AirAsia X's Q2 net profit soars on forex gains, deferred tax

PETALING JAYA: AirAsia X Bhd’s (AAX) net profit for the second quarter ended June 30, 2017 jumped more than 46-fold to RM47.44 million from RM1.02 million a year ago due to foreign exchange gains and deferred tax recorded during the quarter.

In a filing with Bursa Malaysia yesterday, the long-haul, low-cost carrier reported a net foreign exchange gain of RM28.48 million compared with a net foreign exchange loss of RM30.73 million a year ago while deferred tax was higher at RM21.02 million compared with RM10.37 million a year ago.

Revenue for the quarter rose 17.34% to RM1.04 billion from RM883.16 million a year ago due to a 34% increase in passengers carried, which exceeded the 26% increase in seat capacity.

During the quarter, AAX recorded lower average base fare at RM455 in order to stimulate demand. Load factor rose 5% to 80% despite a 26% capacity injection to 8.4 billion against 6.7 billion available seat kilometres (ASK) a year ago.

Revenue per ASK (RASK) fell 7% to 12.28 sen due to increased capacity on existing routes, resulting in lower yields while cost per ASK (CASK) improved 7% to 12.32 sen. Excluding fuel, CASK improved 16% to 8.13 sen.

For the six months ended June 30, 2017, net profit fell 67.99% to RM57.77 million from RM180.51 million a year ago while revenue rose 19.59% to RM2.22 billion from RM1.85 billion.

AAX said forward loads are trending better than in the previous year, based on the current booking trend and expects prospects to remain positive, barring unforeseen circumstances.

“However, the depreciation of the ringgit remains a key concern as a large portion of the company’s borrowings and operating costs are denominated in US dollars,” it said.

At the end of the second quarter, its US dollar-denominated borrowings were reduced by 9% to US$235.7 million from US$258.4 million in the first quarter while net gearing ratio stood at 0.61 times at the end of the second quarter.

AAX’s share price closed unchanged at 39 sen yesterday with a total of 7.77 million shares traded. Its market capitalisation stood at RM1.62 billion.