Tuesday, August 23, 2011

MAS 1H2011 net loss widens to RM769m on higher fuel cost

KUALA LUMPUR: MALAYSIAN AIRLINE SYSTEM BHD []'s net loss for the second quarter ended June 30, 2011 narrowed to RM526.68 million from net loss RM534.73 million, including derivative loss of RM56 million, on the back of revenue RM3.48 billion.

Loss per share was 15.76 sen while net assets per share was 84 sen.

However, for the six months ended June 30, MAS' net loss widened substantially to RM769.02 million from net loss RM224.68 million in 2010, despite posting higher revenue of RM6.68 billion, impacted adversely by higher fuel costs.

Reviewing its performance, MAS said on Tuesday, Aug 23 that it recorded an operating loss of RM413 million year-on-year in 2Q ended June 30 compared to RM286 million loss a year earlier, due mainly to higher fuel cost.

On its revenue growth for the quarter under review, MAS said this was due to a 12% growth in passenger load (in terms of passenger revenue kilometers) at the back of 10% capacity growth, improved seat factor by 1.5 percentage point to 75.5% and 1% improvement in passenger yield (average revenue per passenger kilometer).

Total expenditure, however increased by 11.4% or RM399 million to RM3.89 billion mainly due to increase in fuel cost by RM448 million as the total fuel cost increased by 41% over the same period last year, it said.

Meanwhile, non-fuel cost was lower by 2% or RM48 million than the same quarter last year, it said.

On its current year prospects, MAS said that in response to the tough operating environment, the carrier is moderating its short-term capacity growth.

The airline said its management team will have a serious review of its current network moving forward, and ''adjust deployed capacity accordingly, adding that it was currently executing the return of two B747-200 freighters, one B747-400 and three B737-400s by end September 2011.

MAS said it would also continue to enhance its yield performance through successful front cabin initiatives, implementation of fuel surcharges and improvement of its yield/revenue management.

'These measures are expected to yield some benefits in the second half 2011 but would not be adequate to offset the impact of high jet fuel price.

'We do not expect to make a profit for the second half of 2011 but given the abovementioned intiatives, we anticipate that the extent of losses would be less severe than the first half of 2011,' it said.


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