Korean Air swings to net loss in 2018 from 2017 profit
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Korean Air Lines said Tuesday it swung to a net loss in 2018 from a year earlier due to hefty foreign-exchange losses. The Korean flag carrier posted a net loss of 167.59 billion won ($150 million), after a net profit of 801.9 billion won a year earlier. As the dollar rose to 1,118.1 won at the end of 2018 from 1,071.4 won at the end of 2017, foreign-exchange translation losses reached 363.6 billion won and it cut into the annual earnings results, the statement said.
The won’s weakness also drove up net interest costs to 454.8 billion won, up 55.5 billion won from the previous year, it said. Operating profit fell 28 percent to 676.33 billion won last year from 939.78 billion won a year ago. Sales climbed 7.7 percent.
Questions & Answers
Q.What was the main reason for Korean Air's net loss in 2018?
What was the main reason for Korean Air's net loss in 2018?
Korean Air reported a net loss in 2018 primarily due to significant foreign-exchange losses. The strengthening dollar against the won resulted in 363.6 billion won in foreign-exchange translation losses, which heavily impacted earnings.
Q.How much did Korean Air's net profit change from 2017 to 2018?
How much did Korean Air's net profit change from 2017 to 2018?
Korean Air moved from a net profit of 801.9 billion won in 2017 to a net loss of 167.59 billion won in 2018. This represents a substantial swing in its financial performance over the year.
Q.Did sales increase or decrease for Korean Air in 2018?
Did sales increase or decrease for Korean Air in 2018?
Despite the net loss and falling operating profit, Korean Air's sales actually climbed in 2018. The company saw a 7.7 percent increase in its sales compared to the previous year.
Q.How did currency fluctuations affect net interest costs for the airline?
How did currency fluctuations affect net interest costs for the airline?
The weakness of the Korean won led to an increase in net interest costs for Korean Air. These costs rose by 55.5 billion won from the previous year, reaching a total of 454.8 billion won.
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