South Korea’s leading budget carrier Jeju Air Co. reported a 6.4 percent on-year drop in operating profit for the July-September period despite strong revenue due to increased fuel costs from higher oil prices.
In a regulatory filing on Tuesday, Jeju Air posted an operating profit of 37.8 billion won ($33.6 million), down 6.4 percent from a year ago due to higher oil prices. Net profit fell 3.7 percent on year to 31.1 billion won, while sales gained 31.3 percent to total 350.1 billion won.
On Tuesday, shares of Jeju Air were 5.13 percent higher to close at 34,850 won in Seoul trading.
Its cumulative operating profit from January to September added 14.4 percent on year to 95.8 billion won on sales of 941.9 billion won, raising expectations that the carrier would achieve the annual sales milestone of 1 trillion won this year for the first time among the Korean LCCs. It earned 996.4 billion won in revenue last year.
The sales growth was largely driven by expanded preemptive investment despite unfavorable market conditions like high oil prices, said Jeju Air. The company added six aircrafts by September this year to expand new routes and regular flights. It will add two more aircrafts to its fleet by the end of this year to fly to 70 destinations.
Jeju Air in a separate disclosure announced a buyback plan to bolster value for stakeholders. It will buy 56,327 in its own shares worth about 5 billion won until May next year.
By Hwang Soon-min and Lee Ha-yeon
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]