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CX losses narrowing

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CX losses narrowing

Old 9th Sep 2022, 08:48
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Originally Posted by KABOY View Post
Seems like CX is heading to the markets now for more debt, $2.5B USD MTN as they know that loan on offer is going to hurt.

I wonder what the appetite for risk will be on a CX MTN, one thing is for sure it's another liability on the balance sheet.
Source?
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Old 9th Sep 2022, 13:57
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Bokkie, he's unlikely to reveal a source unless it is in the public domain. And it is, but not yet in the press, so go and goggle it yourself.

If it was not, do you think anyone would risk an insider trading rap?

At the source of the "government" loan problem is the 4-5 year snap back, which in most financial scenarios will be critically bad for CX. (Pprune passim). To replace it with new loans sounds a smart move just after HSBC has pumped your shares with a positive outlook.

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Old 15th Sep 2022, 08:59
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"...rumours of our loss have been greatly exaggerated" (with apologies for plagiarising and butchering the original quote)

CX as an airline, lost 1.5Billion in the first half - when you consider the prevailing restrictions and conditions, that is amazing. We made over $2billion second half last year - almost entirely on cargo.
I suspect we were 'profitable' at the operating level from around May. So using back of the envelope maths, I suspect we will make around $5billion or more in the second half at the airline operating level. Now, that will be dragged back down by losses on HKEX, and other 'associates' such that in the second half we might only be slightly profitable at the group level - and obviously a loss for the year overall, at the group level.

But bottom line - CX is a profitable airline again - we will miss out on 10s of billions of dollars in revenue over the next few years as we will be pilot limited in our operations. We might gross 60-70billion next year versus the 120-140 we should turnover given the much higher pax and cargo yields on offer.
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Old 15th Sep 2022, 11:56
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2 things:

1) 5 billion USD loan + interest to pay back
2) competition!

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Old 15th Sep 2022, 12:11
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What's that saying? "Never let the truth get in the way of a good rumour"?

We owe less money today (as of 30Jun22) than we did 3.5 years ago (31Dec18)
Total current and non current liabilities are around $118B vs $126B at the end of 2018.

Net assets are $68B vs $64B at the end of 2018.

So yeah - not sure what the extra $5billion USD loan is referring to? Was there some big loan made in last 2 or so months?


In terms of competition - yeah nah as we say in Australia. ALL airlines are charging like a wounded bull. Not just Cathay - have a look. So for the near term future, ALL airlines are going to be very profitable.

I may be wrong - we may even make a small profit at the group level this year - we will definitely make a decent profit at the Cathay Pacific operating level.
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Old 15th Sep 2022, 16:57
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Cathay. Charging like a wounded bull? Ok.

So if profitable at 25% capacity, why the need to permanently cut our pay?
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Old 15th Sep 2022, 18:14
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Originally Posted by Papa123 View Post
Cathay. Charging like a wounded bull? Ok.

So if profitable at 25% capacity, why the need to permanently cut our pay?
Rumour has it that the only way UO is going to sustain pilots right now is going back to the old contact or higher. This should put it on par with POS18 maybe even a little higher.

Supposedly 30% loss of crew already with another 20% minimum expected to not return under their reactivation plans.

Surprised to hear about it, would never have expected CX to allow a pay rise until full ops commenced.
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Old 16th Sep 2022, 03:33
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Originally Posted by Numero Crunchero View Post
"...rumours of our loss have been greatly exaggerated" (with apologies for plagiarising and butchering the original quote)
.
To put this into context, compare with the losses at other major carriers in 2021. It was essentially a breakeven year for CX.
Air Canada, American, JAL, Qantas, AF/KLM, LATAM, Lufthansa, TAP, TUI, and United all posted net losses well into the billions of USD.

Source: Aviation Week 2022 world airline report, page 10, "Airline Financials".
https://informamarkets.turtl.co/story/atw_august_2022/

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Old 17th Sep 2022, 19:41
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Originally Posted by Numero Crunchero View Post
What's that saying? "Never let the truth get in the way of a good rumour"?

We owe less money today (as of 30Jun22) than we did 3.5 years ago (31Dec18)
Total current and non current liabilities are around $118B vs $126B at the end of 2018.

Net assets are $68B vs $64B at the end of 2018.

So yeah - not sure what the extra $5billion USD loan is referring to? Was there some big loan made in last 2 or so months?


In terms of competition - yeah nah as we say in Australia. ALL airlines are charging like a wounded bull. Not just Cathay - have a look. So for the near term future, ALL airlines are going to be very profitable.

I may be wrong - we may even make a small profit at the group level this year - we will definitely make a decent profit at the Cathay Pacific operating level.
The US$5 billion loan / debt that everyone seem to like to quote is the HK$39 billion line of credit that the government had extended to CX... However, the not too intelligent / very ill informed people on this forum often don't look into the details... That US$5 billion / HK$39 billion dollar loan from.thr government was a line of credit, but CX has actually NOT drawn one cent from that line of credit even thought it was made available and then subsequent extended past the original availability deadline... What people don't seem to get is that, a line of credit NOT used is not debt... It is only debt if CX drawn and taken money out of it.
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Old 18th Sep 2022, 06:57
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Originally Posted by cxhk View Post
The US$5 billion loan / debt that everyone seem to like to quote is the HK$39 billion line of credit that the government had extended to CX... However, the not too intelligent / very ill informed people on this forum often don't look into the details... That US$5 billion / HK$39 billion dollar loan from.thr government was a line of credit, but CX has actually NOT drawn one cent from that line of credit even thought it was made available and then subsequent extended past the original availability deadline... What people don't seem to get is that, a line of credit NOT used is not debt... It is only debt if CX drawn and taken money out of it.
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Chinglish is NOT English
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Old 18th Sep 2022, 07:42
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Originally Posted by cxhk View Post
The US$5 billion loan / debt that everyone seem to like to quote is the HK$39 billion line of credit that the government had extended to CX... However, the not too intelligent / very ill informed people on this forum often don't look into the details... That US$5 billion / HK$39 billion dollar loan from.thr government was a line of credit, but CX has actually NOT drawn one cent from that line of credit even thought it was made available and then subsequent extended past the original availability deadline... What people don't seem to get is that, a line of credit NOT used is not debt... It is only debt if CX drawn and taken money out of it.
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You clearly have NO IDEA what you’re talking about!

The rescue package was not a ‘line of credit’, it was a bailout/lifeline to save the company from imminent collapse, and consisted of a cocktail of preferences shares, warrants and loans - compliments of you, me and Joe Public.

Read the entire article below:



https://www.washingtonpost.com/busin...434_story.html

“The sums owed are quietly accruing, though, and the interest rate will start ramping up in August 2023, from 3% currently to 9% by 2026. If Cathay keeps deferring preference dividends and adding them to its sum of debt, the annual interest bill alone on the prefs will top HK$2 billion by the middle of 2025 — roughly equivalent to its average net income in the last five pre-pandemic years. Those obligations will rank ahead of any dividends Cathay could hope to pay to its ordinary shareholders — and it’s also going to have to start paying down the principal, too.”

Like my learned mate NC said - “
Never let the truth get in the way of a good rumour"

Last edited by Cury Lamb; 18th Sep 2022 at 07:59.
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Old 19th Sep 2022, 02:24
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Originally Posted by KABOY View Post
I don't think you understand what I am talking about. Forecast profit and share price has very little to do with taking on more debt, which has wider implications. Stick to your FT, tell me when you hear about the MTN, these things tend to run a little deeper than a UK tabloid.
Imagine if they needed government approval to issue notes. The calamity!

Board approval? Pfft.
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