AirAsia’s profit down 73 pct in second quarter

NET profit of AirAsia in the second quarter ending June 30 fell 72.9 percent year on year to 92.44 million ringgit ($21.70 million) due to the one-off deferred tax charge in Indonesia. Net profit of the previous corresponding period was 341.11 million ringgit.

This has dragged the net profit of the company in the first six month of the year to plunge by 37.52 percent to 792.44 million ringgit. Net profit of previous corresponding period was 623.55 million ringgit.

AirAsia’s revenue in the second quarter increased by 46.49 percent to 2.378 billion ringgit.

In a statement issued by AirAsia, it said the revenue and operating expenses increased in second quarter mainly due to consolidation activities caused by Indonesia AirAsia and Philippines AirAsia.

The plunge in profit of second quarter is mainly due to the one off deferred tax payment of 212 million ringgit which was offset by 43 million ringgit in current tax credits in IAA during the current quarter.

IAA joined the Amnesty programme where under the programme, IAA shall no longer be liable for any tax liability prior to 2016, whilst the existing deferred tax asset in IAA’s books prior to 2016 will also no longer be deductible against future profits.

Operating cash flow of AirAsia is now 419.30 million ringgit while as of March 31, 2017 the operating cash flow was 500.3 million ringgit. As of end of June, the company’s total debt stood as 9.8 billion ringgit.

IAA, an affiliated company of AirAsia where the latter holds 49 percent in equity, recorded a revenue of $26,079 in second quarter this year, an increase of 84 percent but incurred net loss.

AirAsia, which holds 49 percent equity in Japan Air Asia, has yet to launch its services in Japan. It has incurred a net loss of 42.20 million ringgit.

Looking ahead, the group is projected to achieve an average load factor of 88 percent in the third quarter of 2017. It is planning an additional 22 planes through a combination of finance and operating leases in the second half of the year in “one of the fastest pace of expansion in the last few years”, it said.

The company remains optimistic on its performance of the remaining two quarters of 2017 due to strong demand in most of the regions, stable fuel price and currency.

Thai AirAsia would enhance its internet sales on flights to China and India. The load factor in third quarter this year is expected to reach 85 percent. IAA currently focuses on domestic flights and load factor in third quarter is expected to be 86 percent.

The board of directors is positive on outlook for 2017 and expects a better sales performance than last year.