China Southern stocks tumble on profit slump

Shares in China Southern Airlines fell more than five percent on Tuesday after the company posted a slump in first-half net profit of 85 percent from a year earlier. The company attributed the net income fall for the six months ended June 30 to high fuel costs, fluctuating exchange rates and intense competition. The Guangzhou-based carrier said net profit was 424 million yuan ($66 million) from 2.76 billion in the previous corresponding period. Revenue rose 13 percent to 48.03 billion yuan from 42.41 billion. It carried 41.21 million passengers, representing an increase of 7.2 percent from the same period last year. Passenger revenue was 42.25 billion yuan, up 13.7 percent and representing 93.1 percent of total traffic revenue. Looking ahead, it said the Chinese government's stimulus measures to bolster the country's sagging economic growth would begin to pay dividends in the second half. "Besides, oil price maintains a relatively stable trend, which helps the company to improve its operating result," it said in a filing to the Hong Kong stock exchange late Monday. The company's share price was 5.56 percent weaker at HK$3.40 in mid-morning trade.