SINGAPORE (Nov 2): China Aviation Oil saw its revenue for 3Q17 soar 32.6% to US$5.2 billion ($7.1 billion) on an increase in trading volume and oil prices. Costs of sales likewise increased 32.8% to US$5.2 billion.
Earnings for 3Q17 however, dipped 7.7% to US$21.4 million, driven mainly by lower gross profits from lower gains from trading and optimisation activities. Gross profits fell 58.2% to US$4.3 million. This resulted in lower earnings per share of 2.49 US cents for the quarter compared to 2.7 US cents in the same period a year ago.
Share of profits from associates saw a 10.4% increase for 3Q2017 to US$21.5 million, mainly attributable to higher contributions from Pudong and OKYC (Oilhub Korea Yeosu Co).
The company’s cash and cash equivalents stood at $178.3 million at Sept 30.
“Oil price volatility due to production cuts, adverse weather conditions and refineries outages as markets slipped into backwardation in 3Q2017, has led to an increase in supply & operational costs as well as lower gains from the Group’s trading and optimisation activities,” says Meng Fanqiu, chief executive officer, China Aviation Oil.
“Looking ahead, the Group will continue to actively expand on the integration of our jet fuel supply and trading business and grow our aviation marketing business globally. We will continue to seek new and faster opportunities for expansion through investments and M&A opportunities in synergetic and strategic oil related assets and businesses while continuing the expansion of our global jet fuel supply and trading network complemented with trading in other oil products,” he adds.
Shares in CAO closed at $1.76 on Thursday.
