AirAsia X Q1 results hit by higher fuel expenses

PETALING JAYA: AirAsia X Bhd continued to register a sharp fall in its net profit with a slump of 94.2% to RM10.34 million for the first quarter ended March 31, 2017 against RM179.49 million in the same quarter a year ago, dragged down by higher fuel expenses.
According to the group’s filing with the stock exchange, its aircraft fuel expenses jumped 45.8% to RM501.52 million in Q1’17 compared with RM343.91 million in the same period a year ago.
The group’s operating profit stood at RM60.3 million in Q1’17, down 43% from RM105.1 million in the same period last year. This was mainly attributed by an overall 6% year-on-year depreciation of the ringgit against the US dollar, as most expenses are denominated in the currency.
In addition, jet fuel prices were slightly higher in Q1’17 at US$66 (RM283.14) per barrel against US$64 in Q4’16.
However, AirAsia X saw a 21.6% rise in revenue from RM970.67 million to RM1.18 billion, underpinned by the increase in passengers carried by 33% on the back of 28% increase in seat capacity.
Its load factor was 2% higher at 84% for Q1, but average base fare dipped slightly by 4% from RM566 in Q1’16 to RM544 in Q1’17, whereas ancillary revenue per passenger remained constant at RM150 for Q1’17.
AirAsia X said based on the current forward booking trend, forward loads and average fares are trending better than the previous year.
Nonetheless, the relative weakness of the ringgit remains a key concern as a large portion of the group’s borrowings and operating costs are denominated in the US dollar.
Barring any unforeseen circumstances, AirAsia X expects its prospects to remain positive.
“AirAsia X remains focused on expanding additional capacity that will push our aircraft utilisation to sixteen hours a day and we remain cautiously optimistic for the rest of 2017, without neglecting to take necessary precautions on factors beyond our control such as currency volatility, regulatory uncertainty and other external factors which are expected to persist,” said its CEO Datuk Kamarudin Meranun.