John Menzies, the Edinburgh-headquartered global aviation services group, has tumbled into the red after it was hit by weak cargo volumes and cuts in flight schedules.
Releasing half-year results for the six months to the end of June, the group posted a a pre-tax loss of £4.4 million, from a profit of £8.3m a year earlier. That was despite reported revenues rising to £649.9m from £627.2m.
The losses were blamed in part on cuts in flight schedules because of the global grounding of Boeing’s 737 MAX jets in the wake of two fatal crashes.
Chief executive Giles Wilson said: "The first-half result was impacted by the loss of exclusive licences in H2 last year and generally weaker markets. To address this we have taken a number of decisive actions that we expect will improve H2 2019 and underpin our growth ambitions in 2020.
"We continue to drive a company-wide focus on cost reduction, customer engagement and operational discipline, with profitable growth at the forefront of our agenda.
"Looking forward, I continue to see clear opportunities to grow profitably. The structural dynamics of our markets remain strong in the medium and longer term. We have excellent management teams in our business and cutting edge systems that will enable us to deliver sustainable earnings growth, particularly as the market improves."
The interim dividend was held at 6p per share.
The firm - one of Scotland’s oldest companies dating back to 1833 - rattled market confidence recently when it issued a shock profit warning, saying its performance in the first half had fallen short of the mark. It pointed to the headwinds affecting the wider aviation market, including weak cargo volumes and flight schedule reductions.
Menzies became a pure aviation business after selling its newsprint distribution division to a private equity firm. The company began life as a book store business selling copies of The Scotsman over the counter.
Commenting on the latest results, John Moore, senior investment manager at Brewin Dolphin, said: "Turbulence in the aviation industry during 2019 has hit John Menzies in the form of weak cargo volumes - the grounding of the Boeing 737 Max has also had an impact.
"It is an increasingly tough environment for many businesses in aerospace and related sectors - weak consumer confidence is impacting travel plans, trade tariffs are reducing the exchange of goods, and fuel costs have been higher on average this year.
"Notwithstanding these challenges, John Menzies is a solid business and is responding to the difficult environment with cost-cutting and restructuring programmes that should help it weather any further storms."
Shares were down about 5 per cent in early trade.