from first-half results announced by the Taoyuan-based company yesterday. The loss was wider than the median estimate for a NT$575 million loss in a survey of six analysts.
EVA Airways posted NT$723 million of unrealized fuel-hedging gains in the first half, joining China Eastern Airlines Corp (中國東方航空) and Cathay Pacific Airways Ltd (國泰航空) in benefiting from rebounding oil prices. The paper profits helped mask the impact of a 12 percent plunge in Asia-Pacific international air travel caused by the global recession and concerns about swine flu.
‘BURDEN’
“The H1N1 virus is a burden,” said Peter Tzeng (曾耀德), a Taipei-based Polaris Securities Co (寶來證券) analyst. “Still, the global economy seems a bit better.”
He rates EVA “equal weight.”
EVA’s second-quarter sales fell 29 percent from a year earlier to NT$15.9 billion, following a 30 percent decline in the preceding three months, based on monthly exchange filings.
EVA fell 0.1 percent to close at NT$7.79 in Taipei trading before the earnings announcement. The carrier has climbed 3.9 percent this year, beating bigger rival China Airlines Ltd’s (中華航空) 1.7 percent gain.
EVA posted a loss of NT$1.68 billion in the first half of the year, or NT$0.43 a share, compared with a loss of NT$5.97 billion a year earlier, or NT$1.53, the company said in stock exchange filing yesterday.
Shanghai-based China Eastern Airlines, China’s third-biggest carrier, made a 2.79 billion yuan (US$408 million) paper hedging profit in the first half, up from 451 million yuan in the same period last year, it said this month.
OIL
Oil has risen 63 percent this year after dropping about 70 percent from a record last year. It traded at US$72.84 as of 3pm Singapore time.
The world economy will expand 2.5 percent in 2010 after contracting 1.4 percent this year, the IMF predicted last month.
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