KUALA LUMPUR (Feb 28): AirAsia Group Bhd shares fell 5.92% in active trade this morning after it reported a net loss of RM394.97 million in the fourth quarter ended Dec 31, 2018 (4QFY18), on higher fuel prices and operating lease expenses, versus a net profit of RM372.65 million a year earlier.

At 9.09am, AirAsia fell 18 sen to RM2.86 with 7.69 million shares done.

Quarterly revenue grew 6.2% to RM2.82 billion from RM2.66 billion in 4QFY17, after total passengers carried increased 16%.

Full-year net profit rose 21.5% to RM1.98 billion from RM1.63 billion in FY17. Revenue rose 9.2% to RM10.6 billion from RM9.71 billion.

Meanwhile, Hong Leong IB Research downgraded AirAsia to “Hold” at RM3.04 with a lower target price (TP) of RM3.20 (from RM3.65) and said AirAsia reported FY18 core PATMI of RM705.2 million (-52.3% y-o-y), below HLIB forecast and consensus, following a disappointing 4Q18.

In a note today, the research house said AirAsia’s FY18 was affected by higher operational costs (jet fuel, maintenance, lease charges and user fees).

“Management will remain aggressive in its capacity expansion plan with additional 22 aircrafts in 2019 while focusing on cost cutting measures.

“Declared a second interim dividend of 12 sen/share (total 64 sen/share for FY18). “Downgrade to Hold with lower TP: RM3.20 (from RM3.65), based on 10% discount to SOP of RM3.55 post earnings downward adjustments,” it said.