CX Annual "Negative Profit"
 

Any pundits care to hazard a guess? All punts to be posted before 0500Z.

I'll start.

- HKD5.8 BN

-8.45 Bil HKD :eek:

A hundred billion billion dollars.

http://www.google.com.au/images?q=tb...12/dr-evil.jpg

HK7 Billion

Loiter1 - Very funny

Glad to see a sense of humour being maintained through this...:ok:

30,145,828.26 Thai Baht...

brilliant, loiter:D

So does the 2009 13th month Chrissy Bonus get included in this loss?

Oh before I forget....7.5 billion

http://www.hkexnews.hk/listedco/list...0090311085.pdf

-8.558 :(

Freehills
 

-8558M takeaway fuel hedging "paper" loss -7950M = -608M

-608M adjusted for CARGO FINE (60M us$) 465M = -143M

-143M adjusted for 3cents Dividend / Management Bonus = ?:=

Well, over the last year we have been barraged by the weekly doom and gloom reports. Now that they have dropped the big one we can expect the final assault. Brace yourself lads.:eek:

Yes, it is all about bad management !
Have they been sacked for gambling on the fuel hedging ?:rolleyes:

From Reuters in the FT
 

Cathay Pacific posts record $1bn loss
HONG KONG, March 11 – Cathay Pacific Airways, Hong Kong’s dominant airline, posted a record loss in the second-half of 2008, dented by heavy fuel hedging losses and weak passenger demand due to the global financial crisis.

Cathay, Asia’s fifth-largest airline by market value, reported a HK$7.9bn ($1.02bn) net loss in the July-December period, according to Reuters calculations based on previously reported figures. That compared with a net profit of HK$4.4bn in the same period a year earlier.

The results were worse than an average forecast of a HK$7.3bn shortfall from 11 analysts polled by Reuters.

For the full year, Cathay posted a record net loss of HK$8.6bn, its first shortfall in a decade. But revenues rose 14.9 per cent to HK$86.6bn. The carrier announced a loss per share of HK$2.12, down sharply from earnings per share of HK$1.78 a year ago.

Shares in Cathay rose 2.1 per cent to HK$7.15 in morning trade on Wednesday ahead of the results announcement. But the firm’s stock has plunged by 41.3 per cent in the second half of 2008, underperforming the 35 per cent loss on the benchmark Hang Seng Index in the same period.

85%-90% of the loss is due to the fuel hedging paper loss. Again: paper loss.

As it's only a paper loss you must be expecting oil to rise to the hedge strike price..... how many put options on oil have you got, and what colour is the sky on your planet?

If oil prices remains low, or go even lower, the fuel hedging losses will be even larger and become real losses. However, the actual savings resulting from the fuel price being lower will more than make up for that loss.

Quote from reported news:
Tough times may be ahead, but remember that this huge 2008 loss is due to the low cost of oil. Surely nobody believes that low oil prices hurt the business, although on paper it makes it look that way. Having taken the hedging losses for the next three years into account in 2008, I don't see how the company won't largely profit from the low current prices.

Fuel Hedging losses: (7,970)
Settlement of the United States Department of Justice cargo investigations (468)

Sum: 8438 mHK$
Declared loss: 8558 m$

Although I agree fuel prices have hurt badly (13 billion$ difference compared to 2007)

If
- fuel price stay where they are through 2009
- there's no hedging f**k up
- no more cargo fine

the airline might well post a nice profit next year.

Exactly: the market agrees.

CX shares are up 5.86% today, with most of the gains after the release of the results.

OK, OK - we admit it - engineering spent $800 million more on a/c maintenance in 2008 - it must have been those infra-red 1st class taps - Sorry! :O

Some Questions for HKpilot and Bobrun
 

Whilst this has been done to death; just to make the point again about Fuel Hedging losses. The way in which CX has handled the financial reporting of their Fuel Hedges is not of CX's choosing, but a dictate by various worldwide Financial Regulators. However, consider this possibility.

Lets say CX has hedged about 10% of 2009 Fuel needs at an average of $US120/ barrel. Lets also say that CX has forward sold about 10% of all their 2009 freight capacity and pax seats assuming that it will cost $US120/ barrel, and based upon that price they make a profit. Having partially secured a cashflow, they are in a position to approach a bank to get a line of credit to buy some of Mr Boeing's finest for delivery through 2009-10. Now some questions;

Hongkong pilot. Is that gambling? Is that bad management?

Fly123456. Is this a f**k up?

Bobrun. Just dealing with the 10% hedged fuel...Does it really matter what the price of fuel does when you have fixed the buy price and effectively the sell price.

It been said many times, but some on this thread seem to be missing the point. A low fuel price is good news for CX (however, the reasons for the low oil price might be bad); a high fuel price that enables them to cash in their hedged postions will not be a cause to crack the champers on the 9th floor....