Cathay declares interim dividend despite profit drop
Cathay Pacific on Wednesday announced an interim dividend due to its strong performance in the first six months of 2024, despite reporting a drop in first-half profit from a year ago.  The group posted a net profit of HK$3.6 billion for the first half of the year, down 15 percent compared with the same period in 2023. The firm added that a decrease in profit for its airlines and subsidiaries was "principally attributable to the normalisation of ticket prices". The group recorded a 14 percent year-on-year rise in revenue to HK$49.6 billion. "Our strong performance for the first six months of the year was primarily driven by the ongoing robust demand for travel, and the solid performance of our cargo business," said the airline's chairman Patrick Healy in a statement. "This result has allowed us to announce a first interim dividend payment to ordinary shareholders of HK$0.20 per ordinary share." Cathay's budget arm, HK Express, reported a loss of HK$73 million in the first half of the year, following earnings of HK$333 million in the same period last year. Chief Executive Officer Ronald Lam said the low-cost carrier had been facing engine issues and regional competition, but he remained confident in the airline. "A number of those aircraft are on ground and not being able to generate revenue for HK Express in the short term," Lam told reporters.  "The second issue HK Express is facing short-term, is the very keen competition among short-haul carriers based in Hong Kong, as well as the foreign low-cost carriers flying into Hong Kong."  Healy said the company is on track to reach 100 percent of its pre-pandemic flight levels within the first quarter of 2025 as it enters "the final stretch" of its rebuilding journey.  "We are increasing our group headcount by 5,000 to a total of 29,000 people by the end of this year to support this pace of growth," he said.  The airline had also bought back HK$19.5 billion in preference shares acquired by the government as part of a bailout package to stay afloat, and said it would continue to maintain a lower level of liquidity than it did during the pandemic.  On the future of its fleet, Cathay said it would buy 30 Airbus A330-900 wide-body aircraft, with an option to purchase 30 more. The company did not disclose the purchase price but said it received "significant price concessions".  The basic price is about US$11 billion, or roughly HK$85.8 billion. "These new regional wide-body aircraft are expected to be delivered from 2028 and will join the Cathay Pacific fleet, principally serving destinations in Asia. We now have more than 100 new-generation aircraft in our delivery pipeline, with the rights to acquire 80 additional aircraft in future," Healy said.  The purchase of Airbus aircraft is part of an investment drive of more than HK$100 billion over the next seven years, which also includes newly designed lounges and cabin products.