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random
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Posting #21: Fri May 30th, 2008 02:25 |
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AirAsia Q1 earnings surge to RM161mil
PETALING JAYA: AirAsia Bhd posted a net profit of RM161.27mil for the first quarter ended March 31, up 85.6% from RM86.87mil a year earlier, boosted by an improvement in its operations, foreign exchange gains and deferred taxation.
Announcing the strong results yesterday, AirAsia said revenue rose 31% to RM535.15mil from RM406.22mil before. Gross profit from operations rose 39.2% to RM129.31mil from RM92.88mil while pre-tax profit jumped 155% to RM110.17mil from RM43.07mil.
At net profit level, the low-cost carrier also benefited from RM51.54mil in deferred taxation. Earnings per share rose to 6.6 sen from 3.7 sen. It also recorded a foreign exchange gain of RM86.16mil against RM26.32mil a year earlier.
Reviewing the results, the airline said the positive growth was underpinned by higher passenger volume and bigger contribution from ancillary income. Passenger volume rose 21% to 2.61 million from 2.16 million previously.
AirAsia aircraft park at the KL International Airport. — Reuters
“Average fares were higher by 10% at RM189 compared with RM171 in the first quarter of 2007,” it said, adding that the higher average fare reflected robust demand for its services and the maturity of certain routes in the network.
However, its load factor eased by 4.4 percentage points to 72% due to significant capacity addition and initial underperformance of new routes. There was some decline in load factors in certain routes due to specific local issues such as snowstorms in China.
On its fuel requirements, AirAsia said it had hedged part of its needs for the second quarter, enabling it to save about US$10mil (RM32.23mil) in the second quarter. Thereafter, it would remain unhedged and buy fuel at spot market rates.
On the outlook, it said the airline industry was facing one of its toughest challenges, with record jet fuel prices, tightening of the credit markets and a slower world economic growth.
AirAsia said a consumer slowdown would see passengers, who would normally take a full-service carrier, opting for a low-cost carrier.
“We are driving this consolidation process as we continue to offer irresistible fares, stimulate new markets, encourage price-sensitive customers and expand to new destinations,” it added.
The budget carrier said that no one was certain how long this situation would continue and that this could see weaker competitors reducing capacity and disappearing eventually.
”In the end, AirAsia will emerge even stronger, reflecting our brand, our sound business model, our unmatched cost advantage, efficient fleet, strength of our route network and our hardworking people,” it added.
Last edited on Fri May 30th, 2008 02:26 by random
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random
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Posting #22: Fri May 30th, 2008 02:27 |
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See how one can be easily misled if they just read the headlines
Surge??
See how the "surge" in earnings is distorted by tax deferment and forex gains
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Moolah
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Posting #23: Fri May 30th, 2008 02:39 |
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| Cud you save the comments made on AA yesterday evening and this morning here?
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random
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Posting #24: Fri May 30th, 2008 03:35 |
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Only your comments?
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random
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Posting #25: Fri May 30th, 2008 03:42 |
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Seng: Free, Airasia Deferred Tax is nearly half of its PBT! I prefer to look at its PBT.
Seng: Also, Airasia borrowings are much bigger than last year, but somehow, instead of having Finance Cost, they have Finance Income ... this one needs to dig deeper how they can have bigger borrowing, but Finance Income ... 
Seng: Also Airasia Depreciation and Amortization is growing ... I suppose with more new airplanes coming in, this number should increase in future, depressing its income in future years
29 May 08, 18:05 Seng: If I'm not mistaken, my memory tells me they might have extended the amortization period, so that this number becomes smaller from accounting perspective. Can't remember exactly though. Needs checking, but I'm too lazy to do that.
Seng: And despite the wonderful earnings reported, their cashflow doesn't look good at all ...
Seng: And despite the wonderful earnings reported, their cashflow doesn't look good at all ...
Seng: Net cash from Operations only $52M vs $292M. Actual cashflow for the quarter is negative, despite huge earnings reported. Investors will be more interested in future cashflows.
Seng: It's interesting that the Key Operating Statistics shows that the average number of Operating Aircraft is around 36. I shudder to think what will happen when they finally receive 100 aircraft with option to buy another 100 ... I wonder what are their plans to employ all these excess planes ...
Seng: Wow, $27 Billion RM has been committed for capital expenditure ... Airasia market cap is only $2.4 Billion, or less than 1/10th. Looks like shareholder must be extremely patient to wait for decades before they can think of receiving actual cash ... ouch ...
Seng: Of course, nothing to stop Airasia from borrowing more money to pay shareholder as dividend, although I don't think they have such plans yet ...
Seng: "Up to 31 March 2008, the AirAsia Group has already taken delivery of 39 new Airbus A320 aircraft in total."; It'll be interesting to see how they plan to employ these new aircrafts compared to my earlier comment at 18:12 about their current usage of 36 aircrafts.
Seng: If I put on my investing hat, I will stay far far away from Airasia ... it reminds me too much of TRANMIL with their excess planes ... once this happens, it will be almost impossible to reverse the cashflow. I have a feeling shareholders must come up with more money in future. And how many more new routes can they come up with without competiting with the global players? Even if they manage to hedge their future oil requirements, they still face huge, huge obstacles. I definitely won't be an investor for this stock 
Seng: Airasia clearly needs a lot of government help. E.g. if it wants to issue bonds in future to raise capital, it'll need Malaysia Ratings Agency to give favorable rating, even though its cashflow may be weak. Tony needs the political connections very, very badly
29 May 08, 18:24 Seng: And if I was a banker, I'll be extremely worried about lending, due to my earlier comment on 18:14. Borrowings are already large, but it will become far larger in future. Again, I'm not sure which bank would be willing to lend, but I think Maybank might have to lend a helping hand if no other bankers want to lend ... again, I think the political connection is necessary for Airasia to just survive. I think the market knows this, and have been selling off Airasia because of our potentially new political landscape that might not tolerate these political connections ...
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random
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Posting #26: Fri May 30th, 2008 03:43 |
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Moolah: Good points on AA Seng. AA market cap only 2.4 bil? Their total loans is 4.235 bil and if u minus the cash in hand of 595 mil... total loans is more than their market cap.
Moolah: Last quarter, AA total loans is only 3.419 billion. Ahem.
Moolah: The massive cash outflow is a massive concren.
Moolah: Less we forget.. the 51 million in tax allowance. End of the day... this tax allowance is whose money???? 
Moolah: So they earn 161 million, which includes 51 million in tax allowance and buried inside is a 86 million gain from forex...
Moolah: Earnings so good that it even warrants a Price War with MAS???
30 May 08, 09:03 Moolah: Also.. point not to be forgotten is that due to the massive loans now, AA's bank financial cost alone is a whopping 49 million per quarter.
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random
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Posting #27: Fri May 30th, 2008 06:13 |
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Dali: name me one LCc that has their own terminal.... that saves a lot of money
Dali: the new planes are budgeted for new routes, whats the point... buy one plane at a time
Dali: u r bashing the financials, leverage which is NECESSARY in running an airline, thats the biz model, u cannot change that
Dali: u look at a biz, must look at the pervading factors within that sector
Dali: u laugh, but the majority of european tourists arriving in asia knows airasia and use them to hop around the region
Dali: its common knowledge all biz travellers try to avoid MAS
Seng: Dali, I'm actually worried about AA depreciation. Take their $27Billion capital for instance. How long can one depreciate this? 25 years or 4% straight line? What's that? 4% x 27B = $1,080 million per year? What's Airasia Net Profit this quarter? $100M? Doesn't this worry you, that the depreciation alone - which one cannot stop once the ball is rolled - is going to be a huge, huge chunk of the business?
30 May 08, 10:24 Dali: seng, u know depreciation is a non cash item, if there are 50 planes, its silly to assume current revenue to pay off
Dali: the planes wont be sittinbg in his backyard
Seng: Dali, you are not answering the questions. The planes must be paid for eventually. It costs $27B. You spread over 25 years. It's 1 Billion.
Dali: how many planes AA has now
Dali: yes, these r smaller planes mind you
Dali: all things being equal u r looking at a quadrupling of revenue
Dali: big planes for heavy routes
Dali: like macau, hk, singapore
Dali: u can milk the sing route no end if u charge 400
Seng: Yeah, I'm afraid I'm no expert ... all I know is AA claims to be low cost carrier, so, for me, hard to see how they can charge too much ... quadrupling revenue when one has limited pricing ability needs a good stretch of imagination, which I don't have
Dali: my basic premise that in asia, operating out of malaysia AA LCC biz model stand the best chance to succeed, as our operating cost structure in Malaysia beats many other Asian countries
Dali: cannot understand why LCCs even think of operating out of Sing or HK... thats why they fold every 12 months
Dali: seng, bigger planes, not straight line multiplication
Dali: right now they fly 4 times a day to macau on smaller planes...2 or 3 on bigger planes makes much better sense... smaller planes to domestic routes
Dali: Thai AA needs a lot more small planes as their domestic travel is huge
Dali: their load factor is there for all to see.... all airlines operate at 65%-78%
Dali: pls grab a regional airline report
Moolah: Ok what about tax rebate from the Govt, Dali? This is a massive help from the govt, yes?
Dali: Moo, agreed
Dali: better to help AA than to help Proton, at least make an Indian rich this tim
30 May 08, 10:42 Dali: singair r the worst in maintenance, u know that
Dali: they keep old planes flying much longer, when the Head of maintenance advised them they should not do that, he got fired, he is now at Cathay
Moolah: I un Dali... but... for me, i think there is a risk there. Take Lim bugger... he recently made noise at MPO salary.. and the money there is nothing compare to AA woh cos as it is AA tax rebate is already some 50+ million per quarter... and if not mistaken.. last year it was mentioned that total rebate or allowance was around 18 billion
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WarrenJ
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Posting #28: Fri May 30th, 2008 08:37 |
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Very good argument , if we look at the business sense Airasia has created a momentum challenged by LCC strat-ups, now it seems like a survival game , if Airasia survived then it would thrived.
Its brand is already strong and well known, now is a really tough time, and if it comes with financial play on the BS or PL Airasia could sell some of its lock-in planes prices and make some since prices has gone up and some of the airlines are on the waiting list. Next Airasia could do a off-Balance Sheet financing, sell and lease to creat a lower charge on its PL.
Maybe we would have to hold for 25 years based on its depreciation rates but then the plane replacement will create depreciation charges again , well on 2nd thought I don't think Airasia would do a sell and lease as its investment allowance is given on the capital allowance of the planes ( depreciation in tax terms) .
How? scratch scratch........
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random
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Posting #29: Sat May 31st, 2008 02:49 |
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Airasia only made RM23 mil from the latest q after stripping off exceptional gains (forex and deferred tax)
Rather smallish don't you think? 
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Moolah
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Posting #30: Sat May 31st, 2008 03:57 |
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Err... i would strip out the forex gain but not the deferred tax woh... it's sort of money gain cos it's a tax allowance...
any differing opinion?
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