Cathay Pacific is regaining its mojo. It expects in August to report a net profit for the first half of 2023, after three straight years of losses. It also announced plans to buy back preference shares worth HK$19.5 billion, about $2.5 billion at current exchange rates, issued to the Hong Kong government as part of the carrier’s pandemic bailout in 2020. The double good news helps clear the runway for a smoother recovery.
for the first half of 2023, after three straight years of losses. It also announced plans to buy back preference shares worth HK$19.5 billion, about $2.5 billion at current exchange rates, issued to the Hong Kong government as part of the carrier’s pandemic bailout in 2020. The double good news helps clear the runway for a smoother recovery.
The return to profitability for the $7 billion airline, which expects earnings of as much as HK$4.5 billion, is well-timed. Dividends owed on the preference shares are due to rise from 3% to 5% in August and would continue to rise to as much as 9%. Buying back the shares, as the company plans to do within the next 12 months, will avoid the higher coupons. Investors bid the stock up as much as 6% on the news.
There’s still plenty of turbulence ahead. Pilots and staff are still grumbling about wages, and a nasty incident in May involving cabin crew members mocking a passenger’s English abilities on a flight from the mainland Chinese city of Chengdu to Hong Kong prompted CEO Ronald Lam to issue an . But as Cathay aims to return to 100% of pre-pandemic capacity by the end of 2024, confidence is returning to Hong Kong’s skies. Byju’s virtue-signalling is late but valuable
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