AirAsia X takes forex hit, 2016 Q4 net profit down 80%

PETALING JAYA: AirAsia X Bhd saw its net profit in the fourth quarter ended Dec 31, 2016 (Q4FY16) plunge 80.24% to RM39 million, from RM197.43 million in the same period last year, mainly due to unrealised foreign exchange losses of RM93.2 million for the three months.
Revenue rose 39.1% to RM1.17 billion, compared with RM841.14 million in the previous corresponding quarter, driven by higher income from scheduled flights, ancillary services, aircraft operating lease, charter flights as well as freight and cargo operations.
The group posted a net profit of RM230.54 million for 2016 – its first full year in the black since its listing in 2013 – against a net loss of RM349.6 million a year ago, while revenue rose 30.82% to RM4 billion, from RM3.06 billion previously.
In a filing with Bursa Malaysia yesterday, the long-haul, low-cost airline said its revenue per available seat kilometre for Q4 was down 3% to 13.83 sen from 14.27 sen, due to the expected increase in capacity on core existing routes to grow market share, putting downward pressure on yields.
However, the group’s cost, measured in terms of cost per available seat kilometre, was significantly reduced to 12.88 sen from 14.50 sen during the same period last year, representing a drop of 11%, due to it benefiting from a lower average fuel price environment and improved utilisation of aircraft.
For 2016, its scheduled flights revenue (net of refunds) increased by 50.5% to RM2.53 billion last year, from RM1.68 billion in 2015 on the back of a 30% increase in the number of passengers carried to 4.7 million in 2016 from 3.6 million in 2015.
On prospects, AirAsia X said based on the current forward bookings, forward loads and average fares are trending better than in the previous year.

However, the group said the depreciation of the ringgit remains a key concern as a large portion of its borrowings and operating costs are denominated in US dollars.
“Barring any unforeseen circumstances, including but not limited to terrorist attacks, natural disasters, epidemics, economic downturn, fuel price hike and fluctuation in foreign currencies against the ringgit, the company expects its prospects to remain positive,” it added.