CATHAY PACIFIC INTERIM RESULTS – 30 JUNE 2023
Cathay Pacific Achieves Record Passenger Revenue Growth, Subsidiaries Show Mixed Performance
Cathay Pacific, in the first half of 2023, experienced a remarkable increase in passenger revenue, while its subsidiaries demonstrated mixed financial performance.
| Consolidated Statement of Profit or Loss (HK$’M) (Cathay Pacific & its Subsidiaries) | 2023 (1H) | 2022(1H) | Change |
|---|---|---|---|
| Passenger services | 27,563 | 2,086 | 25,477 |
| Cargo services | 12,432 | 13,830 | -1,398 |
| Other services and recoveries | 3,598 | 2,635 | 963 |
| Total revenue | 43,593 | 18,551 | 25,042 |
| Staff | -6,612 | -5,057 | -1,555 |
| Inflight service and passenger expenses | -1,244 | -166 | -1,078 |
| Landing, parking, and route expense | -5,066 | -2,305 | -2,761 |
| Fuel, including hedging gains | -10,635 | -2,630 | -8,005 |
| Aircraft maintenance | -3,253 | -1,414 | -1,839 |
| Aircraft depreciation and rentals | -5,043 | -4,966 | -77 |
| Other depreciation, amortisation, and rentals | -1,305 | -1,221 | -84 |
| Others | -3,799 | -2,045 | -1,754 |
| Operating expenses | -36,957 | -19,804 | -17,153 |
| Operating profit/(loss) before non-recurring items | 6,636 | -1,253 | 7,889 |
| Gain on deemed partial disposal of an associate | 1,929 | 0 | 1,929 |
| Reversal of impairment | 208 | 0 | 208 |
| Operating profit/(loss) | 8,773 | -1,253 | 10,026 |
| Finance charges | -1,997 | -1,386 | -611 |
| Finance income | 551 | 17 | 534 |
| Net finance charges | -1,446 | -1,369 | -77 |
| Share of losses of associates | -2,620 | -2,726 | 106 |
| Profit/(loss) before taxation | 4,707 | -5,348 | 10,055 |
| Taxation | -439 | 349 | -788 |
| Profit/(loss) for the period | 4,268 | -4,999 | 9,267 |
Cathay Pacific’s passenger revenue soared by 1,109.5% to HK$25,013 million compared to the same period in 2022. The airline witnessed substantial growth in passenger flight capacity, with available seat kilometers (ASKs) increasing by 1,111.3%. Traffic, measured in revenue passenger kilometers (RPKs), also saw an impressive surge of 1,685.0%. The total number of passengers carried in the first half of 2023 reached 7.8 million, averaging 43,184 passengers per day, which represented a remarkable growth of 2,233.1% compared to the previous year. The load factor increased to 87.2% from 59.2% in the first half of 2022.
On the other hand, cargo revenue in the first half of 2023 declined by 11.6% to HK$10,741 million due to a weaker global market for air cargo. However, the available cargo tonne kilometers (AFTKs) increased by 117.6%, and cargo revenue tonne kilometers (RFTKs) showed growth of 83.0%. The total tonnage increased by 23.8% to 651 thousand tonnes. The load factor for cargo operations decreased to 63.8% compared to 75.8% in the first half of 2022, and the yield decreased by 51.7% to HK$2.76.
Cathay Pacific recognized a one-off non-cash gain of HK$1.9 billion in the first half of 2023 due to a dilution of their interest in Air China following the completion of their A-shares offering in January.
While the airline’s performance was strong, some subsidiaries and associates faced challenges. HK Express reported a profit of HK$333 million for the first half of 2023, benefiting from robust travel demand and a return to pre-pandemic flight frequencies. Air Hong Kong reported a profit of HK$402 million, maintaining consistent solid performance.
However, some subsidiaries experienced declining financial performance despite higher volumes due to high interest expenses. Losses from associates increased compared to the first half of 2022, mainly due to the impact of COVID-19 in the previous year, which was reflected in the first-half results reported three months in arrears.
Overall, Cathay Pacific’s impressive passenger revenue growth and the mixed performance of its subsidiaries highlight both the airline’s resilience and the challenges faced by the aviation industry amid the ongoing pandemic.
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