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MarketScreener Homepage  >  Equities  >  Stock Exchange of Hong Kong  >  Cathay Pacific Airways Ltd    0293   HK0293001514

CATHAY PACIFIC AIRWAYS LTD

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Cathay Pacific freezes new hiring, to focus on cost cuts: memo

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09/11/2019 | 11:30pm EDT
FILE PHOTO: A Cathay Pacific Airways Airbus A350 airplane approaches to land at Changi International Airport in Singapore

HONG KONG (Reuters) - Cathay Pacific Airways Ltd has put a freeze on new hiring, according to an internal memo seen by Reuters, as the airline battles a slump in demand from fliers avoiding Hong Kong amid massive anti-government protests in the city.

In a memo to staff on Wednesday evening, new Chief Executive Augustus Tang said he had asked executives to examine spending and focus on cutting costs. The airline will also not replace departing employees in non-flying positions unless approved by a spending control committee, he said.

Cathay has said it will cut capacity for the upcoming winter season after reporting an 11.3% fall in passenger numbers for August. The airline does not expect September to be any less difficult, while analysts have projected it could swing to a loss in the second half.

Cathay shares fell 2.4% early on Thursday, lagging the benchmark Hang Seng that was down 0.4%.

The weak demand and cuts to capacity will heap more pressure on Cathay and its new management, appointed after CEO Rupert Hogg quit last month in a shock move and the resignation of Chairman John Slosar last week.

Cathay, which is trying to complete a three-year financial turnaround plan, has become the biggest corporate casualty of the Hong Kong protests after China demanded it suspend staff involved in, or supporting, the demonstrations that have plunged the former British colony into a political crisis.

Jefferies analyst Andrew Lee told clients he expected the airline could swing to a HK$973 million ($124.1 million) loss in the second half of the year. BOCOM International analyst Luya You said second-half earnings could be "notably dismal".

Cathay last month swung to its first profit for the January-June period since 2016 and said at the time that the second half was likely to be better as usual due to seasonality.

(Reporting by Jamie Freed and Donny Kwok; Editing by Sayantani Ghosh and Himani Sarkar)

Stocks mentioned in the article
ChangeLast1st jan.
CATHAY PACIFIC AIRWAYS LTD 0.78% 10.3 End-of-day quote.-7.21%
HANG SENG -0.96% 26488.45 Real-time Quote.3.48%
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Financials (HKD)
Sales 2019 109 B
EBIT 2019 4 909 M
Net income 2019 3 408 M
Debt 2019 70 937 M
Yield 2019 3,10%
P/E ratio 2019 12,2x
P/E ratio 2020 9,61x
EV / Sales2019 1,02x
EV / Sales2020 0,98x
Capitalization 40 361 M
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Technical analysis trends CATHAY PACIFIC AIRWAYS LTD
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Income Statement Evolution
Consensus
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Buy
Mean consensus OUTPERFORM
Number of Analysts 18
Average target price 12,57  HKD
Last Close Price 10,26  HKD
Spread / Highest target 70,6%
Spread / Average Target 22,5%
Spread / Lowest Target -41,5%
EPS Revisions
Managers
NameTitle
Rupert Hogg Chief Executive Officer & Executive Director
John Robert Slosar Chairman
Gregory Thomas Forrest Hughes Director, COO & Chief Service Delivery Officer
Martin James Murray Chief Financial Officer & Executive Director
Kwok Leung Chu Non-Executive Director
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