AirAsia Q4 net profit falls 19%

PETALING JAYA (Feb 27, 2014): AirAsia Bhd's net profit for the fourth quarter ended Dec 31, 2013 (Q4) fell 19% to RM245.36 million from RM303.42 million due to unrealised forex losses on US dollar-denominated borrowings and lower revenue.
Revenue was 0.3% lower at RM1.35 billion compared with RM1.36 billion, as average fare fell 18% at RM158 as compared with RM192 achieved in Q412.
Operating profit for the quarter was marginally lower at RM315 million for the quarter compared to RM320 million for the same period in 2012.
For the full year period, its net profit dropped 54% to RM364.07 million from RM789.61 million on higher foreign exchange losses. FY12 also saw a RM118.6 million gain on the disposal of the 4% equity interest in Thai AirAsia.
Revenue rose 5% to RM5.19 billion from RM4.95 billion, supported by an 11% growth in passenger volume while the average fare was 10% lower at RM166 compared with RM184 in FY12. Ancillary income per passenger year-on-year showed an increase of 5% in FY13.
Commenting on the outlook, AirAsia's group CEO Tan Sri Tony Fernandes said it will continue to focus on driving cost down by 7.5%.
"We have already achieved 2.5% in cost reduction in two months and will increase non-fare revenues. Despite seeing signs of competitors being rational by reducing capacity on loss making routes, we cannot take it for granted and the company needs to continue to be creative in driving margins up."
It will now be focusing on capacity management by keeping a young fleet and selling its older aircraft to capitalise on the residual value to strengthen cashflow.
"We have deferred seven aircrafts in 2014 and 12 in 2015 to later years with intention to swap those aircraft with the new fuel efficient A320 neo.
"The outlook for 2014 is strong as we have set targets for ourselves in ensuring the Company remains lean through various cost initiatives. Some of the cost savings will be seen from operational synergies between AirAsia and AirAsia X, headcount reduction as the company looks at aggressively focusing on automation at current LCCT and KLIA2 when it is completed among other significant cost initiatives"
He said the ancillary segment plays a big part in its strategy to drive load factors up as well as revenue, committing to achieve RM50 of ancillary income per person.