AirAsia planes seen here on the KLIA tarmac. – Reuters
KUALA LUMPUR: Maybank Investment Bank Research expects AirAsia Group Bhd’s core net profit for Q2’18, which will be released on August 30, to come in at RM289mil, a 39% decline year-on-year and 10% decline quarter-on-quarter.
This would bring 1H’18 core net profit to RM596mil, or 48% of its full-year forecast.
The research house noted that yield pressure has increased in Thailand, Indonesia and India in Q2’18 and fuel cost has also surged.
“Fuel price is the main risk for AirAsia in the near term.
“It has a low hedging cover, about 12%, and is thus very susceptible to fuel price swings.
“Moreover, there is mounting pressure on yields as competition has intensified in Thailand, Indonesia and Vietnam,” it said in a note on Friday.
It added that Singapore Changi Airport’s 39% passenger fee increase since July 1, 2018, may also impact demand for Singapore destinations.
“We have factored all these into our forecasts, but we think the consensus is way too optimistic on FY18,” it said.
However, the research house said it remained confident that AirAsia was on track to meet its FY18 forecast.
It maintained its Buy call on the counter and expects an announcement on special dividends in the upcoming Q2 results.
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