Tuesday, 1 May 2018

(The Star) AirAsia Q1 earnings seen favourable

PETALING JAYA: Low-cost carrier AirAsia Group Bhd is expected to record favourable earnings for its first quarter ended March 31, driven by better operational statistics during the period.

PublicInvest Research, in a report yesterday, said AirAsia’s first quarter 2018 passenger volume for its consolidated aircraft operating certificate (AOC), namely Malaysia, Indonesia and Philippines, surged by 16.4% year-on-year to 10.6 million.

“Its fleet size year-on-year grew by 17 aircraft, resulting in its available seat per km (ASK) to increase by 17.6% year-on-year. The passenger load for consolidated AOC however declined by 1.8 percentage points to 87.3%.

“Meanwhile, Thailand AirAsia (TAA), India AirAsia (AAI) and Japan AirAsia (AAJ) operations reported load factors of 91%, 83% and 79% respectively,” it said.

AirAsia’s first quarter results and passenger yield data is expected to be released on May 24.

The research house said the low-cost carrier’s first quarter statistics were within its expectations, accounting for 25% of PublicInvest Research’s 2018 forecast.

MIDF Research meanwhile said AirAsia’s load factor remains comfortable at 87.5%.

“Despite the significant ASK expansion, AirAsia managed to maintain its first quarter 2018 load factor at a healthy level. We deem the quarter-on-quarter growth as encouraging despite a seasonally stronger travel season in the fourth quarter of last year.”

The research house said the group’s first quarter 2018 operational results was robust, setting an encouraging sign throughout the year.

“We remain positive on AirAsia’s earnings prospects predicated on stable demand growth with continuous ASK expansion and new areas of growth in AAI and AAJ. Hence, we are maintaining our buy recommendation with a target price of RM4.80.”

AirAsia’s net profit for its fourth quarter ended Dec 31, 2017 dropped 30% to RM372.65mil from RM465.32mil in the previous corresponding period, as its gain during the quarter was partially offset by current and deferred taxation charges of RM140mil.

Its revenue in the fourth quarter rose to RM2.66bil from RM1.94bil a year earlier.

For its financial year ended Dec 31, 2017, AirAsia’s net profit rose marginally to RM1.64bil from RM1.62bil in the previous corresponding period, while revenue increased to RM9.71bil from RM6.85bil a year earlier.

During the year, the group also delivered an additional 3.93 million seats compared to 2016, which represents an additional 10% growth in capacity compared to 2016.

On its prospects going forward, AirAsia said it expects to achieve an average load factor of 87% in the first quarter of 2018 based on the existing forward booking trend of its Malaysia operations, AAI and Philippines AirAsia.