China Southern says full-year profits jump 30 pct, below expectations

Beijing Media

30/03/2017 10:13

SHANGHAI, March 30 (Reuters) - China Southern Airlines Co 
Ltd  600029.SS  1055.HK  on Thursday reported a 29.9 percent 
rise in 2016 net profit, below analysts' expectations, as a 
weaker yuan put a dent on strong domestic demand for overseas 
travel.  
    China's second-largest carrier by passenger numbers reported 
profits attributable to shareholders of 5.06 billion yuan  
($734.50 million), its strongest performance since 2011. 
Analysts polled by Reuters had forecast reported net income of 
5.47 billion yuan. 
    Revenue rose 2.95 percent year-on-year to 114.8 billion 
yuan, against a 4.75 percent rise in passenger traffic, it said. 
It suffered 3.27 billion yuan in foreign exchange losses due to 
the weakening yuan  CNY=CFXS .  
    Its yield per revenue passenger kilometre fell 5.66 percent, 
after the airline grew passenger capacity by 8.65 percent over 
the year. 
    Chinese airlines have been aggressively ordering new 
aircraft to take advantage of strong demand for outbound travel, 
which has outpaced domestic growth. However, the loans to 
purchase the aircraft are mainly denominated in U.S. dollars, 
causing them losses as the yuan depreciated against the dollar. 
    China is the world's fastest growing aviation market and is 
expected to displace the United States as the world's largest  
around 2024, according to the International Air Transport 
Association. 
    Shares in China Southern, which earlier this week announced 
that it will sell a 2.68 percent stake to American Airlines 
Group Inc  AAL.O , closed down 3.49 percent on Thursday, against 
a 0.37 percent fall in the Hang Seng index  .HSI .  urn:newsml:reuters.com:*:nL3N1H506U 
 
($1 = 6.8890 Chinese yuan renminbi) 
 
 (Reporting by Brenda Goh; Editing by Randy Fabi) 
 ((brenda.goh@thomsonreuters.com; +86)(0)(21 6104 1763; Reuters 
Messaging: brenda.goh.thomsonreuters.com@reuters.net)) 
 
Keywords: CHINA SOUTHERN AIR RESULTS/