April 24, 2024

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Jeju Air has managed to post noticeable profits in spite of concerns over market conditions, said Shinhan Investment on Feb. 13, maintaining a “buy” recommendation and raising the target price to 42,000 won (US$37.40) from 40,000 won. 

Its fourth-quarter earnings from last year were in line with market expectations, with 317.5 billion won revenue and 5.4 billion won operating profit. Net profit has turned to the red undermined by a 9 billion-won cargo-related fine and 14.8 billion-won loss from financial derivatives.

Its operating profit in the first quarter will rebound to 48.6 billion won, up 5.5 percent on-year, fully reflecting the decline in oil prices since November last year, said analyst Park Gwang-rae. Revenue in the period will gain 14.9 percent to 354.4 billion won.

The low-cost carrier will add six aircrafts this year and reach an economy of scale, which will boost its operating profit by 47 percent, forecast the analyst maintaining a “top pick” in the low-cost carrier industry. 

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