CAL shares extend gains on Q2 profits, boosting transportation sector
Taipei, Aug. 10 (CNA) Shares of China Airlines (CAL), one of Taiwan's leading international carriers, continued to rise Monday from the previous session, attracting buying after the company reported a second-quarter profit despite the impact of the COVID-19 pandemic on the global air transportation industry.
Investors also bought other stocks in the local transportation sector, focusing on the country's other major carrier EVA Airways (EVA Air), although the airline has not yet released its second quarter results, dealers said.
CAL shares rose 4.61 percent to close at NT$8.39 (US$0.29), with 46.12 million shares changing hands on the Taiwan Stock Exchange, where the weighted index ended up 0.51 percent at 12,894.00.
Soon after the market opened, CAL attracted strong follow-up buying from the previous session, when its shares closed up 3.08 percent, dealers said.
The buying extended to EVA Air, which gained 3.73 percent to end at NT$11.11, while the transportation sector closed up 3.61 percent.
For the April-June period, CAL posted NT$2.46 billion in net profit, or NT$0.45 in earnings per share (EPS), at a time when many carriers reported heavy losses due to border controls amid the COVID-19 pandemic.
CAL's second-quarter results were a strong comeback from it net loss of NT$3.77 billion and loss per share of NT$0.69 in the first quarter.
The carrier said a significant drop in its passenger numbers in the second quarter was offset by strong demand for cargo transportation, driven by rush orders for medical equipment, electronics components, and Internet communication devices. According to CAL, it has 18 cargo planes in its fleet.
In the second quarter, CAL's consolidated sales were NT$26.32 billion, with cargo services accounting for NT$23.44 billion, the company reported,
The airline's results for the first half of the year, however, remained in the red, as it reported a net loss of NT$1.3 billion, or loss per share of NT$0.24.
"CAL's second-quarter results were a surprise to many investors, who had been anticipating a big loss amid the COVID-19 pandemic," said Tsai Ming-han (蔡明翰), a manager at Cathay Futures.
As it turned out, he said, CAL got a boost from its cargo services and relatively low fuel costs, which usually account for about 40 percent of a carrier's operating costs.
"Demand for cargo services is expected to continue to grow in the third quarter," Tsai said.
Amid such optimism about cargo transportation, the buying in CAL also spread Monday to marine stocks, with Evergreen Marine Corp. gaining 10 percent, the maximum increase, to close at NT$12.50 and rival Yang Ming Transport Corp. also rising 10 percent to end at NT$7.10.
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