By Riza Lozada
Flag carrier Philippine Airlines’s parent company, PAL Holdings Inc., reported a 14-percent increase in profit to P55.94 billion in the first half of the year from P48.95 billion a year ago.
In a report to the Philippine Stock Exchange (PSE), PAL Holdings attributed the profit hike to higher passenger revenues and other revenues generated during the period.
The company said the number of passengers rose by 37 percent, mainly in its routes to the Americas, Australia, Japan and Middle East.
It also said the effect of interlining arrangement with PAL Express in the domestic sectors also contributed to the favorable revenue performance during the period.
Total operating expenses for the period, meanwhile went up by 5.5 percent or P2.63 billion, compared with P47.97 billion a year ago, due to higher expenses related to maintenance, passenger service, reservation and sales, and general and administrative, which were offset by the reduction in flying operations.
Flying operations expenses, meanwhile, decreased to P223.3 million, or 21.3 percent, from last year’s same period total of P19.24 billion, due to the decline in average jet fuel price per barrel.
The nine A321s and seven A330 HGW added to PAL’s fleet resulted in higher lease charges by P2.6 billion. Transportation expense also grew by P934.3 million, caused by the increase in number of domestic flights, the company said.
Maintenance costs increased by 47.7 percent in the first six months of this year, attributed to the addition of aircrafts.
Passenger services, including food provision during the flight and cabin crew benefits, contributed also to the hike in costs. PAL spent P3.760 billion on maintenance in the same period last year.
Debt servicing of various long term and short-term obligations resulted in higher financing charges by P147.7 million, or 18.2 percent.
PAL reported gaining “other income-net” of P1.222 billion this first semester, versus the year-ago period of P152.4 million, translating to variance of P1.070 billion, brought about mainly by the reduction in unrealized loss resulting from changes in the fair valuation of outstanding derivative instruments, as well as by the decrease in various expenses related to grounded aircraft.
From posting “other comprehensive loss” of P198.8 million in the first half of last year, PAL gained “other comprehensive income” of P75 million during the current period in review, owing to the effect of foreign exchange translation.
Consolidated total assets stood at P122.117 billion as of end-June, or P12.895 billion higher than the December 31, 2014 balance of P109.222 billion mainly attributed to the upward movement in total current assets by P10.662 billion or 32.4 percent over the December 31, 2014, balance of P32.907 billion.
Current assets improved with cash and cash equivalents balance rising by P12.177 billion, principally due to more cash generated from operations, as well as additional obligations obtained for working capital purposes.
Receivable balance as of June 30 rose by P1.620 billion from P12.056 billion as mainly due to the increase in trade receivables arising from passenger ticket sales, as well as the increase in net receivables from related parties.
Non-current assets climbed to P78.547 billion from P76.314 billion in December 31, 2014, mainly resulting from the acquisition of three A321 aircraft under finance lease.
Total liabilities went up by P6.959 billion over the December 31, 2014, balance of P105.537 billion.
The increase was significantly brought about by the upsurge in non-current liabilities by P10.211 billion offset by the decrease in current liabilities by P3.251 billion.
The escalation in noncurrent liabilities was largely attributable to the increase in long-term obligations-net of current portion, by P9.323 billion.
This was brought about by additional obligations for the three A321 aircraft under finance leases and for working capital purposes.
Total current liabilities reflected a lower balance by 4.5 percent from P71.839 billion balance as of December 31, 2014, to P68.588 billion.