Philippine carrier Cebu Air’s net profits dive

MANILA–The operator of top Philippine carrier Cebu Pacific Thursday reported its net profit plunged more than 85 percent for last year on huge foreign exchange losses from a weaker peso.

Cebu Air reported an after-tax net profit of 512 million pesos ($11.48 million) in the 12 months to December 2013, down from 3.57 billion pesos in the same period in 2012.

The operator swung into a net loss of 152 million pesos in the fourth quarter, from a net profit of 1.299 billion pesos in the comparative period a year earlier.

“Our outstanding debt, pre-delivery payments (of new aircraft), fuel purchases, leases and some maintenance expenses are pegged on the US dollar,” it said in a statement.

Cebu Air said the exchange rate, fuel, and competition in long-haul routes were key challenges.

It reported that full-year revenues rose 8.2 percent to 41.0 billion pesos last year, but the company suffered foreign exchange losses of 2.063 billion pesos, compared to a gain of 1.205 billion pesos in 2012.

It said Cebu Pacific retained its position as the largest domestic carrier in the Philippines with a 50.4 percent share.

Last month, Cebu Air agreed to acquire small domestic rival Tigerair Philippines for $15 million.