Mon, Nov 18, 2019 - Page 16 News List

EVA Q3 profit halves on slow cargo, labor strikes

By Kao Shih-ching  /  Staff reporter

EVA Airways Corp (長榮航空) saw its third-quarter net profit halve to NT$1.27 billion (US$41.6 million) from NT$2.59 billion a year earlier due to sluggish cargo business and the lingering effects of labor strikes.

Revenue fell 3.9 percent annually to NT$45.52 billion, which the airline blamed on weak air cargo demand amid US-China trade tensions and protests in Hong Kong.

The carrier announced the figures during an investors’ conference in Taipei on Thursday.

Passenger revenue fell from a year earlier, as it had not fully resumed normal flight schedules until July 20, after flight attendants launched strikes in late June, EVA said.

As a result, its available freighter tonne-kilometer (AFTK) and available seat kilometers (ASK), two indicators gauging its carrying capacity for goods and passengers, posted annual declines of 1.9 percent and 2.7 percent respectively for the first nine months of this year, EVA said.

EVA, the airline arm of Evergreen Group (長榮集團), posted cumulative net profit of NT$3.21 billion for the first three quarters, down 46.2 percent from NT$5.98 billion a year earlier. Earnings per share plunged from NT$1.33 to NT$0.67 over the period.

The carrier expects cargo business momentum this quarter to outperform the first three quarters, as demand is expected to increase ahead of the Christmas holiday season, EVA president Clay Sun (孫嘉明) said, adding that passenger business would grow mildly.

However, it would not be as good as last year, he said.

Still, Sun provided an upbeat outlook for next year, when five new Boeing 787-10 jets are to join the airline’s fleet.

The new airplanes would help improve the carrier’s AFTK and ASK by 8 percent and 13 percent respectively next year, he said.

Meanwhile, Evergreen Marine Corp (長榮海運), the shipping arm of Evergreen Group, returned to profit last quarter with net profit of NT$135 million, which still represented an annual decline of 80 percent from a net profit of NT$708 million a year earlier, corporate data showed.

The shipper posted annual revenue growth of 11 percent to NT$49.85 billion during the July-to-September period from NT$44.91 billion, attributable to rising freight volume.

Operational costs rose 10.45 percent year-on-year to NT$45.97 billion, from NT$41.62 billion, data showed.

Lower container spot rates on major routes reduced profits, the shipper said.

Evergreen Marine’s financial performance has been volatile this year, with double-digit percentage growth in net profit in the first quarter followed by a net loss in the second quarter, due to uncertainty in the global trade environment, it said.

However, overall, the company’s performance has improved from last year, with cumulative net profit of NT$340.39 million in the first three quarters, compared with a net loss of NT$398.75 million over the same period last year, the data showed.

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