Aug. 29 (Bloomberg) -- China Eastern Airlines Corp., the nation’s second-largest carrier by passenger numbers, saw first-half profit increase 79 percent as Shanghai’s World Expo spurred travel and a stronger yuan cut the repatriated value of debts.
Net income rose to 1.76 billion yuan ($259 million) from 984.7 million yuan a year earlier, the Shanghai-based company said in a Hong Kong stock exchange statement today, citing international accounting standards. Sales rose 94 percent to 33.1 billion yuan.
The carrier’s first-half passenger numbers jumped 45 percent, helped by the acquisition of Shanghai Airlines Co. and the opening of the World Expo in May. China Eastern also made a 155.6 million yuan currency gain after the stronger yuan pared the value of dollar-denominated debts racked up from buying Boeing Co. and Airbus SAS planes.
“China Eastern is the biggest winner from both the Expo and the yuan,” said Harry Chen, a Shenzhen-based analyst at Guotai Junan Securities Co. “A recovering economy also improved passenger and freight volumes.”
China Eastern made a first-half operating profit of 2.54 billion yuan, compared with 2.03 billion yuan a year earlier. It carried a total of 30.1 million passengers.
The airline fell 4.6 percent to HK$3.94 as of the close of trading in Hong Kong on Aug. 27. The company has climbed 42 percent this year, compared with a 49 percent gain for China Southern Airlines Co., the nation’s biggest carrier, and an increase of 37 percent for Air China Ltd.
About 20 million people went to the Shanghai Expo in its first two months. The six-month exhibition may draw a total of 70 million visitors, according to the organizers.
China’s currency has gained about 0.4 percent this year helped by the central bank’s pledge on June 19 to implement a more flexible currency-exchange rate regime.
China Southern reported a first-half operating profit compared with a year-earlier loss as travel recovered from last year’s global recession. Net income surged on the sale of a stake in a maintenance venture. Air China’s net income rose 60 percent on travel demand and fuel-hedging gains.
To contact Bloomberg News staff for this story: Li Xiaowei in Beijing at Xli12@bloomberg.net
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