(MENAFN- Gulf Times) Air Arabia, the UAE' only publicly-listed airline, reported its third consecutive quarterly profit drop yesterday, as fuel hedges taken out at higher oil prices continued to hurt results despite a jump in passenger numbers.
It made a net profit of 59mn dirhams ($16.1mn) in the three months to December 31, down 13% from the 68mn made a year earlier, said the budget airline, which launched 23 new routes and its fourth hub in Jordan during 2015.
Analysts at SICO Bahrain had estimated the airline would make a fourth-quarter net profit of 79.3mn dirhams - a figure attributable to shareholders. Air Arabia's previous year's figure did not match Thomson Reuters net attributable figure, however, indicating separate calculations.
Air Arabia passenger figures jumped 17% year-on-year in the quarter to 2mn and revenue rose to 957mn dirhams, from 924mn dirhams in the fourth quarter of 2014.
The drop in profit was due to pressure on yields and hedges made at much higher fuel prices. Brent Crude fell about 23% in the fourth quarter alone and is down 70% from its June 2014 peak.
"The impact of low oil prices continues to have its effect on the wider global economy, while pressure on yields and geo-political uncertainty continued to weigh on the aviation industry," Air Arabia's chairman Abdullah al-Thani said in a statement.
Chief executive Adel Ali said in September the impact on earnings from fuel hedging was likely to continue for the next two quarters but he was comfortable with hedging policies for 2016.
Air Arabia's annual profit was 531mn dirhams, down from 566mn dirhams in 2014.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.