[Photo by Han Joo-hyung]
South Korea’s flag carrier Korean Air Lines Co. surprised with its operating and net income more than tripling against a year-ago period as a recovery in passenger flight added to still-strong cargo services, but whether it can keep up the strength is uncertain on signs of softening in cargo demand and restrained air travel from high inflation and fuel prices.
Korean Air Lines in its earnings release on Thursday reported an operating profit of 735.9 billion won ($566.2 million) on a separate basis in the April-June period, down 6.7 percent from a quarter but up 273.7 percent from a year earlier.
Net profit contracted 17.2 percent on quarter but expanded 246.6 percent on year to 450.4 billion won, while revenue added 18.8 percent from three months ago and 70.8 percent against a year ago to 3.33 trillion won in the period.
The figures beat the market consensus of 603.1 billion won in operating profit and 3.18 trillion won in sales compiled by Yonhap Infomax.
Korean Air Lines shares were trading 0.57 percent down at 26,250 won in the morning trade Friday after a more than 5 percent gain in the previous session.
The airliner successfully kept up profitability against spike in fuel prices thanks to a recovery in air travel demand with the Covid-19 now being considered endemic and brisk sales with freight business.
Revenue from its passenger flight business jumped 307 percent on year to 874.2 billion won in the second quarter, and sales from cargo flight business up 44 percent to 2.17 trillion won on solid demand for chips.
For the first six months, the airliner`s operating profit gained 374.3 percent on year to 1.52 trillion won with sales surging 65.9 percent to 6.14 trillion won. Net income stretched 882.4 percent to 994.3 billion won.
Korean Air Lines expected the recovery pace of passenger flight demand in the second half would slow down amid growing uncertainties from the resurge in Covid virus infections and spike in fuel costs.
Korean Air Lines is aiming to increase flights to 50 percent of the level before the virus outbreak by next month. It remained sanguine about cargo deliveries, while industry experts and investors have become doubtful amid talk of recession on the horizon.
By Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]