Cathay Pacific Group issues profit warning

In its 2019 annual results announcement dated March 11, 2020, the Cathay Pacific Group disclosed that it expected to incur a substantial loss for the first half of 2020. Based on the unaudited results of the Group for the six months ended June 30, 2020, the Directors of Cathay Pacific Airways estimate that the Group will record a net loss attributable to shareholders of approximately HK$9.9 billion, which compares to a net profit to shareholders of HK$1.3 billion for the same period in 2019.

Last week, Cathay Pacific’s shareholders passed the resolutions pertaining to the company’s HK$39 billion recapitalization plan. The management team is moving forward with a comprehensive review of all aspects of the Group’s operations and will make its recommendations to the Board on the future size and shape of the airlines by the fourth quarter.

This includes impairment charges amounting to approximately HK$2.4 billion, which mainly relate to 16 aircraft that are unlikely to re-enter meaningful economic service again before the 2021 summer season, together with certain airline service subsidiaries assets. (US$ = HK$7.75 at time of publication.)

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