PETALING JAYA: AirAsia Group Bhd has proposed to declare a special dividend of 90 sen per share for the first quarter ended March 31, 2019 despite a 91.6% plunge in net profit to RM96.09 million from RM1.14 billion a year ago, due to a gain on partial disposal of a subsidiary last year.
The special dividend is payable on Aug 29, 2019.
In a filing with Bursa Malaysia, the group said that its earnings last year included a gain on a partial disposal of a subsidiary of RM350.3 million as well as a remeasurement gain on the retained interest in a former subsidiary of RM534.7 million.
During the quarter under review, the group’s earnings were also affected by an additional charge of RM38.2 million on the adoption of MFRS 16.
Revenue for the quarter rose 12.8% to RM2.88 billion from RM2.56 billion a year ago driven by an 18% growth in total passengers carried and a higher load factor of 88%. However, overall unit passenger revenue fell 3% from RM218 to RM212.
In line with the growth in revenue, the group’s earnings before interest, tax, depreciation and amortisation (ebitda) rose 6% to RM678.4 million from RM642.9 million a year ago.
The growth in revenue was offset by higher staff costs and user charges and related expenses in line with the 17% increase in capacity, which incurred more operations staff costs, route charges and landing charges.
Maintenance and overhaul also increased by 64% as higher provision for engine overhaul was made as a result of higher number of leased aircraft on the completion of sales and leaseback transaction in the fourth quarter last year.
Following the adoption of MFRS 16: Leases, aircraft operating lease expenses were no longer recognised as part of the income statement but as a reduction of lease liabilities. The aircraft operating lease expense was replaced by recognition of depreciation and interest.
The airline carried 12.55 million passengers during the quarter, up 18% from 10.65 million passengers carried a year ago. Capacity grew 17% to 14.27 million from 12.2 million a year ago while seat load factor stood at 88%, slightly higher than 87% a year ago.
Revenue passenger kilometres (RPK) rose 13% to 15,678 million while available seat kilometres (ASK) grew 11% to 17,788 million during the quarter. Revenue per ASK rose 3% to 15.1 sen while cost per ASK rose 8% to 14.57 sen.
The group expects its overall core results for the year to be better than 2018. For the airline business, the group said load factors for the rest of 2019 are showing strong momentum while fares are holding steady.
“Our strategy remains to gain dominance in the countries we operate in, especially within the Asean region. This year, we have planned for a net fleet growth of 18 aircraft across our AOCs (air operator’s certificate),” it said.
Although it has not seen any material negative impact from the trade war, the group noted that currency weakness remains a concern for the group. To minimise fuel price volatility, it has hedged 52-57% of its fuel requirement for the rest of 2019 at average Brent hedge prices of US$61 to US$64 per barrel.
Trading in the group’s shares were suspended today. Prior to the suspension, the stock was trading 0.38% higher at RM2.63. Trading in its shares resume tomorrow.
