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2016 Q4 Financial Results for Air Asia Group

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AirAsia X back in profit since IPO

 

KUALA LUMPUR: AirAsia X Bhd (AAX) returned to profit in the financial year ended Dec 31, 2016 (FY16) after three years of losses, lifted by higher revenue and cost-efficiencies.
The long-haul, low-cost affiliate of AirAsia Bhd posted a net profit of RM230.54 million or 5.6 sen per share in FY16 against a net loss of RM349.62 million or 10.4 sen per share the previous year, while operating profit was RM276 million compared to an operating loss of RM37.4 million in FY15.
Revenue for FY16 rose 30.8% to RM4.01 billion from RM3.06 billion in FY15.
“We began 2017 on a positive note, with our first full-year profit since the initial public offering (IPO) [in 2013] as we strengthen our business in core markets, especially China and Australia,” AAX group chief executive officer (CEO) Datuk Kamarudin Meranun said in a statement yesterday.
“Overall, 2016 has been a great year for AAX despite the challenging environment, demonstrating the commercial viability of the long-haul low-cost model,” he added.
However, the airline saw its net profit drop 80.2% to RM39.01 million or 0.9 sen a share in the fourth quarter ended Dec 31, 2016 (4QFY16) from RM197.43 million or 5.9 sen a share a year ago, mainly due to unrealised foreign exchange (forex) loss of RM93.2 million in the current quarter.
Stripping off the forex impact, AAX said its operating profit was actually up 14.2% to RM100.1 million in 4QFY16 from RM87.7 million in 4QFY15 on higher revenue and more cost-efficiencies.
Quarterly revenue rose 39.1% to RM1.17 billion from RM841.14 million in 4QFY15 on the back of a 40% year-on-year (y-o-y) growth in the number of passengers carried to 1.38 million, in line with capacity growth of 44%. The airline recorded a load factor of 81%.
AAX said the average base fare was down by 4% y-o-y to RM565 in 4QFY16, mainly due to increased frequencies to Australia and promotional fares offered on new routes.
Nevertheless, AAX’s cost — as measured in terms of cost per available seat kilometre — declined 11% to 12.88 sen from 14.5 sen in 4QFY15, thanks to a lower average fuel price environment and improved utilisation of aircraft.
As at end 4QFY16, AAX’s total borrowings stood at RM1.16 billion, with a net gearing ratio of 0.69 times.
In a filing with Bursa Malaysia yesterday, AAX said based on the current forward booking trend, forward loads and average fares are trending better than the previous year.
“However, the depreciation of the ringgit remains a key concern as a large portion of the company’s borrowings and operating costs are denominated in US dollars,” said AAX.
AAX CEO Benyamin Ismail said the airline will look to reduce the impact of forex rates by intensifying sales from stronger currency markets such as the Australian dollar to offset US dollar bills.
“We have also set targets to ensure the company remains lean through various cost initiatives and to maximise the operational synergies between AirAsia and AAX. With this, we have built a recognised brand, exceptional practices, an extensive network, and we believe AAX is in the right position to fly even higher in 2017,” he said.
AAX shares closed unchanged at 41.5 sen yesterday, giving it a market capitalisation of RM1.72 billion.
Airasia X Press Release:
Airasia X Investors' Presentation:
Airasia X Bursa Malaysia Filing:

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AirAsia 2016 net profit up 3.7 times; to ramp up fleet size, frequency this year

 

KUALA LUMPUR (Feb 23): AirAsia Bhd, which posted a 16% slide in fourth-quarter net profit, will grow its fleet size to over 200 aircraft this year as it continues to roll out new destinations in Asean, as well as boost its flight frequency on its "trunk" routes.
Trunk routes refer to high demand routes.
The budget airline will take delivery of 12 Airbus A320neos for its Malaysian operations this year.
"To increase the number of possible connections at our hub at klia2, we intend to increase to daily frequency up to 16 routes currently operated sub-daily, giving a boost to our Fly-Thru traffic," AirAsia group chief executive officer Tan Sri Tony Fernandes said in a statement today.
With all its four airlines in Malaysia, Thailand, Indonesia and the Philippines operationally profitable in 4QFY16, he said the airline will press forward with its expansion to combine the four operations under a single, listed Asean holding company.
"(As such,) we are urging Asean governments to relax ownership restrictions and consider Asean investors as equivalent to local investors," Fernandes added.
AirAsia saw its net profit drop 16% to RM465.32 million or 16.7 sen per share in the fourth quarter ended Dec 31, 2016 (4QFY16) from RM554.11 million or 19.9 sen per share a year ago, due to a 48% decline in aircraft operating lease income.
Quarterly revenue also fell 10.7% to RM1.94 billion from RM2.17 billion in 4QFY15.
In a filing with Bursa Malaysia today, AirAsia said passenger seat sales, however, increased in the current quarter under review, supported by a 5% growth in passenger volume while average fare was up 5% at RM186 from RM177 in 4QFY15.
Ancillary income per passenger, however, fell 4% year-on-year (y-o-y) to RM47 from RM49. The seat load factor was at 87% in 4QFY16, which was 2 percentage points higher than the same period last year.
For the full year FY16, however, the airline's net profit jumped 3.7 times to RM2.04 billion or 73.2 sen per share from RM541.19 million or 19.4 sen per share in FY15, while revenue grew 9.9% to RM6.92 billion from RM6.3 billion the previous year.
AirAsia said the increase in revenue was driven by a 9% growth in passenger volume in FY16, while capacity only increased by 1% y-o-y.
"Ancillary income per passenger increased by 2% to RM48 y-o-y and average fares were also up 6% to RM167 in FY16. The seat load factor was at 87% which was 6 percentage points higher than FY15," it added.
AirAsia's net debt amounted to RM8.8 billion as of Dec 31, 2016. Its gearing ratio fell to 1.3 times at the end of 4QFY16 from 2.29 times a year ago.
On its plans to monetise its leasing arm Asia Aviation Capital Ltd, Fernandes said it is at the due-diligence stage.
"We (also) continue to work towards an initial public offering for our crew training centre, AirAsia Aviation Centre of Excellence, and a dual listing for AirAsia Bhd in the Hong Kong or New York stock exchanges," he added.
Fernandes also pointed to the airline's expansion in India.
"We have plenty of growing to do (this year) even if we won’t start international flights until the second half of 2018. AirAsia India reports the highest aircraft utilisation rate among all short-haul airlines in the AirAsia Group, managing a 52% capacity increase in FY16, with the addition of just two aircraft from an initial fleet of six. Our focus remains on building our footprint and introducing our low fares to many more Indian cities," he said.
On AirAsia Japan Co Ltd, Fernandes said it is approaching a full launch soon. "Training flights as part of the regulator’s requirements took place in early-February and we are looking to open ticket sales from our Nagoya base soon. AirAsia Japan will end 2017 with a fleet of five aircraft,” he added.
On prospects, AirAsia said in Malaysia, the first quarter of 2017 is projected to achieve an average forecast load factor of 89% while for the remaining quarters of the year, it remains confident amid strong demand across most sectors coupled with a favorable fuel price environment despite continuous fare competition in the market. AirAsia’s Malaysian operations account for almost 60% of the airline’s total revenue.
"Barring any unforeseen circumstances, the directors remain positive for the prospects of the group in 2017," it said.
AirAsia shares closed down seven sen or 2.47% at RM2.76 today, bringing a market capitalisation of RM9.19 billion.
Press Release:
Slide Presentation:
Bursa Malaysia Filing:

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If they can start paying more dividends to shareholders........

They have not paid a dividend for two or three years. That is why analysts don't like them. But with the impending sale of AAC, shareholders should see some dividend for 2017.

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Flying the Asean dream: AirAsia to start ball rolling with dual listing

 

KUALA LUMPUR: AirAsia Group, the world’s top low-cost airline, is planning a series of initial public offerings (IPOs) for its affiliates, starting with the dual listing of AirAsia Bhd in either Hong Kong or New York.
AirAsia Group chief executive officer Tan Sri Tony Fernandes told NST Business there was no definite period for the IPO yet as the plan was being reviewed by the airline’s board members.
“The board has been presented with both options (in regard to AirAsia Bhd’s dual listing),” he said on Friday, adding that there were still work to be done on the dual listing.
Fernandes said the move would allow AirAsia Bhd to reach a broader base of investors.
AirAsia Bhd has been listed on Bursa Malaysia’s Main Market since November 2004.

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