Difficult trading conditions dragged earnings down.
China Aviation Oil's (CAO) profits went down 7.7% YoY to $28.82m (US$21.4m) in Q3, despite increases in revenue and volume.
DBS Equity Research said there was a 26% jump in volumes and 33% increase in revenue to $7b (US$5.2b), but these were not enough to offset lower trading gains from difficult trading conditions.
Gross profit fell 58% YoY to $5.83m ($4.3m), but this was largely offset by strong performance from its associates, which increased 10.4% YoY to $28.95m (US$21.5m).
The "crown jewel" of the company, the exclusive jet fuel refueller in Shanghai Pudong International Airport (SPIA), saw 8.2% YoY growth in contributions to $25.45m (US$18.9m).
Contribution from other associates improved 29% YoY to $3.58m (US$2.66m).
DBS analyst Paul Yong commented, "We continue to like China Aviation Oil given its monopolistic position as the sole importer of bonded jet fuel into China, and for its 33% stake in the exclusive jet fuel refueller in SPIA. It also has a growing international jet fuel supply and trading business that will increasingly benefit from CAO’s greater scale. It is a beneficiary of growing air travel demand both in China and globally as well."
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