Thai Airways returns to Q1 net profit, shares climb

[BANGKOK] Thai Airways International said on Tuesday it returned to net profit in the first quarter, sending its shares sharply higher, as a bumper foreign exchange gain and increased tourism traffic wiped out the impact of rising restructuring costs.

Posting a foreign exchange gain of 9.65 billion baht (US$286 million), the flag carrier reported a net profit of 4.54 billion baht for the January-March quarter.

That compared with a net loss of 2.6 billion baht in the same quarter a year earlier, and a 6.4 billion baht net loss in the October-December quarter. Five analysts had estimated the airline's net profit would be in a range between 3.5 billion baht and 12.4 billion baht.

Shares in Thai Airways, 51 per cent owned by the finance ministry, climbed nearly 6 per cent after the earnings disclosure to 12.70 baht, their highest since April 30. The stock has fallen 16 per cent over the past three months, underperforming a 6 per cent decline in the broader Thai index.

The recovery in tourism helped Thai Airways' passenger numbers grow 17 per cent from the same quarter a year earlier, the carrier said in a statement. Its cabin load factor, the percentage of available seats sold, stood at 75.4 per cent in the quarter versus last year's average 70.1 per cent.

The carrier is one of the major Thai state-controlled companies undergoing reform since the military seized power in May last year. Its two-year restructuring plan involves reducing operating costs and capacity by 20 per cent, selling aircraft and cutting jobs.

The airline sold two retired planes and decommissioned 11 aircraft, while it took delivery of two new ones in the first quarter. That meant its fleet shrank to 93 aircraft at the end of March from 102 at the end of 2014.

The company booked an impairment loss from aircraft sales of 11.8 billion baht in the quarter, it said.

Excluding the foreign exchange gain, income tax and impairment loss, Thai Airways made a profit of 4.4 billion baht, versus a loss of 3.3 billion baht a year earlier. Operating revenue rose 3.4 per cent, while total expenses fell 11.6 per cent after fuel costs dropped in line with global oil prices.

REUTERS