China Aviation Oil Q1 profit down 27%

Singapore

BATTERED by lower oil prices and thinner trading volumes, China Aviation Oil (Singapore) Corporation's first quarter 2015 net profit fell 27 per cent to US$14.36 million, compared to US$19.67 million in the year- ago period.

For the three months ended March 31, 2015, revenues for Asia-Pacific's largest jet fuel trader nearly halved to US$2.08 billion, versus US$4.03 billion in the first quarter of 2014.

The company's total supply and trading volume for jet fuel and other oil products dropped 13.02 per cent to 4.01 million tonnes for the first quarter, compared to 4.61 million tonnes in the year-ago period.

Meanwhile, total expenses plunged 81.73 per cent to US$0.74 million in the first quarter, compared to US$4.05 million previously, mainly from the recovery of monies due from MF Global amounting to US$3.1 million and the reduction in finance cost relating to bank charges and interest expense, China Aviation Oil said.

The company made a bad debt provision of US$4.28 million in 2011 when MF Global went under bankruptcy proceedings.

The company acknowledged the continued volatility in the oil markets, as macroeconomic weakness restrains global oil demand growth and uncertainties continue to surround oil output projections.

"We expect the oil trading environment to remain challenging for (the) rest of the year amidst uncertainties in oil supply and demand, as well as geopolitical uncertainty," it said.

Notwithstanding these factors, it said it will continue to build on its global network focusing on jet fuel trading and aviation marketing, while seeking opportunities to invest in "strategic assets and synergistic businesses".

It added that it will continue to expand its diversification into trading activities in other oil products as well as pursue its long-term strategy to ensure the company's sustainable and stable development.

For the three months ended March 31, earnings per share was 1.67 cents while net asset value per share stood at 65.94 cents. No dividends were declared for the quarter.

Before the results were announced on Thursday, China Aviation Oil closed trading up 0.568 per cent at S$0.885.