KUALA LUMPUR: PublicInvest Research said AirAsia X Bhd
's 2QFY18 results came in below its and consensus estimates compared to full-year net profit forecasts.
It downgraded its call on the counter to neutral with a lower target price of 35 sen from 44 sen previously.
It said excluding forex gain and tax incentives, 2QFY18 core net loss was RM92mil, resulting in a 1HFY18 core net loss of RM19mil.
"The discrepancy was mainly due to higher-than-expected maintenance and overhaul as well as aircraft fuel costs," it said.
The research house noted that AirAsia X revenue for the quarter was flat year-on-year to RM1bil despite passengers carried jumping 13% year-on-year amid a 12% increase in seat capacity.
"This was due to lower revenue per average seat km (RASK) of 11.77 sen (-4% YoY) during the quarter on the back of lesser demand for international air travel owing to Malaysia’s General Election and reduced capacity in the Australian market. For 1HFY18, revenue jumped 4.6% YoY to RM2.3bn," it said.
Cost per available seat kilometre increased 5% year-on-year during the quarter to 13 sen due to higher fuel price at US$89/bbl.
The airline reported a net operating loss of RM99mil in the quarter due to a naturally weak travel season, higher fuel prices, lower sales following the general election and short-term losses from additional frequencies and new routes.
Meanwhile, the Thailand unit reported higher net profit in the quarter due to more passengers being carried coupled with higher average base fares.
The group will also wind down its operations in Indonesia as it foresees a challenging operational environment.
"The Group is evaluating whether to make a provision for amount owing by IAAX to MAAX in 3Q18 amounting to about RM160m (i.e. RM60m is aircraft related)," said PublicInvest.
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