Cathay Pacific 2014 net profit below expectations

HONG KONG (AFP) – Hong Kong flag carrier Cathay Pacific's net profit for 2014 rose more than 20 percent but failed to meet analysts' expectations, results showed Wednesday, with the airline hit by losses on fuel hedging.

Cathay, whose shares dipped on the news, insisted that overall demand was strong and its outlook was positive, after reporting a slow start to 2014, affected by high fuel prices and weakness in the air cargo market.

Net profit for last year stood at HK$3.15 billion ($406 million), 20.2 percent higher than the previous year's figure of $2.62 billion, it said in a filing to the Hong Kong stock exchange.

But the figure fell short of expectations, with a survey of 16 analysts by Bloomberg News forecasting a profit of $3.49 billion.

Cathay shares closed down 0.59 percent at HK$16.94 while the Hang Seng Index ended up 0.91 percent.

''For the full year, passenger demand was reasonably firm, with high demand during the peak summer and Christmas periods,'' Cathay chairman John Slosar said in the filing.

''Our business benefited from lower fuel prices in the fourth quarter, but this was partially offset by fuel hedging losses,'' Slosar said, adding that cargo demand started to improve in the summer of 2014.

Slosar said the results were nevertheless ''encouraging''.

Cathay Pacific said in a statement it welcomed the decision and believes it is necessary to maintain Hong Kong's competitiveness as a premier aviation hub.

A record 3.3 billion passengers boarded planes last year worldwide, a jump of 170 million from 2013, the International Air Transport Association said in February.