China Southern Airlines saw growth in its revenues and operating profit last year, although its net profit declined and its cash position took a substantial hit.
The Guangzhou-based carrier’s operating profit for the year ended on 31 December 2019 grew 22.9% to CNY10.8 billion ($1.5 billion).
Revenue was up 7.4% to CNY154 billion, while net profit shrank 8.8% to CNY2.64 billion.
Moreover, its cash and cash equivalents as of 31 December 2019 fell sharply by 73% to CNY1.85 billion.
China Southern says the coronavirus pandemic has “brought about uncertainties in the group’s operating environment and has impacted the group’s operations and financial position”, though it is confident in its liquidity position.
“Based on the group’s actual performance in early 2020, contingent measures put in place and unutilised available banking facilities, the directors of the company have carried out a review of the cash flow forecast of the group for the eighteen months period after the balance sheet date,” it says.
“Based on such forecast, the directors of the company believe that adequate funding will be available for the working capital and capital expenditure requirements of the group during that period.”
The carrier’s fleet size as of 31 December 2019 was 862, a net increase of 22 aircraft compared to the end of 2018.
It introduced 54 aircraft into its fleet, including 22 on operating lease, 28 on finance lease and four purchased aircraft. It also withdrew 32 aircraft from its fleet, including 17 Airbus A320 family aircraft, six Embraer E190s, four Boeing 757s, three A330s and two 737s.