Thai Airways reports lowest profit in four years

Reporting its lowest profit in four years, Thai Airways International PCL has registered a 32.7% net profit decline for fiscal year 2005.

Net income for the fiscal year, ended September 30, fell 33 percent to 6.78 billion baht, or $164 million, from last year's restated profit of 10.08 billion baht, the Bangkok-based airline reported in a filing to the stock exchange. Revenue rose 6.5 percent to 162.5 billion baht.
   
According to local media, the decline would have been worse if the national carrier hadn't bounced back from its biggest quarterly loss in five years - 4.77 billion baht in the third quarter to June 30. The government stripped president Kanok Abhiradee of his management powers in August after the loss. Somchainuk Engtrakul, a Thai board member, was then tasked with returning the airline to profitability.
   
Oil price movements have affected the airline because the carrier hedged less than a third of its fuel purchases. The airline said its fuel costs rose 50 percent to 46.1 billion baht for the fiscal year. Its total operating expenses increased 15 percent to 151.7 billion baht. Thai Airways' fiscal 2005 profit is the lowest since its 1.93 billion baht net income in 2001. For the fourth quarter, the airline had a 74 percent profit gain to 2.35 billion baht, as per the information available.  Passengers numbers for the year totaled 18.13 million, a 7.2% decrease from last year as a result of the tsunami, which deterred tourists from traveling especially during January-March, the company said.
   
"The rebound in passenger numbers and fuel surcharge helped bring the company back to profit," Kavee Chukitkasem, an analyst at Capital Nomura Securities in Bangkok, reportedly said.
   
However, the outlook for THAI in the current quarter, the first of fiscal 2006, is positive as oil prices are easing and Thailand's peak tourist season is underway. Analysts expect the airline to record an 8% rise in profit to 7.3 billion baht for the full year, though Finance Minister Thanong Bidaya has predicted earnings of 10 billion baht, according to bangkokpost.com.