September 10, 2009 / 1:09 PM / 8 years ago

UPDATE 1-Transat turns profit as costs, fuel prices fall

* Q3 net profit C$31 mln vs net loss C$900,000

* Records C$44 mln gain from fuel hedging

* Revenue falls 4.7 percent to C$819.4 mln (Adds detail)

OTTAWA, Sept 10 (Reuters) - Transat AT Inc TRZb.TO reported a third-quarter profit on Thursday compared with a year-earlier loss as the Canadian vacation travel company recorded a big fuel hedge gain, cut operating costs and paid lower fuel prices.

The Air Transat parent posted net earnings of C$31 million ($28.7 million) or 94 Canadian cents per share, for the period ended July 31. That compares with a net loss of C$900,000, or 3 Canadian cents, for the same period last year.

Revenue declined to C$819.4 million from C$859.4 million on lower volumes and prices.

The results include a noncash, nonoperating gain of C$44.4 million, compared with a loss of C$4.7 million for the third quarter of 2008, on the change in fair value of forward contracts for fuel. On an adjusted basis, Transat earned 21 Canadian cents a share.

Transat reported a margin of C$27.2 million, up 86 percent from C$14.6 million in the year-earlier quarter.

Chief Executive Jean-Marc Eustache said the tourism market is proving to be “relatively resilient” and quarterly results were satisfactory given abundant supply, the recession, and H1N1 flu outbreak.

Transat increased its provisions for writedowns on its asset-backed commercial paper by C$6.9 million in the quarter, to a total provision to C$64.3 million.

Shares in the Montreal-based company closed on Wednesday at C$12.80 on the Toronto Stock Exchange. ($1=$1.08 Canadian) (Reporting by Susan Taylor, editing by Gerald E. McCormick)

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