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flee

2016 Q3 Financial Results for Air Asia Group

By flee, in General Aviation

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flee    5

flee
Posted
AIRASIA X PROFITABLE FOR FOUR CONSECUTIVE QUARTERS


• Load factor at 78% up 3ppts

• Passengers Carried up 35% YoY

• Revenue up 24% YoY

• EBITDAR up 60% YoY

• Operating Profit up >100% YoY

• Net Profit up by >100% YoY

• CASK down 16% YoY

• Average Base Fare up 14% YoY


SEPANG, 22 NOVEMBER 2016 – AirAsia X Berhad (“AAX” or “the Company”), the long-haul lowcost airline affiliate of AirAsia Group, today reported its financial results for the Third Quarter (“3Q16”) ended 30 September 2016.


The Company recorded its fourth consecutive quarter profit and is well on track for a positive 2016. Revenue grew 24% year-on-year (“YoY”) to RM982.4 million mainly attributed by 54% YoY increase in scheduled flight revenue, 50% growth in ancillary income and 34% rise in aircraft operating lease income. During the quarter under review, passengers carried increased 35% bringing load factor up 3 ppts to 78% despite a 34% capacity injection to 7,749 million from 5,770 million Available Seat Kilometer (“ASK”) as compared to the same period last year. Average base fare similarly recorded a growth of 14% YoY to RM501 on the back of healthy demand mainly from China and North Asia

markets.


Revenue per Available Seat Kilometer (“RASK”) was down 8% YoY from 13.78 sen to 12.70 sen during the quarter under review. The marginal drop in RASK was due to increased capacity on existing routes and therefore pressuring yields. However, the Company’s cost, measured in terms of Cost per Available Seat Kilometer (“CASK”), was significantly reduced to 12.06 sen against 14.32 sen during the same period last year, a drop of 16% YoY. The decrease in CASK was due to the Company benefiting from lower average fuel price environment. Despite the 31% increase in fuel consumption from 851,839 barrels in 3Q15 to 1,117,353 barrels in 3Q16 due to more sectors flown, the decrease in fuel price by 23% from USD82 per barrel in 3Q15 to USD63 per barrel in 3Q16 effectively lowered overall fuel expenditure.


AAX posted an operating profit of RM 50.8 million (up 263% YoY) and net operating profit of RM44.0 million (up 200% YoY). Meanwhile, Net Profit after Tax (PAT) stood at RM11.0 million, as compared to losses of RM288.2 million the same period last year. Year-To-Date(YTD) profit for AAX stands at RM 191.5 million and is on track to record its first full year profit since listing.


AirAsia X Group CEO Datuk Kamarudin Meranun said, “We are pleased that despite a weak travelling season and increased capacity, we managed to deliver a humble net profit which attests to the commercial viability of the long-haul low-cost model. However, much work still needs to be done and the team are focused and committed to ensure positive growth amid these challenging environment.”


“The third quarter for Malaysia AirAsia X (“MAAX”) have seen great capacity injected amounting to 10% out of the 32% planned for the whole year. This was to set the tone for future quarters especially the fourth quarter of 2016 and the first quarter of 2017, both historically strong quarters. Australia routes continue to be MAAX’s highest revenue contributor at 33% of total revenue, with 52% growth YoY due to higher passenger traffic as we increased our frequency into both Sydney and Gold Coast during the quarter under review followed by China sectors. Average base fare has improved 14% YoY as a result of better connectivity and improved timing on our Fly-Thru routes, making makes us the preferred choice among customers as well as the price rationalisation by our competitors.”


“Thailand AirAsia X (“TAAX”) recorded a strong 85% load factor, an increase of 14ppts YoY from 71% in the same period last year. There were no new routes or frequencies added during the quarter as we were focusing on turning around our current routes. The turnaround at TAAX is taking shape, with our forward booking curve for fourth quarter taking positive shape. Indonesia AirAsia X (“IAAX”), on the other hand, has been temporarily suspended, with the termination of Sydney and Melbourne services from 1 September 2016. The suspension of these services is part of a network restructuring aimed at improving operational efficiencies at IAAX before resuming operations again.


“We remain cautiously optimistic that we are on track to achieving our first full year profit since 2013, without neglecting to take necessary precautions on factors beyond our control such as currency volatility, regulatory uncertainty and other external factors which are expected to persist.”


Malaysia AirAsia X CEO Benyamin Ismail added, “We have done it once more and this positive performance proves yet again that AirAsia X’s lean and disciplined cost structure is resilient and is able to deliver despite a challenging quarter.”


“Revenue improved 24% YoY to RM982.4 million from RM793.0 million a year ago. Scheduled flight revenue contributed 62% to total revenue for the quarter under review as we are slowly moving away from charter services to gain better yields, which has now proven to be a working strategy. On top of that, ancillary revenue grew 50% YoY to RM161.8 million as a result of better take-up rate as ancillary per pax increased 10% YoY from RM122 to RM134 per passenger. We expect the continuous growth moving forward with the launch of our new Premium Red Lounge, with passenger surpassing our forecast by 190% since launching. On top of that, we have also partnered with a local celebrity to further promote our duty-free platform which will help enhance our product offering and help stimulate ancillary income”


On managing cost, Benyamin highlighted, “CASK has dropped 16% to a low 12.06 sen from 14.32 sen against the same period last year. The low fuel price has benefited us and we have hedged 100% of required fuel at USD 56 per barrel on planned existing routes which allows us to better manage cost and mitigate fuel volatility as we venture into new routes.


On the balance sheet, Benyamin continued, “The management monitors the Company’s net gearing level closely to ensure that it is constantly at a healthy and comfortable level. As at end of 3Q16, the Company’s total borrowings has actually reduced by 22% RM1.12 billion from RM 1.43 billion in 4Q15 as we have constantly pared down our working capital borrowings from stronger cash balances. The Company’s net gearing ratio stood at 0.78 as at end 3Q16, 13% lower against the preceding quarter as a result of lower total debt and increase in cash.”


Commenting on the Company’s outlook, Benyamin said, “Going into the peak end-of-year holiday season, Malaysia AirAsia X is benefiting from the weaker currency environment that has led to local customers trading down when going vacation and other nationalities looking at Malaysia as a value-for-money holiday destination. The destinations that we fly to are more appealing compared to higher currency destinations such as Europe and North America.”


Bursa Malaysia filing:



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flee    5

flee
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AirAsia X earnings slightly below forecast, says CIMB Research

 

KUALA LUMPUR: AirAsiaX’s nine months core net profit was probably 10% below expectations, accounting for about 45% of CIMB Equities Research’s previous full-year forecast due to lower-than-expected yields.

But the research house pointed out on Wednesday that still, there is no denying that it was a good performance for the nine months ended Sept 30, 2016, recovering dramatically from last year’s losses due to low oil prices coinciding with Malaysia Airlines capacity cuts.
“But we think earnings will peak in FY16F and we forecast FY17F earnings to fall quite steeply on-year, from the weaker ringgit exchange rate and fiercer competition. We stay Reduce with a lower target price (19 sen), still based on one time price-to-book value (P/BV),” it said.
CIMB Research said AAX delivered a strong operating performance in 3Q16, where available seat per kilometre (ASK) capacity growth of 34.3% on-year was exceeded by revenue per kilometre (RPK) demand growth of 39.3%, leading to a 2.8 percentage point rise in PLF to 77.9%.
“AAX delivered a core net profit in 3Q16 and 9M16, reversing last year’s steep losses, on lower oil prices, MAS capacity cuts from Aug 2016 and AAX’s recovery from the QZ8501 crash in late-2014, which had hit demand from China and Australia.
“Since the start of 2016, AAX has grown capacity to a variety of places. Additional capacity increases will be seen for 4Q16F and beyond. Mauritius and Madinah were recently introduced while frequencies were increased to Sydney and Osaka.
“Melbourne and Taipei will soon each see capacity increased too. 4Q16 ASK growth could hit rise to 40%, in our estimate, which could dampen the on-year yield and RASK improvements that we had seen all through the past three quarters,” it said.
CIMB Research said Malindo continues to compete with AAX – first introducing Perth in late-2015 and more recently entering Taipei.
Meanwhile, MAS recently announced plans to double capacity to Shanghai and start its maiden flights from KL to Chongqing and Chengdu, which are both monopoly routes by AAX.
More worrying are MAS’s price promotions, which could affect ticket pricing going forward.
CIMB Research also said although stronger competition has yet to have a very pronounced impact on AAX warned that while 4Q16F “forward loads and average base fares are trending better (on-year)… it remains cautious on the back of huge capacity available in the market”.
“Our 36% EPS cut for FY16F is driven by a downward revision in the ringgit exchange rate against the US$ as well as a 1.5% cut in average yield to 13.83 sen/RPK.
“We forecast AAX’s all-in jet fuel price to rise from US$58/bbl in FY16F to US$65 in FY17F as it had opportunistically hedged almost 100% this year at the market low. For next year, 74% have been hedged at a strike price of US$60.
“Meanwhile, the long-haul international airport tax at klia2 will rise from RM32 per passenger now to RM50 on Jan 1, 2017 and to RM73 on Jan 1, 2018, if MAVCOM sticks by its plans. This could impact AAX’s pricing and competitiveness against MAS and Malindo, which operate from KLIA,” it said.

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flee    5

flee
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AirAsia to sell leasing arm in early 2017, posts fourth straight profitable quarter in 3Q

 

KUALA LUMPUR (Nov 24): AirAsia Bhd, which registered its fourth consecutive net profit in the third quarter ended Sept 30, 2016 (3QFY16), said bids are coming in for its leasing arm Asia Aviation Capital Ltd, worth some US$1 billion, with eventual sale of the unit to take place in early 2017.
This is part of the airline's plans to dispose of non-core businesses.
In a statement today, AirAsia group chief executive officer Tan Sri Tony Fernandes revealed that the largest low-cost carrier (LCC) in Asia will also go to the markets with two potential initial public offerings, namely its flight crew training centre AirAsia Academy on Bursa Malaysia and Asean Holding Co on the Hong Kong stock exchange.
"In 2017, we also hope to break ground on new low-cost airports across Asean. We are working closely with local governments to build dedicated facilities for LCCs in a number of cities with the aim of alleviating congestion and driving higher traffic across our network and bring more tourists into these hubs. Once we get the necessary permissions we can deliver a fully operating airport in less than a year," he added.
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Bursa Malaysia filing:

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flee    5

flee
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THE TRANSFORMATION TO A DIGITAL AIRLINE – THIRD QUARTER 2016


11% INCREASE IN REVENUE

187% INCREASE IN PROFIT AFTER TAX

INDONESIA AIRASIA TURNS TO A NET PROFIT OF IDR486.57 BIL.



3Q16 MALAYSIA

 Load Factor at 89% (up 7 ppts)

 Passengers Carried up 5% YoY

 Revenue up 11% YoY

 Net Operating Profit up 165% YoY

 Profit After Tax up 187% YoY

 EBIT Margin of 31% (up 10 ppts)

 EBITDAR Margin of 50% (up 12 ppts)

 Cost per ASK of 10.51 sen (down 10%)



3Q16 GROUP

 Load Factor at 87% (up 6 ppts)

 Passengers Carried up 11% YoY

 Revenue at RM2.97 billion

 Profit Before Tax at RM 488.7 million




LCCT@KLIA2, 24 November 2016 – AirAsia Berhad (“AirAsia” or “the Company”) today reported its results for the quarter ended 30 September 2016 (“3Q16”).


AirAsia Group – Proforma Consolidated Results of AirAsia Berhad and Associate Airlines

The AirAsia Group, consisting of AirAsia Berhad and associate airlines in Thailand, Indonesia, Philippines, India and Japan, posted combined revenue of RM2.97 billion for the quarter, up 6% from RM2.80 billion in the same quarter last year. Operating profit for the Group was RM525.9 million for the quarter, up from RM332.2 million in the same quarter last year. The Group’s profit before taxation for the quarter

was at RM403.6 million, while cash balances stood at RM2.80 billion.


On the Group 3Q16 financial results, AirAsia Group Chief Executive Officer Tony Fernandes said:


“We have repeated yet another quarter of strong earnings growth. Our Malaysia operations grew revenue by 11% and net operating profit by 165%, helped by higher aircraft lease income and fuel expenses that were 21% lower. Stronger than expected demand drove up seat load factor to a record high of 89% while the average fare per passenger increased by RM7 or 4% year-on-year to RM164.


“Thai AirAsia grew revenue by 12% and increased passenger volume by 21%. Revenue per Available Seat Kilometre (“RASK”) came down 6% year-on-year due to promotional activities but Cost per Available Seat Kilometre (“CASK”) fell by a deeper 7% to compensate.


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