KUALA LUMPUR (Feb 28): Capital A Bhd (formerly known as AirAsia Group Bhd) said it fourth quarter net loss narrowed to RM884.09 million, from RM2.46 billion a year prior, on the back of higher aviation revenue, growth from its digital business and strict cost control measures.

The better showing was also helped by an absence of impairments and fuel swap losses during the quarter, the group said in a bourse filing.

Loss per share for the quarter ended Dec 31, 2021 (4QFY21) narrowed to 22.7 sen, from 73.5 sen for 4QFY20.

Quarterly revenue more than doubled to RM717.12 million, from RM328.39 million previously, mainly due to the easing of travel restrictions and introduction of quarantine free travel lanes.

The airline noted that 64% of its revenue for the quarter was driven by its aviation segment at RM462.5 million, followed by 36% or RM254.7 million from its digital businesses.

For the full financial year, Capital A trimmed its net losses to RM3.12 billion or 83 sen per share, from RM5.11 billion or RM1.53 per share for FY20.

This was despite a marked decline in revenue to RM1.73 billion, from RM3.27 billion in FY20.

Capital A said 58% of its full year revenue was contributed by its aviation segment. It noted that although the airline revenue was down by 65% compared with in FY20 due to a lower operating capacity of 36%, it was able to achieve a healthy load factor of 74%.

The remaining 42% revenue came from its digital business, the group said, adding that the digital business grew 72% year-on-year due to aggressive expansion through more product launches and capturing of more market share.

Capital A said the revival of the airline industry has helped the group improve its financial position, noting that the gradual easing of travel restrictions in the Southeast Asian region has contributed to growth in passengers carried and a higher load factor.

The group also highlighted that it ended FY21 in a positive net cash flow position of RM725.8 million, from a negative net cash flow position of RM2.2 billion in FY20.

It managed to lower its cash outflow to its operating activities by 84.54% to RM335.2 million, from RM2.17 billion in FY20, through cost containment exercises.

Capital A also added RM1.27 billion in cash inflow from financing activities for FY21, which included proceeds of placement shares issued, borrowings and RCUIDS (redeemable convertible unsecured Islamic debt securities) proceeds, net off payment for deferred fuel hedge settlements from 2020 and payment of debt and aircraft leases.

As at Dec 31, 2021, Capital A's balance sheet remained at a deficit of close to RM6 billion for its shareholders' equity, leaving it unable to resolve its Practice Note 17 status.

In a separate statement, Capital A said that it ended 4QFY21 with RM1.25 billion in cash balance, which was achieved via its RM974.5 million RCUIDS issuance, US$100 million term loan drawdown, and increasing cash inflow from the recovery of the airline business.

It added that it managed to report its first positive net operating cash flow in 4QFY21 since the pandemic started in 1QFY20, averaging RM106 million operating cash flow gain per month.

On prospects, Capital A chief executive officer Tan Sri Tony Fernandes said the best is yet to come for Capital A, noting that the group has pivoted and transformed from an airline into a digital travel and lifestyle services group with the goal to see its digital segment contributing to around 50% of overall group revenue by 2026.

"Once the airlines return to pre-pandemic levels in the near future, all of our other lines of business will benefit significantly and will all soar to new heights," he said.

Capital A's share price closed 1.5 sen or 2.34% lower at 62.5 sen, valuing the group at RM2.6 billion.