China Aviation Oil (CAO) posted strong third-quarter earnings on the back of higher gains from its jet-fuel trading business and lower expenses.

Net profit for the three months ended Sept 30 jumped 142 per cent to US$17.7 million (S$25 million) from the figure in the same period last year.

But revenue plunged 49.8 per cent to US$2.4 billion, largely owing to lower oil prices. Total supply and trading volumes for jet fuel and other oil products rose 6.1 per cent to 5.78 million tonnes for the quarter.

The share of profits from associated companies also fell, by 35.9 per cent to US$9.7 million, mainly because of lower contribution from the Shanghai Pudong International Airport Aviation Fuel Supply Company. Its earnings suffered a hit because of lower refuelling sale prices.

The decrease was partially offset by higher contribution from its pipeline transportation subsidiary, which contributed US$0.9 million owing to higher volume and an increase in other operating income.

Earnings per share was 2.06 US cents, up from 0.85 US cent a year earlier. Net asset value per share was 67.92 US cents as of Sept 30, up from 64.35 US cents as of Dec 31 last year.

"Our continued profitability despite an immensely challenging trading environment is an affirmation of our growing strengths in the jet-fuel market," said chief executive Meng Fanqiu in a statement yesterday.

In the third quarter, CAO's Hong Kong subsidiary, which provides refuelling services for aircraft at the local airport, commenced operations.

Mr Meng said the Hong Kong operations are a milestone achievement in CAO's expansion plans. "We will continue to build and bolster our global jet-fuel trading network, which includes expanding our aviation-marketing business into more airports outside China."

He said China's strong demand for jet fuel will continue to be a growth driver and provide support for its jet-fuel supply and aviation-marketing businesses.

As the sole importer of jet fuel into China, CAO will play to its strengths in the jet-fuel business, leveraging on it for further expansion, he said. But it will also stay on course to diversify into other oil products to complement the fuel oil business.

Despite global economic and geopolitical uncertainties, the company is still on the lookout for investment opportunities in oil-related assets and businesses. Mr Meng believes such acquisitions will help drive CAO's strategic transformation into a top-tier global integrated transportation fuel provider.

CAO shares closed 0.5 cent lower at 71.5 cents yesterday before the results announcement.