MAS turnaround bid hit by RM375m loss
The losses came about despite despite a 12.4% improvement in revenue to RM3.91 billion from the RM3.47 billion it made in the corresponding quarter last year.
by Prem Kumar Panjamorthy, FMT
Despite optimism for improvements this year, national carrier Malaysian Airline System Bhd (MAS) reported a loss of RM375.44 million for its third-quarter (3Q) ended Sept 30.
Earnings per share showed a loss of 2.25 sen, compared to 0.52 sen previously. The losses were made despite a 12.4% improvement in revenue to RM3.91 billion from the RM3.47 billion it made in the corresponding quarter last year, in which it posted a RM37.08 million net profit.
For the cumulative nine months, MAS’ net loss widened to RM830.25 million from RM483.96 million previously. Revenue for the period improved to RM11.22 billion from RM9.89 billion in 2012.
The loss was reported late yesterday when MAS stocks closed unchanged at 35 sen, but strong trading movements are expected today.
The loss, which went against market expectations, is an indication that the worst is not over for MAS, which is undergoing a comprehensive turnaround plan that is scheduled to bring the company back into the black by the end of 2014. This goal is expected to be deferred for the third time.
Last week, analysts covering the national carrier had expressed confidence that MAS would break even in the 3Q. Maybank Investment Bank Bhd expected the airline to report a RM17 million net profit on the back of seasonally strong 3Q and a better load factor.
The airline’s 3Q load factor stood at 84.8% — a historic peak for the 41-year-old carrier.
MAS said its operating expenditure in the last quarter was higher by 16% compared to the same quarter last year due to higher fuel and non-fuel variable costs, which rose in line with capacity increase and the weakening of the ringgit against the US dollar.
“Fuel and non-fuel costs for the airline increased by 16%. The increase in operating expenditure is also attributed to a one-off cost incurred for redelivery of aircraft.
“In addition, the group intensified its advertising and promotional activities amid intense competition as part of its long-term strategy to continuously strengthen presence in key markets,” MAS said in a filing to Bursa Malaysia yesterday.
Despite the loss, the carrier said its cash position remains strong at RM5.4 billion.
MAS said its operating revenue improved 13% to RM3.78 billion compared to the same quarter last year due to an increase in seat factor by 10.3 percentage points to 84.8%, on the back of a 20% increase in capacity.
