Cebu Pacific photo by RAFFY LERMA
Gokongwei-led airline operator Cebu Air saw a 68.2-percent drop in first quarter net profit to P1.28 billion as expenses escalated with rising cost of fuel and local currency depreciation.
First quarter revenues of this company which operates budget carrier Cebu Pacific rose by 4.7 percent year-on-year to P16.86 billion driven by higher passenger (+2.1 percent), cargo (+21.3 percent) and ancillary services (+10 percent) revenues compared to the same period last year.
The increase in expenses, however, outpaced the growth in revenues.
The group incurred operating expenses of P14.3 billion for the three months, rising by 20.3 percent year-on-year.
“The increase was primarily due to the rise in fuel prices in 2017 coupled with the weakening of the Philippine peso against the U.S. dollar..,” Cebu Air said in a regulatory filing.
The peso depreciated to an average of P50 per U.S. dollar for the three months ended March 31 from an average of P47.27 per U.S. dollar one year ago.
A weaker peso increases the cost of importation, such as of fuel and capital goods.