crewsunite
24th Jan 2010, 02:40
Korean Air set for sixfold jump in earnings
Bloomberg in Seoul
Jan 23, 2010
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Korean Air Lines, South Korea's largest airline, expects to boost operating profit sixfold this year as the economic rebound revives demand for passenger and cargo flights. Operating profit may jump to 800 billion won (HK$5.42 billion) this year from 133.4 billion won last year, the Seoul-based carrier said. Sales may rise 13 per cent to 10.6 trillion won.
Korean Air aims to boost passenger traffic 4.1 per cent this year and cargo volume 11 per cent as a stronger won and easing job concerns spur travel and consumer spending. The airline, the world's largest international freight carrier, posted a third straight net income last quarter on Korean exports of mobile phones, computer chips and flat-screen television panels.
"The economic recovery has spurred pent-up demand for travel and cargo," said Ryu Je-hyun, an analyst at Mirae Asset Securities. "Earnings should continue to grow this year with demand returning to pre-recession levels." Ryu rates Korean Air a "hold".
The fourth-quarter net income of 122.3 billion won was in line with the 120 billion won median of 16 analyst estimates. The airline had a loss of 644 billion won a year earlier. Sales fell 4.9 per cent to 2.58 trillion won.
Operating profit, or sales minus the cost of goods sold and administrative expenses, rose almost sevenfold to 154 billion won from 22.6 billion won a year earlier.
Fuel expenses, the single biggest cost, decreased 22 per cent to 785.2 billion won, the carrier said.
The won gained 8.2 per cent against the dollar last year, cutting the repatriated value of the carrier's dollar-denominated fuel bill and US$5 billion of dollar-denominated debt. It also made overseas travel cheaper for South Koreans.
Korean Air fell 2.2 per cent to close at 58,600 won in Seoul trading, compared with the key Kospi index's 2.2 per cent drop. The stock has gained 6.7 per cent this year.
The airline plans to spend 2.13 trillion won this year, 28 per cent more than its 2009 estimate. Aircraft investment is to jump 53 per cent to 1.98 trillion won with seven new planes.
Korean Air's international passenger traffic rose 11 per cent last quarter and the carrier filled 71.7 per cent of available seats, 3.1 percentage points more than a year earlier.
Freight traffic jumped 15 per cent and the carrier packed 75.6 per cent of cargo space last quarter, compared with 69.7 per cent last year.
Bloomberg in Seoul
Jan 23, 2010
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Korean Air Lines, South Korea's largest airline, expects to boost operating profit sixfold this year as the economic rebound revives demand for passenger and cargo flights. Operating profit may jump to 800 billion won (HK$5.42 billion) this year from 133.4 billion won last year, the Seoul-based carrier said. Sales may rise 13 per cent to 10.6 trillion won.
Korean Air aims to boost passenger traffic 4.1 per cent this year and cargo volume 11 per cent as a stronger won and easing job concerns spur travel and consumer spending. The airline, the world's largest international freight carrier, posted a third straight net income last quarter on Korean exports of mobile phones, computer chips and flat-screen television panels.
"The economic recovery has spurred pent-up demand for travel and cargo," said Ryu Je-hyun, an analyst at Mirae Asset Securities. "Earnings should continue to grow this year with demand returning to pre-recession levels." Ryu rates Korean Air a "hold".
The fourth-quarter net income of 122.3 billion won was in line with the 120 billion won median of 16 analyst estimates. The airline had a loss of 644 billion won a year earlier. Sales fell 4.9 per cent to 2.58 trillion won.
Operating profit, or sales minus the cost of goods sold and administrative expenses, rose almost sevenfold to 154 billion won from 22.6 billion won a year earlier.
Fuel expenses, the single biggest cost, decreased 22 per cent to 785.2 billion won, the carrier said.
The won gained 8.2 per cent against the dollar last year, cutting the repatriated value of the carrier's dollar-denominated fuel bill and US$5 billion of dollar-denominated debt. It also made overseas travel cheaper for South Koreans.
Korean Air fell 2.2 per cent to close at 58,600 won in Seoul trading, compared with the key Kospi index's 2.2 per cent drop. The stock has gained 6.7 per cent this year.
The airline plans to spend 2.13 trillion won this year, 28 per cent more than its 2009 estimate. Aircraft investment is to jump 53 per cent to 1.98 trillion won with seven new planes.
Korean Air's international passenger traffic rose 11 per cent last quarter and the carrier filled 71.7 per cent of available seats, 3.1 percentage points more than a year earlier.
Freight traffic jumped 15 per cent and the carrier packed 75.6 per cent of cargo space last quarter, compared with 69.7 per cent last year.