SINGAPORE, 5 November 2007 – China Aviation Oil (Singapore)
Corporation Ltd ("CAO") today announced its results for the third quarter
ended 30 September 2007.
The Group recorded a net profit attributable to shareholders (“net profit”) of
US$10.5 million in 3Q 2007, compared to US$7.6 million for the same period
last year, representing an increase of 39%. The increase in net profit was
mainly attributable to a substantial increase in interest income and a
significant reduction in finance costs.

In 3Q 2007, CAO procured and supplied 1.07 million Metric Tonnes (“MT”) of
jet fuel which was a decrease of about 17% as compared to 3Q 2006 where
1.29 million MT of jet fuel was procured and supplied. The total volume of jet
fuel procured and supplied during the first three quarters of 2007 was 2.90
million MT, a reduction of 13% compared to the corresponding period last
year.
Mr Zhang Zhenqi, Executive Director and General Manager of CAO, said,
“The decline in total volume of jet fuel procured and supplied for the first three
quarters was due to a decrease in demand for jet fuel imports in China
corresponding to an increase in China’s domestic production of jet fuel.
“Going forward, jet fuel demand in China is expected to grow with increased
air travel. However, the import level is linked to domestic production,” said Mr
Zhang.
The Group’s revenue for 3Q 2007 was US$747.4 million as compared to
US$925.2 million for the same period last year, representing a decrease of
19%. This reflects the drop in total volume of jet fuel procured and supplied
during the quarter.
Despite lower procurement volumes in 3Q 2007, gross profit during this period
was 5% higher at US$3.5 million. Gross profit in 3Q 2006 was lower due to a
downward adjustment of the fixed margin per barrel for supplies to a major
customer in 2Q 2006 being recorded in 3Q 2006. The purpose of the
adjustment was to bring the pricing in line with other key customers.
nterest income was 71% higher at US$2.5 million in 3Q 2007. This was due
to higher bank balances mainly from the proceeds of the sale of CAO’s stake
in Compania Logistica de Hidrocarburos, S.A. (“CLH”) in 1H 2007.
Finance costs declined 95% to US$0.1 million as a result of substantial
interest savings for CAO from the accelerated full repayment of debts under
the Creditors’ Scheme, which was announced on 17 May 2007. The
accelerated payment was financed by part of the proceeds from the sale of
CLH stake. The significant decline in finance costs contributed to a decline of
42% in the Group’s total expenses in 3Q 2007.
The Group’s 33% share of the results of its associated company, Shanghai
Pudong International Aviation Fuel Supply Company Ltd (“SPIA”) was US$7.5
million for 3Q 2007 compared to US$7.1 million for 3Q 2006, an increase of
6%. This was mainly attributable to the short-term rise in China’s domestic
supply of jet fuel, which has helped to lower SPIA’s average cost of sales and
thus resulted in an improvement in its gross profit.
The Group’s financial position has continued to improve during the quarter.
Net tangible assets (“NTA”) per share as at 30 September 2007 stood at
US$0.3581, an increase of 5% over US$0.3412 as at 30 June 2007. Cash
and cash equivalents increased 14% over the quarter to US$187 million as at
30 September 2007.