Transport International Holdings Expects 45-55% Interim Profit Drop from Fuel Price Surge

Transport International Holdings (00062), parent company of Kowloon Motor Bus (KMB), announced it expects basic profit for the interim period ending June to decline approximately 45% to 55%. The ongoing Middle East crisis has driven international fuel prices to surge from around $90 per barrel in late February to a peak exceeding $250 per barrel, nearly tripling in value. Despite temporary fuel and tunnel fee subsidies from the Hong Kong SAR government and internal cost control measures implemented by the group, the company's financial performance has been adversely affected. Basic profit for the same period last year stood at HK$285 million.

Fuel Prices Surge Nearly Threefold from Middle East Crisis

The company stated that the ongoing Middle East crisis has caused international fuel prices to surge sharply and volatility to intensify. Since late February, fuel prices have risen substantially from approximately $90 per barrel to a peak exceeding $250 per barrel. While recent international fuel prices have declined from their peak, the market environment remains highly volatile.

Government Subsidies and Cost Controls Implemented to Offset Impact

The Hong Kong SAR government has provided temporary fuel and tunnel fee subsidies to mitigate the financial impact on transport operators. Transport International Holdings has also implemented various cost control measures to reduce adverse effects on its finances. However, the group's financial performance has inevitably been negatively affected despite these interventions.

Consolidated Results Expected Next Month

The company's consolidated results are expected to be announced next month.

FAQ

What caused Transport International Holdings' interim profit to decline?

The profit decline of 45% to 55% was primarily caused by the sharp surge in international fuel prices driven by the ongoing Middle East crisis. Fuel prices rose from around $90 per barrel in late February to a peak exceeding $250 per barrel.

What measures were taken to reduce the impact of rising fuel costs?

The Hong Kong SAR government provided temporary fuel and tunnel fee subsidies, and Transport International Holdings implemented various internal cost control measures to mitigate the adverse financial effects.