AirAsia in for better second quarter
The Star/Asia News NetworkPETALING JAYA, Malaysia--AirAsia is expected to turn in better second-quarter results due to lower fuel costs boosting operating margins, said analysts.
August 19, 2013, 12:02 am TWN
The analysts added that the budget carrier's strong operating statistics in the said quarter could bolster its results. AirAsia is expected to announce its second-quarter financial performance on Aug. 21.
“AirAsia's second-quarter earnings are expected to be within our estimates, with core earnings likely to inch higher 3 percent quarter-on-quarter (q-o-q) and 5 percent year-on-year (y-o-y) on the back of a revenue growth of 4 percent and 10 percent, respectively,” RHB Research Institute analyst Ahmad Maghfur Usman said.
He noted that the main highlight to watch out for was AirAsia's yields due to the emergence of Malindo Air in the domestic low-cost carrier space.
“We expect yields to start seeing pressure — dropping by 4 percent — although this would be offset by higher ancillary revenue per person, thus narrowing the drop in overall financial year (FY) 2013 yields to 2 percent.
“However, we expect the yield downside to be mitigated by higher associate profits and lower fuel costs, as jet fuel came in lower y-o-y and q-o-q by 7 percent and 10 percent, respectively,” Ahmad said.
RHB Research has maintained a “buy” call on AirAsia, with fair value intact at 3.94 ringgit (US$1.20).
For the full year, analysts expect AirAsia to post 885.2 million ringgit in earnings.
Affin Research analyst Sharifah Farah said AirAsia's second-quarter results “would likely continue to impress.”
She said that based on the said quarter's operating statistics, it expects AirAsia's second-quarter revenue to “come in stronger” than the 1.3 billion ringgit posted in the first quarter.
In the second quarter, Malaysia AirAsia (MAA) continued to register decent growth, carrying 5.5 million passengers, up 12.4 percent y-o-y, bringing the total number of passengers carried in the first half of 2013 to 10.7 million, up 9.8 percent y-o-y.
“At 9.8-percent passenger growth, this is within our FY13 passenger growth assumption of 12.4 percent, as we expect growth to come in stronger in second-half 2013 due to seasonality,” Affin said.
Thai AirAsia and Indonesia AirAsia also registered impressive performances in the second quarter.