China Aviation Oil H1 profit sinks 57% to US$23.6m

JET fuel trader China Aviation Oil (CAO) on Thursday posted a 57 per cent fall in net profit to US$23.6 million for the half year ended June 30, from US$54.8 million a year ago.

This was mainly attributed to a decrease in gross profit from trading activities and lower contributions from its associates due to the Covid-19 pandemic, the mainboard-listed company said.

Total share of results from CAO's associated companies came in at US$3.9 million for H1 2020, compared to US$38.3 million for the year-ago period. In particular, contribution from the group's key associate, Shanghai Pudong International Airport Aviation Fuel Supply Company, plunged 93.8 per cent year on year to US$2.1 million, due to lower refuelling volume and oil prices, amid the novel coronavirus outbreak, CAO said.

Earnings per share stood at 2.74 US cents for H1 2020, down from 6.37 US cents for the preceding year.

Revenue for the first half tumbled 44.5 per cent to US$5.37 billion, from US$9.68 billion a year ago. This was primarily due to the decrease in oil prices and total supply and trading volume, the company said.

For H1 2020, total supply and trading volume dropped 24.4 per cent to 13.2 million tonnes, from 17.4 million tonnes for the corresponding period last year.

No interim dividend was declared for the half year ended June 30, 2020.

Wang Yanjun, chief executive officer and executive director of CAO, said: "The Covid-19 pandemic has brought about unprecedented impact on the aviation industry, with a corresponding drop in global demand for jet fuel, along with sharp falls in oil prices globally.

"Despite the increased global economic and demand uncertainties which has inevitably impacted the businesses of CAO and its associated companies significantly, CAO's businesses have remained stable for the first half of the year."

Shares in CAO were trading at 96 Singapore cents as at 1.59pm on Thursday, up 0.5 cent or 0.5 per cent.