Rising fuel costs drag China Southern H1 profit down 22.8%
The company's revenue for the first half was ￥67.6 billion ($9.9 billion), an annual rise of 12%. Fuel was its highest cost as international oil price swings impacted its performance.
In the first half of 2018, the Group recorded operating revenue of RMB 67,520 million, representing an increase of 11.63% compared to the corresponding period last year.
Net profit attributable to equity shareholders of the Company was RMB 2,137 million, a decrease of 22.80% from the RMB 2,768 million in January-June last year.
Among which, the revenue from traffic was RMB 64,885 million, representing an increase of 12.22% compared to the corresponding period last year, mainly due to the increase in the traffic revenue from passengers; the revenue from other businesses was RMB 2,635 million, representing a decrease of 1.27% compared to the corresponding period last year.
The total passenger revenue was RMB 60,386 million, to which domestic routes, international routes and Hong Kong, Macao and Taiwan routes contributed RMB 45,220 million, RMB 13,991 million and RMB 1,175 million, respectively.
Total operating expenses in the first half of 2018 amounted to RMB 65,260 million, representing an increase of RMB 7,406 million or 12.80% from the same period of the previous year, primarily due to the increase in fuel cost, maintenance expenses and aircraft and transportation service expenses.
Fuel was its highest cost, RMB 19,381 million, as international oil price swings impacted its performance.
During the reporting period, the Company’s sales from frequent passengers and major accounts continued to grow. The number of CSA pearl members reached 36.06 million, representing an increase of 12.4% as compared with the same period of the previous year. The number of the members of Xiamen Airlines reached 10.516 million, representing a year-on-year growth of 16.6%. The revenue generated from major accounts achieved an increase of 24% as compared with the same period of the previous year. The electronic direct sales revenue was RMB 32,827 million.
“China Southern e-Travel” achieved remarkable results. It basically realized the concept of “a hassle-free journey with one mobile device to offer hit products such as online seat selection, online check-in, face recognition, meal booking, self-service refund and rescheduling, etc. The e-travel platform attracted over 160 million visits, and social media followers totaled over 27 million.
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