April 27, 2024

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[THE INVESTOR] Korean Air’s second-quarter earnings were slow but expectations for the latter half still remain, said Hanwha Investment and Securities on Aug. 16, maintaining a “buy” recommendation and 41,000 won (US$36.29) target price. 

Weighed down by 30 percent hike in jet fuel price, its operating profit in the period plunged 61.4 percent on-year to 66.7 billion won, 47 percent below market expectations. Although the fuel cost increase was similar to that of its rival, the level of break-even point on Chinese routes was higher. Moreover, 24 billion won one-off personnel costs and the struggling Los Angeles hotel further dragged the bottom line down, said analyst Kim Yu-hyeok.

The third quarter is high season for passenger services and the Chuseok holiday in September will have a low baseline effect. Revenue from the cargo sector will remain on an upturn as fares continue to rise into the fourth quarter, he added.

By Hwang You-mee (glamazon@heraldcorp.com)