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China Southern back in black
HONG KONG, China (Reuters) -- China Southern Airlines Co Ltd, China's largest carrier, has climbed back into the black in the third quarter as traffic rose 11.6 percent. But it warned Thursday that full-year earnings could fall sharply from last year. A quick rebound in passenger traffic after the containment of SARS in late June helped the carrier to a net profit of 381.8 million yuan ($46.1 million) in the three months ended September 30, in accordance with Chinese accounting rules. But the company said it expected its annual profit to be at least 50 percent lower than the previous year, after the SARS outbreak devastated its business in the first half. A survey of 20 analysts by Reuters Research forecast a full-year loss of 711.06 million yuan. "Potentially, there could still be a full-year loss. But SARS is fully behind it," said Phil Wickham, analyst at ING Financial Markets, who forecast that the airline would make a full-year loss of 367 million yuan. This is the first quarterly report by the airline and no comparative figures were immediately available. In the first half, China Southern reported its biggest loss since listing of 1.23 billion yuan after SARS forced it to cut flights as travellers stayed at home. China Southern said it saw an 11.6 percent rise in passenger traffic in the third quarter but traffic was still down 12.6 percent for the first nine months of 2003 and the company made a loss of 782.9 million yuan during that period. Many analysts prefer China Southern to its main rival, Shanghai-based China Eastern Airlines Co Ltd, as it derives most of its revenue from domestic traffic, which is less exposed to competition from slicker foreign rivals. On Wednesday, China Eastern reported a third-quarter net profit of 228.34 million yuan but said it expected to make a full year net loss. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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