Cathay Pacific's full-year profit for 2018 to beat expectations, shares jump 7.8%
Support was seen from the group's passenger business while its cargo business saw 'strong' growth, Cathay said.
Hong Kong airline company Cathay Pacific Airways on Wednesday said annual profit for 2018 is predicted to come in at HK$2.3 billion, more than double the figure analysts are expecting. The bullish statement drove its share price to surge by more than 7.5%.
Analysts polled by Refinitiv had expected the airline to report a profit of HK$1.1 billion for 2018. The increase in profit is a contrast to the HK$1.3 billion loss to shareholders in the previous financial year.
By the end of the trading day on Wednesday, Hong Kong-listed Cathay Pacific’s share price soared 7.8%, or HK$0.94, to HK$13.04.
The profit gain marks a turnaround for a firm plagued by years of losses, as it embarks on a turnaround strategy by cutting costs in an attempt to increase revenue.
Cargo business sees 'strong' growth
The airline said in a statement that capacity growth, a focus on customer service, and improved revenue management helped its passenger business. This is as average airfare prices rise amid the competitive pricing landscape.
Cathay also said higher rates and an increase in volumes supported a ‘strong’ growth for its cargo business. About 25% of the group’s revenue comes from its cargo business.
The airline continued to add that the group’s transformation programme, which was launched to cut costs and boost revenue has had a ‘positive impact’.
Last year, the carrier said the trade tensions between the United States and China have not affected its business but it continues to keep a close eye on the trade developments.
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