Tue, Aug 24, 2010 - Page 11 News List

Record Q2 profit at China Airlines

BLOOMBERG

China Airlines Ltd (中華航空), Taiwan’s largest carrier, posted a record quarterly profit as an economic recovery spurred demand for cargo shipments and travel.

Net income surged sixfold to NT$3.71 billion (US$116 million) in the second quarter which ended June 30, from NT$595 million a year earlier.

The profit, derived from half yearly earnings reported by the Taipei-based company yesterday, were in line with the NT$3.7 billion average of three analyst estimates compiled by Bloomberg over the past four weeks.

The results follow profit gains by competitors, including EVA Airways Corp (長榮航空), Korean Air Lines Co and China Southern Airlines Co (中國南方航空公司).

As demand in Europe and the US boosts shipments of notebook computers and mobile phones from Taiwan and China, Taiwan’s GDP will probably expand 8.24 percent this year, compared with a contraction of 1.91 percent last year, the Directorate-General of Budget, Accounting and Statistics said last week.

“The global economic recovery is boosting demand for cargo transportation,” Tina Chen, a Taipei-based analyst at SinoPac Securities Corp (永豐金證券), said before the earnings release. “People are more willing to travel as the economy is doing well.”

Shares in China Airlines were unchanged at NT$21.20 at the close of trading in Taipei. The TAIEX gained 0.6 percent. The company released its results after the market’s close.

Second-quarter sales climbed 72 percent from a year earlier to NT$35.5 billion, based on first-quarter and six-monthly earnings reports.

The expansion of services between Taiwan and China has also helped to boost earnings at Taiwan’s carriers, said Chen, who has a “buy” rating on China Airlines’ stock.

China and Taiwan more than doubled the total number of cross-strait flights to 270 a week from Aug. 31.

China Airlines’ half yearly profit totaled NT$6.27 billion or NT$1.35 a share, compared with a loss of NT$2.37 billion or NT$0.71, a year earlier.

EVA Airways, Taiwan’s second-biggest carrier, reported first-half net income of NT$5.22 billion on Aug. 16, turning around a loss of NT$1.68 billion a year earlier.

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