John Menzies Plc on Tuesday reported a first-half loss compared to a profit last year, hit by weak cargo volumes, contract losses and cuts in flight schedules following the global grounding of Boeing's 737 MAX jets.
The aviation servicing company, which reshuffled its top management this year, is looking to boost profit through cost cuts and is considering options for its business as it warned earlier this year earnings would not grow in 2019.
"The first half has also been impacted by the previously reported 2018 events and makes for a challenging year on year comparison. These include the loss of exclusive licences in the Dominican Republic and Panama," the company said.
A number of airlines have removed the MAX from their schedules until January, expecting it to take that long for Boeing to win approval for reprogrammed stall-prevention software and training that deal with the problems behind MAX crashes.
The aviation sector in Europe has also been battling higher fuel costs, competition among budget airlines as well as a slowing economy.
Menzies (John) plc
Prices delayed by at least 15 minutes.
Edinburgh-based Menzies, which offers ground handling, fuelling and cargo handling services for airlines, said it posted a pretax loss of 4.4 million pounds ($5.31 million) in the six months ended June 30, from a profit of 8.3 million pounds a year earlier.
Underlying pretax profit nearly halved to 8.2 million pounds. However, revenue rose nearly 4% to 649.9 million pounds.
"Menzies is historically second-half weighted ... We think a number of dynamics will feed through that give us confidence in full-year numbers being achieved," Berenberg analysts said in a note.
Menzies rival BBA Aviation reported a dip in first-half profit earlier this month.
($1 = 0.8294 pounds) (Reporting by Pushkala Aripaka in Bengaluru)
Copyright (2019) Thomson Reuters. This article was from Reuters and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to email@example.com.
Free Newsroom email alerts
Register for daily/weekly email alerts with news from The Financial Times, Forbes, Reuters, The Economist and more.