Capital A posts RM1.1bil net profit in 2Q

KUALA LUMPUR Capital A Bhd is confident of the aviation sector’s prospects moving forward, following a stellar turnaround in its second quarter ended June 30, 2023.

The group churned a net profit of RM1.12bil compared with a net loss of RM931.22mil in the same quarter a year ago, on the back of year-on-year revenue for the quarter that more than doubled to RM3.15bil.

Overall, its aviation segment reported an earnings before interest, taxes, depreciation and amortisation of RM404.7mil compared to RM151.5mil in the same period last year, backed by higher passengers carried and capacity.

“We now have a line of sight on the completion of our planes. As of today, we have successfully taken 175 aircraft out of storage, and expect to restore into service 180 by the end of the third quarter.

“Our target is to reinstate a total of 200 planes back into operations by year-end,” Capital A said in its financial statements uploaded to the Bursa Malaysia.

“In addition to fleet reactivation, we anticipate further upside from the current high yield environment. In the second quarter, fares remained 15% higher than pre-Covid levels in the same quarter of 2019 and we anticipate a pick up in the second half to peak in the fourth quarter,” it added.

The group said it is supported by the upward trajectory of ancillary revenue per passenger, which is projected to gain momentum to reach US$358mil (RM1.66bil) in the second half, up 27% compared to the same period pre-Covid, driven by strong new product initiatives and dynamic pricing.

It also expects costs to continue its downward trend moving forward from the consolidation of Asia Aviation Public Co Ltd, which would enable it to achieve cost efficiency in aircraft maintenance, staff and user charges.

“The group is on track with its expansion in the Asean region, with the imminent launch of AirAsia Cambodia expected to further contribute to our growth,” Capital A said.

Meanwhile, its maintenance, repair and overhaul (MRO) division called Asia Digital Engineering (ADE) is also aggressively expanding to Thailand, Indonesia and the Philippines with operations expected to commence by the end of this year.

“ADE has been proactively collaborating with airlines to expand its MRO services to countries where our airlines plan to operate. This strategic approach enables both businesses fostering mutual support for growth and operations,” Capital A said.

ADE reported a revenue of RM137.9mil in the second quarter which is an increase of 83% against the same quarter in 2022, as travel resumption and increased flights drove the demand for MRO services.

Moving forward into the second half of 2023, the group said it remains steadfast in leveraging the synergy of its businesses for continued growth and value.

“With all of the strategies put in place, the board expects the group to perform better than the previous year,” it said.