AirAsia posts a profit on lower fuel expenses, disposal gain

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KUALA LUMPUR (May 28): AirAsia Bhd returned to the black in the first quarter ended March 31, 2015 (1QFY15), after posting a loss in the last quarter.

The low-cost airline posted a 6.9% increase in net profit to RM149.33 million or 5.4 sen per share in 1QFY15 from RM139.72 million or 5 sen per share a year ago, as it benefited from lower fuel expenses and a gain on disposal of interest in AirAsia Expedia Travel.

AirAsia’s revenue fell by a marginal 0.4% to RM1.297 billion in 1QFY15, compared with RM1.302 billion in 1QFY14.

The airline attributed the lower quarterly revenue to average fare falling by 9% despite a 3% increase in passenger volume.

“This was partially contributed by the overall improvement in passenger volume from China,” it said.

Passenger volume from China was hampered last year due to Malaysia Airlines' flight MH370 tragedy.

For 2QFY15, AirAsia (fundamental: 0.2; valuation: 0.8) sees strong demand with average load factor forecast at 80%.

AirAsia also guided that the outlook for 2QFY15 financial performance should be seen in the context of the price of fuel.

“A lower fuel price has obvious benefits for the airline industry, but the lower prices have been partially offset by weaker currencies against the US dollar, across all Asean nations,” the group said.

“However, barring any unforeseen circumstances, the directors remain positive for the prospects of the group for 1QFY15 and the remainder of the year,” AirAsia added.

The counter closed one sen or 0.48% lower at RM2.08 per share today, with 15.44 million shares done, giving it a market capitalisation of RM5.82 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)