Malaysia Airlines ‘slightly ahead of schedule’ in recovery: Azman

KUALA LUMPUR: Khazanah Nasional Bhd’s biggest loss-making investee company Malaysia Airlines Bhd (MAB) is “slightly” ahead of schedule of its recovery plan, while the issues of other loss-making companies under its portfolio have mostly been resolved.

Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar said last Friday that 28 months into the implementation of the recovery plan, the national carrier might be able to break even and be profitable by 2018.

“The aviation industry is uncertain but their money flow is recovering,” he said.

Khazanah committed RM6 billion as part of the recovery plan slated for a period of 60 months, according to Khazanah of which, more than RM5 billion has been spent thus far.

In October, MAB CEO Peter Bellew said there was no need for extra funding from its sole shareholder Khazanah as the targets were being met.

Some of the key milestones in 2016 were the appointment of Bellew to helm MAB, the formation of Malaysia Aviation Group and the establishment of the Malaysian Aviation Commission.

On issues at other loss-making companies in its portfolio, Azman said, most of them are being resolved. For example, the country’s sole semiconductor and wafer company Silterra Malaysia, saw positive earnings before interest, tax, depreciation and amortisation in 2016.

Azman “a few” of the companies and catalytic investments are yet to be profitable as they are in the developmental stage.”

“It’s important that we focus on the medium to long term (value creation) because the companies need this period of growth,” Azman said.

He said gains from Alibaba Group Holding Ltd, amounting to US$987.3 million (RM4.3 billion), have been seeded into 24 new technology investments, such as Garena, Aemulus and Blippar.

Of the 24 companies, 15 are direct investments and eight are investments in funds. Uber is an example of an indirect investment of Khazanah, which is yet to be profitable.