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Saturday, February 27, 2016

AAX swings to net profit in 4Q on improved operating performance

KUALA LUMPUR (Feb 26): AirAsia X Bhd (AAX), the long-haul, low-cost affiliate of AirAsia Bhd, swung back to a net profit of RM201.59 million or 5.9 sen per share in the fourth quarter ended Dec 31, 2015 (4QFY15), after eight quarters of losses since 4QFY13, on the back of improved operating profit which grew 8% year-on-year (y-o-y) to RM115 million, higher revenue and lower cost of 4% y-o-y.

It posted a net loss of RM168.53 million or 7.1 sen loss per share in 4QFY14.

Revenue came in higher at RM835.95 million in 4QFY15 compared with RM816.87 million a year ago.

AAX group chief executive officer (CEO) Datuk Kamarudin Meranun said its multi-phased turnaround plan introduced in 2015 had improved the airline’s cash position via rights issues, network plan, distribution platform and with aggressive marketing campaign.

"Our combined efforts stimulated travel demand in all of our core markets amid external challenges that were beyond our control such as currency volatility, irrational competition from industry peers waging price wars and overcapacity, MERS and Kathmandu’s earthquake,” he said in a statement today.

“Our balance sheet also strengthened with net gearing reduced to 1.8 times compared with 2.06 times in the same period last year," he added.

The improved quarterly results helped the airline narrow its net loss for the full financial year ended Dec 31, 2105 (FY15) to RM360.23 million from RM519.44 million in FY14.

Revenue rose 4.3% to RM3.06 billion in FY15 from RM2.94 billion in FY14 with revenue per available seat kilometre (RASK) increasing 10.3% to 13.21 sen from 11.97 sen.

Kamarudin said AAX is optimistic that it will achieve further improvement in the coming quarters with higher contribution from ancillary, cargo and better route performance from North Asia on the back of stronger marketing drive.

"We remain focused on striving for sustainable growth and retain AAX’s competitive edge in this challenging environment through the many strategic initiatives that are in place," he said.

“For 2016, the airline will remain vigilant with its expansion plans amid a challenging operating environment that is expected to persist with currency volatility, regulatory uncertainties and external factors," he added.

AAX CEO Benyamin Ismail said the airline has strengthened the leadership of its commercial function and have implemented new initiatives in revenue management, ancillary, marketing and distribution to capitalise on the stronger network it has consolidated.

"We expect these initiatives, coupled with cost reduction efforts, will push our earnings to greater heights in 2016. We are only halfway through the turnaround plan, we have more to do,” added Benyamin.

AAX fell one sen or 6.12% to close at 23 sen today for a market capitalisation of RM954.07 million.

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