Higher forex losses widen AirAsia X's 3Q net loss; weak ringgit remains a key concern

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KUALA LUMPUR (Nov 25): AirAsia X Bhd (AAX), the long-haul, low-cost affiliate of AirAsia Bhd, saw its net loss widen by 36.7% to RM288.19 million or 9.1 sen loss per share for the third quarter ended Sept 30, 2015 (3QFY15) from RM210.85 million or 8.9 sen loss per share a year ago, due to higher foreign exchange (forex) losses on borrowings caused by the weaker ringgit.

AAX said it recognised unrealised forex loss of RM241.3 million in 3QFY15 compared with RM48.2 million in 3QFY14.

However, the airline recorded a lower operating loss of RM31.1 million in 3QFY15 compared with RM132.6 million a year ago, on higher revenue and lower fuel costs.

Revenue rose 13.5% to RM793.01 million from RM698.76 million in 3QFY14, mainly due to higher charter flights revenue, aircraft operating lease income and cargo revenue. As a result, revenue per available seat kilometer (RASK) for 3QFY15 also increased 25% to 13.78 sen from 11.02 sen in 3QFY14.

For the cumulative nine-month period (9MFY15), AAX's net loss rose 60% to RM561.82 million or 17.8 sen loss per share from RM350.92 million or 14.8 sen loss per share in 9MFY14, amid higher forex losses.

The airline recognised unrealised forex loss of RM356.7 million in 9MFY15 compared with RM18.1 million in 9MFY14.

This was despite revenue increasing 4.2% to RM2.21 billion in 9MFY15 from RM2.12 billion in 9MFY14. RASK was also higher by 12.9% at 12.75 sen from 11.3 sen a year ago.

The airline also recorded a lower operating loss of RM139.9 million in 9MFY15 from RM282.2 million in 9MFY14, thanks to higher revenue and lower fuel costs.

Going forward, AAX warned that the depreciation of the ringgit remains a key concern as a large portion of the airline's borrowings and operating costs are denominated in US dollars.

"Operationally, we expect improved operational performance in 4QFY15 and to continue into 2016 as seen in the forward loads, which are higher than in 4QFY14.

"Average fare for 4QFY15 is also higher than in the prior year and passenger numbers are expected to be particularly strong in November and December during the year-end holiday period," said AAX.

AAX shares closed unchanged at 19.5 sen today, bringing a market capitalisation of RM829.63 million.

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