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.