China National Aviation Co (CNAC), which owns 43.2 per cent of Hong Kong Dragon Airlines (Dragonair), has posted a 7.2 per cent increase in pro forma net profit to $402.2 million for the year to December. The result was in line with the prospectus forecast of more than $400 million made when the company was listed in December. The pro forma result showed turnover reached $55.86 million, 13.42 per cent up on the previous year. The share of profits from associates, including Dragonair and its 40 per cent interest in ground-handling service provider Jardine Airport Services, amounted to $432.97 million, up 6.52 per cent. Dragonair accounted for 86.4 per cent of CNAC's pre-tax profit and Jardine Airport Services accounted for 4.1 per cent. Commercial properties made up the rest. Earnings per share rose one cent to 14 cents. The company did not recommend any final dividend. Chairman Wang Guixiang said Dragonair enjoyed growth of 9.3 per cent in revenue and 6.3 per cent in profit despite the Asian financial turmoil and other problems. The negative factors included a weak yen, bird flu, political instability in Cambodia, suspension of the A330 fleet on concerns over the Rolls-Royce Trent 700 engines and the haze problem in Indonesia and Malaysia. Dragonair reported a 13.9 per cent rise in passenger volume to 2.14 million and a 5.9 per cent rise in passenger yield. Cargo carried increased by 44.8 per cent to 39,300 tonnes with a 7 per cent increase in cargo yield. Mr Wang said mainland routes, Dragonair's bread and butter business, remained fairly stable with a relatively high average load factor throughout the year. Dragonair's available seat kilometres increased 15.8 per cent last year. Mr Wang said: 'Despite a slight decline in Dragonair's traffic volume in early 1998, the overall traffic of Dragonair has shown some sign of recovery since April.' The decline came as a result of the after-effects of the bird flu and the continuation of the Asian financial turmoil. Jardine Airport Services showed 16 per cent growth in operating profit and a 2 per cent increase in the number of aircraft movements handled. CNAC's commercial properties saw a 16.4 per cent growth in operating profit.