Forex pushes THAI net loss to B1.82bn

Thai Airways International Plc (THAI) yesterday reported a net loss of 1.82 billion baht in the third quarter incurred from asset impairment and foreign exchange loss.

“THAI and its subsidiaries had one-time expenses of 537 million baht and impairment loss of assets and aircraft of 1.5 billion,” said the company in its filing to the Stock Exchange of Thailand. “In addition, the foreign exchange loss was 829 million baht.”

The company lost 14% more year-onyear from a 1.6-billion-baht contraction in last year’s third quarter.

Loss per share was 0.84 satang per share, 15.1% higher than last year’s 0.73 satang per share.

THAI reported a net loss of 5.2 billion baht in the second quarter. For the first half, the flag carrier reported a net loss of 2 billion baht compared with a profit of 3 billion year-on-year.

The combined operating profit of THAI and its subsidiaries was 739 million baht in the third quarter, up from a loss of 836 million year-on-year.

Total revenue was 47 billion baht, up 6.3% year-on-year, because of more passengers and excess baggage revenue.

Total expenses amounted to 46.2 billion baht, up 2.7% year-on-year and attributed to higher fuel expenses.

“The aviation industry in the fourth quarter is expected to keep growing as the global economy continues to recover,” said the company.

A rebound in the labour market drove private consumption in many regions, while improved global trade and fiscal stimulus measures implemented by major economies were cited by THAI as factors for the outlook.

Oil prices in the fourth quarter are expected to rise slightly but remain low, said THAI.

“The removal of the red flag on Oct 6 should be beneficial for the industry and tourism,” the statement said. “However, competition between airlines is likely to be more intense, both through the opening of new routes and shortages of aviation personnel, such as pilots, flight attendants, engineers and technicians.”

Siam Tiyanont, an analyst at Philip Securities Thailand, said THAI’s operating profit improved from preceding quarters, but the hefty net loss was a result of foreign exchange losses in obtaining loans in euros and yen to buy aeroplanes.

Domestic flight sales should benefit from the government’s shopping tax break, he said. If THAI does not record a substantial rise in special items this quarter, there could be a turnaround from the incurred net loss, said Mr Siam.

Parin Kitchatornpitak, an analyst from KGI Securities, said THAI’s operating result for the third quarter was above market expectations, especially the operating margin.

THAI shares closed on the SET yesterday at 17.20 baht, down 30 satang, in trade worth 103 million baht.