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(LEAD) Korean Air Q3 net plunges 88 pct on FX losses

2017/11/14 19:18

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SEOUL, Nov. 14 (Yonhap) -- Korean Air Lines Co., the national flag carrier, said Tuesday that its third-quarter net profit plunged 88 percent from a year earlier on foreign-exchange losses.

Net profit for the three-month period that ended on Sept. 30 nosedived to 61.63 billion won (US$55.5 million) from 510.82 billion won a year earlier, the company said in a statement.

"As the won weakened in the third quarter against the dollar compared to a year ago, it drove up the value of the company's foreign currency-denominated debt and the purchasing cost of jet fuel," a company spokesman said over the phone. This weighed on the net result, he said.

The dollar rose to 1,146.70 won at the end of the third quarter from 1,096.30 won a year earlier, the company said. Airlines usually reflect the currency rate at the end of a quarter to make their earnings report.

Operating profit fell 23 percent on-year to 355.49 billion won in the quarter from 459.99 billion won. Sales rose 3.1 percent to 3.214 trillion won from 3.118 trillion won during the cited period.

Operating profits declined as travel demand from China remained weak due to a diplomatic row with the neighboring country over the deployment of an advanced U.S. anti-missile system in South Korea.

Local passenger carriers were hit by the Chinese government's decision to ban the sale of travel packages to South Korea from March 15 in retaliation for the installation of the Terminal High Altitude Area Defense (THAAD) system in the country.

Beijing explicitly opposed the THAAD system, arguing it could be used against it though Seoul and Washington have said it is purely aimed at deterring missile threats from North Korea.

Looking ahead, Korean Air, a global leading cargo carrier, said it expects revenue in the current quarter to improve backed by higher overseas demand for Korean information and technology products such as mobile phones and semiconductors.

Moreover, it predicted travel demand from China will improve from the fourth quarter as Seoul and Beijing have recently agreed to put their soured relations back on track.

sam@yna.co.kr

kyongae.choi@yna.co.kr

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