CATHAY PAC AIR(00293)2020-04-07 08:47Financial Performance - Cathay Pacific's revenue for 2019 was HKD 106,973 million, a decrease of 3.7% compared to HKD 111,060 million in 2018[8]. - The net profit attributable to shareholders of Cathay Pacific was HKD 1,691 million, down 27.9% from HKD 2,345 million in the previous year[8]. - Earnings per share decreased to HKD 0.43, a decline of 27.9% from HKD 0.60 in 2018[8]. - The overall performance in 2019 was significantly impacted by geopolitical issues and trade disputes, leading to a severe decline in passenger and cargo volumes[18]. - The company anticipates significant losses in the first half of 2020 due to the impact of social unrest and the COVID-19 pandemic[17]. - The company reported a significant increase in employee expenses, totaling HKD 20,125 million, slightly down from HKD 20,211 million in 2018[150]. - The group reported a net cash increase of HKD 1,269 million for the year, compared to HKD 771 million in 2018, indicating a rise of 64.5%[154]. - The total comprehensive income for the year was HKD 2,678 million, compared to HKD 3,226 million in 2018[150]. - The company declared an interim dividend of HKD 708 million for 2019, following a dividend of HKD 787 million in 2018[156]. Operational Metrics - The total available seat kilometers (ASK) increased by 5.1% to 163,244 million in 2019 from 155,362 million in 2018[9]. - The passenger load factor decreased by 1.8 percentage points to 82.3% in 2019, compared to 84.1% in 2018[9]. - The group experienced a severe drop in passenger traffic and cargo business in the second half of 2019 due to social events in Hong Kong, with a decrease in passenger numbers by 0.7% compared to 2018[15]. - The overall passenger load factor dropped by 1.8 percentage points to 82.3%, while the yield fell by 3.9% to HKD 0.536[16]. - The average passenger load factor for 2019 was significantly lower than in 2018, with a notable decline in short-haul and mainland China routes[15]. - The company streamlined operations to enhance productivity and service quality[47]. Fleet and Expansion - The group has ordered 70 new aircraft to be delivered by the end of 2024, indicating ongoing investment in fleet expansion[7]. - The fleet expansion plan includes the addition of 3 Airbus A350-1000, 4 Airbus A350-900, and 6 Airbus A321-200neo aircraft in 2020[10]. - As of December 31, 2019, Cathay Pacific operated 150 aircraft, with a total of 236 aircraft across the group, including 70 new aircraft on order to be received gradually until 2024[37]. - The airline received two Airbus A350-900 aircraft and four Airbus A350-1000 aircraft in 2019, bringing the total A350 fleet to 24 aircraft[37]. - The company plans to receive five additional Airbus A320-200neo aircraft in early 2021[40]. Cargo Operations - The group reported a 14.3% decline in cargo revenue per available ton kilometer, dropping to HKD 1.20 from HKD 1.40 in 2018[9]. - The cargo revenue for 2019 was HKD 21.15 billion, down 14.2% year-on-year, with cargo capacity decreasing by 6.7%[16]. - The cargo demand was significantly impacted by US-China trade tensions, leading to a decline in performance, although there was a recovery in late 2019 during the peak season[15]. - The cargo volume handled by Cathay Pacific Services decreased, with a total of 1.9 million tons processed, of which 53% were transshipment goods[45]. - The yield per cargo ton kilometer fell by 7.9% to HKD 1.87, reflecting weakened cargo demand due to a strong US dollar and intensified US-China trade tensions[33]. Employee and Workforce - The group employed over 34,200 staff globally, with approximately 28,200 based in Hong Kong as of December 31, 2019[7]. - The company has graduated over 100 trainees from its pilot training program in 2019[80]. - In 2019, Cathay Pacific and Cathay Dragon recruited over 3,000 staff, including 1,500 cabin crew and 350 pilots[80]. - Female employees represented 61.1% of the workforce, up from 59.7%[78]. Sustainability and Corporate Responsibility - Cathay Pacific has offset 32,321 tons of CO2 in 2019 as part of its "Fly Greener" carbon offset program, which has cumulatively offset over 197,000 tons since its inception in 2007[79]. - The company aims to halve its single-use plastic footprint by the end of 2022, having removed over 32 million single-use plastic items annually since 2018[79]. - The airline's "Spare Change" fundraising program has raised nearly HKD 190 million since its establishment in 1991, with HKD 9.5 million donated in 2018 alone to support vulnerable children[80]. - The company is committed to sustainability, targeting a 50% reduction in carbon emissions by 2030[81]. Governance and Risk Management - The board of directors is responsible for the strategic leadership and oversight of the group, aiming to maximize shareholder returns while considering the interests of business partners and other stakeholders[107]. - The company has established a risk management framework based on the "three lines of defense" principle, with the board being fully responsible for risk management systems and procedures[126]. - The audit committee held three meetings during 2019, with the CEO, CFO, and external auditors regularly attending[132]. - The company has implemented a fuel hedging policy to manage fuel price volatility[132]. - The board has established various committees, including the audit committee and risk management committee, to assist in fulfilling its duties[110]. Financial Position and Liabilities - The total asset value as of December 31, 2019, was HKD 214.516 billion, with right-of-use assets amounting to HKD 17.35 billion recognized due to the adoption of HKFRS 16[69]. - The group’s total liabilities increased to HKD 94,878 million in 2019 from HKD 78,010 million in 2018, reflecting a growth of 21.6%[152]. - The company’s net debt was HKD 100 billion, with a significant portion in Hong Kong dollars[73]. - The group recognized a total of HKD 4,412 million in deferred liabilities in 2019, compared to HKD 3,335 million in 2018[197]. - The group’s total long-term liabilities, including borrowings and lease liabilities, reached HKD 97,260 million as of December 31, 2019, compared to HKD 73,877 million in 2018[196].