Income

PAL operator recovers with net income P60.6-B

PHILIPPINE STAR/EDD GUMBAN

PAL HOLDINGS, Inc., the publicly traded operator of national carrier Philippine Airlines (PAL), saw its net profit improve to 60.6 billion pesos in 2021 from a loss of 73.1 billion pesos a year earlier, mainly due to an increase in “other income” attributable to the gain from debt settlement and debt cancellation.

The company’s revenue for 2021 reached 58.7 billion pesos, up 6.2% from 55.3 billion pesos in 2020, PAL Holdings said in its annual report released Wednesday.

“The significant increase in revenue is mainly due to the increase in cargo revenue, as air cargo is a critical partner in the delivery of essential goods from the [coronavirus] pandemic,” he said.

The company’s operating expenses were reduced by 23.3 percent to 62.8 billion pesos last year from 81.84 billion pesos previously.

“This is primarily due to expenses related to grounded aircraft which have been recorded in ‘other expense,'” he said.

Expenditure on flight operations decreased by 15.1 billion pesos, 31.3% less than the previous year’s balance of 48.4 billion pesos.

PAL Holdings attributed the decrease to “fleet costs such as depreciation expense and lease costs related to aircraft on the ground which were recorded in ‘other expense’ and fuel expense due to the decrease in number of flights operated”.

The company saw its aircraft and traffic maintenance expenses drop to 6.1 billion pesos, 14.8% lower than the previous 7.2 billion pesos “mainly due to lower maintenance costs. ground assistance and landing and take-off”.

It also saw spending on passenger services drop 21.3% to around 4 billion pesos from 5.1 billion pesos, mainly “due to the decrease in the number of passengers which led to a drop in the food of the passengers and flights”.

At the same time, PAL Holdings saw its maintenance expenditure decrease by more than 19% to 10.1 billion pesos compared to 12.4 billion pesos the previous year due to “planes on the ground and ‘lower use of aircraft’.

The company noted that reservations and sales were lower at 3.16 billion pesos in 2021 compared to 3.20 billion pesos the previous year. He attributed the drop to the “significant decrease in sales due to travel restrictions”.

He said general and administrative expenses reached 6.2 billion pesos, up 11.9% from the previous year’s balance of 5.5 billion pesos, mainly due to “restructuring expenses such as legal and professional fees”.

The company also said that “other income” of 64.4 billion pesos recognized in 2021 was “mainly attributable to gain from debt settlement and debt write-off,” while expenses, net of 29.4 billion pesos in 2020, were “due to the loss of value recognized for certain fleets in operation of the group.

Shares of PAL Holdings closed down 0.79% at 6.30P each on Wednesday. — Arjay L. Balinbin