SINGAPORE (April 19): China Aviation Oil (Singapore) Corporation, the largest physical jet fuel trader in the Asia Pacific region, reported a 4.7% increase in 1Q earnings to US$25.3 million ($35.4 million) from a year ago, supported by an increase in gross profit and higher share of results from the group’s associated companies.
In the 1Q17 ended March, the group’s gross profit grew 17.4% to US$15.5 million from a year ago. This was mainly due to higher gains derived from trading and optimisation activities, as the group continued to make steady progress in establishing itself as a global top-tier integrated transportation fuels provider.
Backed by higher profit contributions from CAO’s key associate - Shanghai Pudong International Airport Aviation Fuel Supply Company (SPIA), the group’s share of profits from associates rose 5.1% to US$14.9 million.
Share of profits from SPIA increased 7.1% to US$13.0 million, mainly attributable to an increase in gross profit as a result of higher refuelling volumes and higher revenue due to the rebound in oil prices.
Profit contribution from Oilhub Korea Yeosu Co. (OKYC), which was operating at full capacity as at the end of 1Q 2017, was slightly lower at US$1.3 million. This was due mainly to transactional currency exchange losses incurred in the quarter under review despite higher profits from its tank storage leasing activities and mark-to-market gain from OKYC’s currency interest rate swap (CRS) contracts which matured at end March.
Share of profits from China National Aviation Fuel TSN-PEK Pipeline Transportation Corporation (TSN-PEKCL) decreased slightly to US$0.8 million mainly due to lower pipeline transportation volumes and lower other operating income.
Having started operations in the third quarter of 2015, CNAF Hong Kong Refuelling (CNAF HKR) is the third licensed refueller at the Hong Kong International Airport and is currently actively developing its business. During the quarter under review, the group’s share of loss from CNAF HKR narrowed to US$0.21 million, mainly due to higher revenue generated from the increased refuelling volumes
Revenue for 1Q17 more than doubled to US$3.3 billion from a year ago. This was driven largely by higher supply and trading volumes of middle distillates and other oil products, which jumped 49.0% to 7.3 million tonnes in 1Q17 from 4.9 million tonnes a year ago.
Total supply and trading volume for middle distillates increased 24.6% to 4.6 million tonnes, led by a 29.2% increase in jet fuel volumes to 3.9 million tonnes. Trading volume of other oil products also increased by 123.0% to 2.7 million tonnes compared to a year ago, attributable mainly to the expansion of trading in crude oil to China and fuel oil to Middle East market.
Meng Fanqiu, Chief Executive Officer of CAO, said, “Looking ahead, the group will continue our active pursuit of opportunities that will further propel our investments in synergistic and strategic oil-related assets and businesses, and adhere to our long term strategy of growing a sustainable business.”
Shares of CAO closed 6 cents lower at $1.63.
