Following Hanjin collapse, Korean Air soars to record profit
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Korean Air has reported the largest quarterly profit in its history, dispelling recent worries about its financial stability.
In the third quarter of 2016, which ended on 30 September, the national carrier generated an operating profit of KRW447.6 billion (US$385 million), up 34.9% year-on-year and its strongest ever three-month result, surpassing the previous record of KRW416.5bn set in the third quarter of 2010.
This result was driven by a 4.7% increase in sales revenue, to KRW3.06 trillion.
The result is in stark contrast to the performance of Korean Air’s sister company, Hanjin Shipping, which filed for bankruptcy protection in August. But the airline said this had actually improved its financial results, as its statements for the past three quarters had reflected a loss of more than KRW825bn which was related to Hanjin.
“Korean Air has completely removed its financial risk brought by Hanjin Shipping. Furthermore, thanks to the biggest quarterly profit and the increase in capital, Korean Air reduced its debt ratio to 917%,” the company said.
“As Hanjin Shipping is under court receivership, Hanjin Group will no longer provide further financial support to the company. Thus, Korean Air’s debt ratio will not be influenced anymore,” a Korean Air spokesperson said. “We will monitor closely on the market response and will put in our best effort to improve our financial structure.”
Korean Air also returned to net profit in the third quarter of 2016, with the positive KRW428bn result reversing the KRW510bn net loss experienced in the same period last year.
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