CAO posts 4.7% rise in quarterly earnings

CAO's into-plane refuelling operations at Hong Kong International Airport. Despite the volatility in oil prices and geopolitical uncertainties, the group will continue to expand its global jet fuel supply and trading network, said CEO Meng Fanqiu.
CAO's into-plane refuelling operations at Hong Kong International Airport. Despite the volatility in oil prices and geopolitical uncertainties, the group will continue to expand its global jet fuel supply and trading network, said CEO Meng Fanqiu.PHOTO: CHINA AVIATION OIL

Higher gross profit and contributions from group's associated firms drive net profit rise

Jet fuel trader China Aviation Oil (CAO) recorded only a slight boost in first-quarter earnings, even though its revenue more than doubled.

The improved bottom line was mainly driven by higher gross profit and contributions from the group's associated companies.

CAO yesterday reported a net profit of US$25.3 million (S$35.4 million) for the three months ended March 31, up 4.7 per cent from the US$24.1 million in the same period a year earlier.

Revenue rocketed 126.1 per cent higher to US$3.31 billion. However, the cost of sales also jumped 127 per cent to US$3.29 billion. The revenue boost was powered largely by higher supply and trading volumes of middle distillates and other oil products, which jumped 49 per cent to 7.3 million tonnes for the quarter, said CAO in a statement.

Total supply and trading volume for middle distillates rose 24.6 per cent to 4.6 million tonnes, led by a 29.2 per cent increase in jet fuel volumes to 3.9 million tonnes. Trading volume of other oil products soared 123 per cent to 2.7 million tonnes, owing mainly to trading expansion in crude oil to China and fuel oil to the Middle East market.

  • AT A GLANCE

  • NET PROFIT: US$25.3 million (+4.7%)

  • REVENUE: US$3.31 billion (+126.1%)

Gross profit grew 17.4 per cent to US$15.5 million on the back of higher gains derived from trading and optimisation activities.

CAO's share of profits from associates climbed 5.1 per cent to US$14.9 million, backed by higher profit contributions from the group's key associate, Shanghai Pudong International Airport Aviation Fuel Supply.

Earnings per share came in at 2.94 US cents, up from the 2.81 US cents previously. Net asset value per share stood at 78.84 US cents as at March 31, compared with the 75.53 US cents as at Dec 31 last year.

CAO chief executive Meng Fanqiu noted that against the backdrop of geopolitical uncertainties coupled with volatility in oil prices, the group has continued to gain traction in its global strategy of diversifying the business, supported by its investments in strategic oil-related businesses.

"The group will continue to proactively expand its global jet fuel supply and trading network, as well as actively explore trading opportunities in other oil products," he said.

Shares of CAO closed six cents, or 3.6 per cent, lower at $1.63 yesterday, before the results were released.

A version of this article appeared in the print edition of The Straits Times on April 20, 2017, with the headline 'CAO posts 4.7% rise in quarterly earnings'. Print Edition | Subscribe