AirAsia X’s net profit rises on forex gains, deferred tax

  • Business
  • Thursday, 24 Aug 2017

FILE PHOTO - An AirAsia X Airbus A340 passenger jet arrives on its inaugural flight from Kuala Lumpur to Paris Orly Airport February 14, 2011. REUTERS/Charles Platiau/File Photo GLOBAL BUSINESS WEEK AHEAD SEARCH GLOBAL BUSINESS 21 AUG FOR ALL IMAGES

KUALA LUMPUR: AirAsia X Bhd (AAX) recorded a jump in net profit to RM47.44mil in the second quarter (Q2) ended June 30 from RM1.02mil a year earlier, contributed by foreign exchange (forex) gains and deferred tax.

The long-haul budget carrier, which announced its unaudited Q2 results to Bursa Malaysia on Thursday, continued to see pressure on its quarterly operating profit due to higher expenses such as for aircraft fuel.

AAX posted a 65% year-on-year (y-o-y) drop in operating profit to RM6.98mil.

However, for the period under review, the airline’s bottom-line was propped up partly by a foreign exchange (forex) gain on borrowings of RM31.90mil, a contrast from a forex loss of RM31.26mil a year earlier. It also benefited from higher deferred taxation during the quarter.

For the first time in the group’s second quarter history, its quarterly revenue crossed the RM1bil mark. It rose 17% y-o-y to hit RM1.036bil in Q2 FY17.

The higher revenue was due to a 34% rise in passengers carried to 1.39 million on the back of a 26% increase in seat capacity.

Load factor is 5 percentage point higher at 80%.

Average base fare was slashed by 14% y-o-y from RM526 to RM455 as a strategy to stimulate demand.

Revenue per available seat kilometre (RASK) was down 7% y-o-y to 12.28 sen in Q2 FY17. The drop in RASK was due to increased capacity on existing routes resulting in lower yields, it said.

On the other hand, cost of available seat kilometre (CASK) improved 7% y-o-y to 12.32 sen while CASK ex-fuel improved 16% y-o-y to 8.13 sen. This was on the back of better cost efficiencies and higher aircraft utilisation.

Freight and cargo revenue, meanwhile, rose by 27% to RM39.2mil in the quarter under review due to higher tonnage transported .

AirAsia X group chief executive officer Datuk Kamarudin Meranun said in a pres statement: “We are pleased that despite challenging market conditions, we still managed to deliver the numbers in what was  historically a lean quarter which again attests to the commercial viability of the long-haul low-cost model.”

He also noted that AirAsia X Malaysia saw more available seat kilometres capacity injected in Q2 FY17 compared to the same quarter last year. 

As for the first six months of the year, AAX’s net profit slid by about two-thirds to RM57.77mil despite the carrier recording a 20% increase in revenue.

On its prospects, AAX said that based on the current forward booking trend, forward loads were trending better than the previous year.

However, it added, the depreciation of the ringgit remained a key concern, as a large portion of the company’s borrowings and operating costs were denominated in US dollars.

Barring any unforeseen circumstances, including fuel price hike and fluctuation in foreign currencies against the ringgit, AAX said it expected its prospects to remain positive.

The directors did not recommend any dividend for the quarter ended June 30.
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