Vietnam Airlines estimated to hit $73m profit

HCM City Securities Corporation (HSC) estimates that Vietnam Airlines Joint Stock Company (VNA) will reach VND1.65 trillion (US$73 million) of net profit this year, exceeding 15 per cent of the year’s plan. — VNS Photo

HSC also forecasts VNA’s net sales at VND81.523 trillion, a year-on-year increase of 16 per cent.

Excluding exchange rate losses, VNA can reach a profit before tax of VND3.06 trillion, down 6 per cent against the previous year.

This forecast is based on the assumption that the number of passengers is two per cent higher than VNA’s plan while the USD/VND exchange rate is one per cent lower.

According to HSC, the movement from buying and selling the airplanes to selling and leaseback (SLB) is a positive step for the company.

In 2017, VNA plans to increase the number of aircrafts to average 91.2 aircraft per year (up 5.7 per cent) and new aircrafts (including four model A350s and one model B787) are invested in the form of SLB.

With the change in aircraft purchase strategy, VNA expects basic investment to drop from $544 million to $128 million, while exchange rate risk is also limited.

Last year, VNA recorded an exchange rate loss of VND666 billion due to borrowing US dollar to buy aircrafts.