Cathay Pacific Airways (0293) H1 2024 earnings summary

Executive summary

• Achieved a profitable first half of 2024 with attributable profit of HK$3,613 million, despite a 15.3% year-over-year decline, as revenue rose 13.8% to HK$49.6 billion, driven by strong travel demand and solid cargo performance.

• Passenger flights reached 80% of pre-pandemic levels, with capacity up 42.7% and premium travel revenue up 20%, though yields normalized.

• Cargo business remained robust, with volumes up 10.4% and yields only slightly down, supported by strong e-commerce demand.

• Completed the buyback and full redemption of all government preference shares, totaling HK$19.5 billion, and paid HK$2.44 billion in dividends on these shares.

• Continued investment in fleet, cabins, lounges, digital, and sustainability, with over HK$100 billion committed over the next seven years.

Financial highlights

• Revenue rose to HK$49.6 billion in H1 2024 from HK$43.6 billion in H1 2023; passenger revenue up 20% to HK$33.0 billion, cargo revenue up 1.5% to HK$12.6 billion.

• Group attributable profit was HK$3.6 billion, down from HK$4.3 billion in H1 2023; basic EPS at 52.4 HK cents.

• Available unrestricted liquidity increased to HK$25.4 billion as of June 2024; net borrowings down 9.1% to HK$48.0 billion.

• Net debt/equity ratio improved to 0.78 (0.61 excluding certain leases); underlying cost per ATK (without fuel) down 9.4% to HK$2.32.

• Interim dividend of HK$0.20 per ordinary share declared.

Outlook and guidance

• On track to restore 100% of pre-pandemic flights by Q1 2025, targeting 100 destinations and headcount of 29,000 by year-end.

• Expect continued strong cargo demand into the peak season, driven by e-commerce.

• Anticipate further normalization of long-haul yields as industry supply increases.

• Liquidity levels to return to pre-pandemic norms, with ongoing disciplined capital allocation.

• Significant investments planned in fleet, digital, and sustainability, including new-generation aircraft and carbon reduction targets.