China Aviation Oil's net profit falls 26 pct in fourth quarter (updated)

China Aviation Oil (Singapore)

26/02/2014 12:26

* CAO expects Chinese jet fuel demand growth to be flat * Company eyes bio jet fuel, LNG * To review what advantages it has in Australia (Adds CEO's comments; estimates on jet fuel demand growth) SINGAPORE, Feb 26 (Reuters) - China Aviation Oil (Singapore) Ltd  CNAO.SI , the sole importer of jet fuel into China, said its fourth-quarter net profit fell 25.7 percent due to lower contributions from associated firms. CAO, the largest physical jet-fuel trader in the Asia-Pacific region, posted a net profit of $13.5 million for the quarter. The full-year net profit rose 6.1 percent to $70.2 million.  Chief Executive Meng Fanqiu said on the sidelines of its  earnings briefings that CAO has its eyes on the bio jet fuel and liquefied natural gas (LNG) businesses although there are no immediate plans to enter these two markets.  CAO, in which BP  BP.L  holds a 20 percent stake, had said previously that it wanted to expand into trading of other oil products to limit its dependence on aviation fuel as growth slows in China.  ID:nL3N0HD2VY  Meng expects jet fuel demand in China this year to grow 10 percent, flat from 2013.  At the same time, CAO is looking into setting up offices in places including the Middle East and Australia.  "Australia is an importing country and has trading opportunities. We are interested, but we will be very cautious," said Meng, who added that CAO needs to review what advantages it has in Australia where major trading houses are vying for a slice of the fuel pie.  Australia has become one of Asia's biggest fuel importers, creating opportunities for traders as the majors have shut older, small refineries, under pressure to shift investment to oil and gas production that generates better returns. ID:nL3N0LP5ZL  CAO has in late 2013 set up a London office and recruited an ex-consultant of Morgan Stanley's commodities group based in Singapore to spearhead its trading business in its Los Angeles office.  ID:nL4N0J7141  The Chinese firm however expects continued volatility in oil prices due to market uncertainties and will remain cautiously optimistic on core jet fuel supply and trading business. The total amount of jet fuel supplied and traded by CAO crossed 10 million tonnes in its 2013 financial year while trading volumes of other oil products rose 42 percent to 6.1 million tonnes in the year, it said in a statement.  (Reporting by Rujun Shen; Editing by Elaine Hardcastle) ((rujun.shen@thomsonreuters.com)(+65-6403-5666)(Reuters Messaging: rujun.shen.thomsonreuters.com@reuters.net)) Keywords: CAO RESULTS/