China Airlines Ltd (CAL, 中華航空) yesterday gave a brighter outlook on its earnings for this year as the company swung back into profit last quarter.
The company reported a net income of NT$1.76 billion (US$58.1 million), improving markedly from a net loss of NT$3.76 billion during the January-to-March period.
Earnings per share were NT$0.32 during the period, compared to a net loss of NT$0.69 in the previous quarter, CAL said.
Despite the surge in earnings last quarter, the company in the first half of the year still saw net losses of NT$2 billion, or NT$0.37 per share, compared to earnings of NT$1.29 billion, or NT$0.24 per share, a year ago.
The profitability in the second quarter of the year was attributed to a recovering demand for passenger and cargo transport, as well as stabilizing fuel prices, CAL president Hsieh Shih-chien (謝世謙) said at the carrier’s first investors’ conference since its listing on the Taiwan Stock Exchange in 1993.
Rising demand has also led to a 6 percent quarterly rise in sales to NT$38.16 billion last quarter while maintaining a passenger load factor of 80.4 percent, the company said.
“We are confident that earnings performance this quarter will recover from a trough in the previous quarter,” Hsieh said.
Although asset impairment charges related to aircraft disposal and fleet upgrades had dragged on the carrier’s earnings in the first half, CAL booked 85 percent of all charges anticipated this year in the first six months, meaning that further charges would be limited to NT$500 million, including charges for disposing of 2 aging Boeing 744 aircraft, Hsieh said.
The carrier has already retired all of its older Airbus A340-300 airplanes and is set to take delivery of three new Airbus A350s in the second half, Hsieh said.
The company would have a fleet of 14 A350 aircraft before the end of next year, he added.
Meanwhile, Hsieh said that the company had begun to adjust the offerings of its subsidiary Tigerair Taiwan (台灣虎航) to include tour group sales and chartered flights, after the low cost carrier (LCC) unit returned to profitability earlier this year.
Tigerair Taiwan has been fully owned by China Airlines since the latter earlier this year took over all remaining shares.
“Tigerair Taiwan will no longer be purely a low-cost carrier, as the business model is not viable,” Hsieh said. “We are looking to add elements of a full-service carrier to Tigerair Taiwan and improve the unit’s collaborations with CAL.”
Shares in CAL yesterday gained 3.45 percent to close at NT$10.5 in Taipei trading. The stock has risen 12.9 percent so far this year, slightly beating the broader market’s 12.06 percent increase over the period, Taiwan Stock Exchange data showed.
Credit Suisse Group AG this week upgraded its evaluation of CAL’s stock performance to “outperform” from “underperform” and lifted its earnings estimates for the company from this year through 2019, citing the company’s recovering passenger yield, higher load factor and the operational turnaround of Tigerair Taiwan.
“We expect China Air to see a strong profit rebound into the second half of 2017 with high single-digit revenue growth backed by improving operating margin and on a few initiatives for profit enhancement, including profitability assessment extended to long-haul routes after the summer season, and more charter flights (better margin) for its LCC arm,” Credit Suisse said in a note on Tuesday.
Netherlands-based semiconductor equipment supplier ASML Holding NV yesterday said that it is planning to hire an additional 1,000 people in Taiwan this year in response to growing demand from clients. ASML had previously planned to recruit 600 people this year, but that the plan has been adjusted upward, ASML vice president and ASML Taiwan general manager Grace Wang (汪佳慧) told reporters. ASML has a workforce of more than 4,500 in Taiwan, accounting for about 10 percent of its global total, Wang said. This year’s recruitment campaign would focus on adding people in the customer support, manufacturing and supply chain domains to assist ASML
Starlux Airlines Co (星宇航空) today unveiled a long-haul network expansion plan at a shareholders’ meeting in Taipei, including direct flights to Barcelona, Spain, and Zurich, Switzerland, as well as a service connecting Taipei, Sydney and New Zealand. Starlux is to become the first Taiwanese carrier to offer non-stop services to the two European cities, while the inaugural oceanic route is expected to expand transit opportunities within the Australia-New Zealand market, Starlux said. Flight services to Chicago, Dallas, Washington and New York are under evaluation, the airline added. Prior to the shareholders’ meeting, the airline earlier this year announced that it would be
UNDER MICROSCOPE: Taiwan detained three people who allegedly conspired to buy servers in Taiwan and export them using fraudulent documentation, prosecutors said Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday urged Super Micro Computer Inc to tighten up on compliance after Taiwan detained three people this week for allegedly making fraudulent declarations about artificial intelligence (AI) servers made by its US partner. The development marked the nation’s first crackdown on semiconductor smuggling, which grew after the US slapped restrictions on exports of high-end chips such as Nvidia AI accelerators to China. Nvidia is “rigorous” in explaining regulations to all of its partners, Huang told reporters after arriving in Taipei. “Ultimately Super Micro has to run their own company,” he said in response to
Nvidia Corp yesterday announced that CEO Jensen Huang (黃仁勳) would attend an employee meeting in Taipei tomorrow to celebrate the launch of the company’s Taiwan headquarters project. Huang would attend a gathering at the site of Nvidia’s planned headquarters in Beitou Shilin Technology Park (北投士林科技園區), the company said in a statement. After arriving in Taiwan on Saturday last week, Huang told reporters that he plans to meet with Quanta Computer Inc (廣達) chairman Barry Lam (林百里) and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman C.C. Wei (魏哲家), and would attend the groundbreaking ceremony for Nvidia’s Taiwan headquarters tomorrow. Nvidia has not yet applied
RSS