Hainan Airlines has warned that it may report a net loss of up to CNY500 million ($74.5 million) for for the 2018 full-year as a result of higher fuel prices, currency movements and losses from asset disposals.
The carrier issued guidance that it expects its net results to be between a loss of CNY500 million and a net profit of up to CNY500 million, compared to its 2017 result of a CNY3.32 billion net profit.
It cited including higher fuel and airport charges, foreign exchange losses from the depreciation of the Chinese yuan against the dollar, and significant losses made from unspecified asset disposals for the expected result.
Hainan is set to release its full year results in March.
The profit warning comes after the carrier disclosed in October an 89% plunge in net profit to CNY180 million for the quarter ended 30 September.
As well as its operational challenges, Hainan has also been caught up in the financial troubles of parent company HNA Group, which has resulted in its bond pricing moving up over the past year.
In October it priced a $100 million bond issuance at 12%, while its domestic bond issues have been priced around 6-7%.
Source: Cirium Dashboard
