Capital A Berhad · MYX:CAPITALA
Capital A Berhad — AirAsia Berhad — Q3 2007 Earnings Presentation
35 slides from Capital A Berhad's earnings presentation, May 23, 2007
Slide 1: Third Quarter 2007 Results
Third Quarter 2007 Results 23 May 2007
Slide 2: Disclaimer
Disclaimer Information contained in our presentation is intended solely for your personal reference and is strictly confidential. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning the company. Neither we no
Slide 3: Delivering Growth, Delivering Profits
Delivering Growth, Delivering Profits Rev enue (RM million) 396 Profit Margins 53% 32.1% 259 EBITDAR 23.8% Q3-06 Q3-07 18.4% Pret ax Profit EBIT (RM million) 43 10.9% 193% 9.9% 5.7% Pretax Profit 15 Q3-06 Q3-07 Q3-06 Q3-07 2
Slide 4: Key Highlights of Third Quarter
Key Highlights of Third Quarter Profit before tax of RM43.1 million – pretax profit margin of 10.9% – lowest cost airline in the world 2.91 US¢ / ASK Robust disciplined growth – fleet size rose from 49 to 52 (end of second quarter) – capacity growth of 40% and passenger growth of 39% YoY – load
Slide 5: Growth, Growth, Growth
Growth, Growth, Growth Passengers Flown by AirAsia Group (‘000) Y oY h wt gr o 10,246 % 9,312 56 Q3 3460 6,289 6,522 Q3 2532 1H 2,839 6785 1,481 1H 611 3991 291 M ar-2001 Jun-2002 Jun-2003 Jun-2004 Jun-05 Jun-06 9mth-2006 9mth-2007 Î There is no stopping the LCC phenomenon 4
Slide 6: Fleet Status
Fleet Status Net Fleet Size at year end Current Fleet Composition Indonesia Airbus A320 Thailand 14 Boeing 737 Malaysia 7 8 19 12 13 19 34 39 33 33 Q3-FY2007 FY2007 FY2008 5
Slide 7: Unmatched Route Network
Unmatched Route Network Period Routes Served Jan 2002 6 Jun 2003 11 Jun 2004 26 Jun 2005 52 Jun 2006 65 NOW 75 Latest Routes Bangkok – Langkawi Upcoming Routes KL – Shenzhen Bangkok – Shenzhen 6
Slide 8: Results Commentary
Results Commentary airasia.com
Slide 9: Growth through Aggressive Pricing
Growth through Aggressive Pricing Average Fare (RM) Load Factor (%) 2007 2006 190 183 83% 168 171 82% 158 156 80% 79% 77% 76% 70% Q1- Q2- Q3- Q4- Q1- Q2- Q3- Qua r t e r 1 Qua r t e r 2 Qua r t e r 3 06 06 06 06 07 07 07 Low fares AirAsia’s + High load factor = Strong Profitable Strategy Growth + Lo
Slide 10: Profitability – 3Q FY2007 vs. 3Q FY2006
Profitability – 3Q FY2007 vs. 3Q FY2006 Rev / ASK (US ¢) 17% 3.52 Pretax Income (RM million) 3.02 43.1 193% Q3-06 Q3-07 Cost / ASK (US ¢) 6% 2.91 14.7 2.74 Q3-06 Q3-07 Q3-06 Q3-07 9
Slide 11: Cost / ASK – what changed from last year to this year?
Cost / ASK – what changed from last year to this year? Cost Breakdown (US cents / ASK) Q3 2007 Q3 2006 ∆ (%) Reason Staff Costs 0.34 0.34 0% Opening of new bases Fuel and Oil 1.44 1.28 13% Higher fuel price User & Station Charges 0.25 0.18 37% More international route Maintenance and Overhaul 0.30 0
Slide 12: Outlook on Cost Reduction
Outlook on Cost Reduction Airport charges – new airport structure will be announced by Government soon – growth incentive scheme (high growth airline will be rewarded) – passenger service charges to be lowered at the LCCT [Current charges: International = RM35, Domestic = RM6] – will help to make
Slide 13: Year on Year Comparison (Malaysia)
Year on Year Comparison (Malaysia) Operating Expenses % Revenue 9-mth 2007 9-mth 2006 (RM ‘000) 9mth-07 9mth-06 Revenue 1,171,108 744,383 − Staff Cost (109,584) (84,584) 9.4% 11.4% − Fuel and Oil (516,321) (304,952) 44.1% 41.0% − User & Station Charges (71,775) (39,354) 6.1% 5.3% − Maintenance & Ove
Slide 14: Driving Growth from Ancillary Income
Driving Growth from Ancillary Income Ancillary % Revenue 0.4 ppt 6.5% 6.1% Ancillary Income Pax Spend (RM/pax) (RM '000) 20% 12.0 66% 2 5 ,9 2 4 Q3-06 Q3-07 10.0 15 ,6 5 4 Q3-06 Q3-07 Q3-06 Q3-07 13
Slide 15: Associate Development
Associate Development airasia.com
Slide 16: Operational Statistics – Thailand
Operational Statistics – Thailand Strong passenger growth – 31% YoY growth Steady cost despite higher fuel prices – 143/ASK THB, constant YoY – 78/ASK THB ex fuel, constant YoY Steady fares and yields despite challenging operating environment – average fare THB1632, constant YoY Strong perfo
Slide 17: Thailand Updates
Thailand Updates Political situation – Southern Thai is experiencing continuing unrest – prevailing political uncertainty reducing number of foreign tourists – foreign tourist are the highest yielding passengers Foreign ownership issue soon to be resolved – Thai individuals express interest to a
Slide 18: Operational Statistics – Indonesia
Operational Statistics – Indonesia Turbulent quarter – Jakarta floods – aircraft crashes dented sentiment for travel Steady passenger growth – 40% YoY growth Cost higher due to fuel and lower aircraft utilization – 3.24 /ASK US cents, 7% increase YoY – 1.39/ASK US cents ex fuel, 5% improvement
Slide 19: Indonesia Updates
Indonesia Updates Aircraft crashes in Indonesia has dented sentiment to travel – demand for travel muted since crash (temporary, should revert to normal soon) – short term negative, long term positive Low aircraft reliabilility in Indonesia – older Airbus 737-300 in fleet – lower on time perform
Slide 20: Group Consolidated (Proforma)
Group Consolidated (Proforma) 100% Malaysia + 49% Thailand and 49% Indonesia figures in RM'000 Quarter 1 Quarter 2 Quarter 3 9-months Ticket Sales 407,218 502,809 462,701 1,372,728 Ancillary Income 28,660 33,181 31,192 93,033 Total Revenues 435,878 535,989 493,893 1,465,761 EBITDAR 81,396 192,775 13
Slide 21: Robust Cash Generation
Robust Cash Generation Cash from Operations (RM millions) Net Cash Increase (RM millions) 12 3 100 78 282 294 210 145 34 2006 Q1-07 Q2-07 Q3-07 2006 Q1-2007 Q2-2007 Q3-2007 20
Slide 22: Solid Balance Sheet
Solid Balance Sheet Net Debt (RM million) Net Gearing (Net Debt / Equity) 1.05 1.03 1,541 0.99 1,396 0.77 1,077 787 2006 Q1-2007 Q2-2007 Q3-2007 2006 Q1-2007 Q2-2007 Q3-2007 21
Slide 23: Recent Developments
Recent Developments airasia.com
Slide 24: Latest Products – the Power of AirAsia
Latest Products – the Power of AirAsia Xpress Boarding – ability to board aircraft first and choose a seat of your liking – RM20/pax – revenue generator, zero cost – launched on 15 May 2007 – RM100k sales since launch Web check-in – ability to check in at home / office – saves cost & enhances cu
Slide 25: Upcoming Initiatives
Upcoming Initiatives Self Check-in counters – passenger self check-in at the airport – reduces queue and saves time – cost saving initiative Overbooking – overbooking on some flights – strict procedures to avoid bumping people from flight – opportunity to enhance load factor and yields 24
Slide 26: Building a Global Brand: AT&T Williams Sponsorship
Building a Global Brand: AT&T Williams Sponsorship Bringing ‘Malaysia AirAsia’ to the F1 world
Slide 27: Updates on AirAsia Long Haul
Updates on AirAsia Long Haul Moscow Stansted Prague Sapporo Shenyang Dalian Tok Tianj Seo Xian Cheon yo Hangzh in ul Osaka Islamabad Pusgju Lahore Chengdu ou Ning an Fukuoka Kara Chongg bo Cairo New Sharjah chi qing Xiamen Delhi Jeddah Mum Hyderab bai Go ad Kunming a Bangalore KUALA LUMPUR Brisbane
Slide 28: AirAsia - Concluding Remarks
AirAsia - Concluding Remarks World’s lowest cost carrier LCC is now a way of life in Asia Government supports the LCC Airbus improves reliability and performance Aircraft order secures growth pipeline until 2013 AirAsia Academy secures quality skilled manpower requirements 27
Slide 29: Appendix
Appendix airasia.com
Slide 30: Operational Statistics – Malaysia
Operational Statistics – Malaysia Operational Statistics Q3 -2007 Q3 -2006 ∆ (%) (restated) Average Load factor 77% 80% -3 ppt # Passengers 2,160,360 1,559,794 39% Average fare (RM) 171 156 10% RPK (mn) 2,461 1,833 34% ASK (mn) 3,215 2,296 40% Rev/ASK (US cents) 3.52 3.02 17% Cost/ASK (US cents) 2.9
Slide 31: Profitability – Malaysia
Profitability – Malaysia Q3-2006 Margins (%) (RM ‘000) Q3-2007 ∆ (%) (restated) Q3-07 Q3-06 Ticket Sales 370,256 242,951 52% Ancillary Income 25,924 15,654 66% Revenue 396,179 258,605 53% EBITDAR 127,004 61,434 107% 32.1% 23.8% EBIT 72,834 25,506 186% 18.4% 9.9% Pretax Profit 43,072 14,694 193% 10.9
Slide 32: Operational Statistics – Thailand
Operational Statistics – Thailand Operational Statistics Q3 -2007 Q3 -2006 ∆ (%) (restated) Average Load factor 78% 82% -4 ppt # Passengers 863,682 658,672 31% Average fare (RM) 168 155 8% Average fare (THB) 1632 1633 0% RPK (mn) 768 613 25% ASK (mn) 989 751 31% Rev/ASK (THB) 149 148 1% Rev/ASK (US
Slide 33: Profitability – Thailand
Profitability – Thailand Q3 -2006 Margins (%) (THB ‘000) Q3 -2007 (restated) Q3-07 Q3-06 Ticket Sales 1,409,715 1,075,418 Ancillary Income 59,338 36,002 Revenue 1,469,054 1,111,419 EBITDAR 207,982 170,386 14.2% 15.3% EBIT 56,903 45,702 3.9% 4.1% Net Income 59,591 41,717 4.1% 3.8% Profit margin imp
Slide 34: Operational Statistics – Indonesia
Operational Statistics – Indonesia Operational Statistics Q3 -2007 Q3 -2006 ∆ (%) (restated) Average Load factor 78% 74% 4ppt # Passengers 439,358 286,325 54% Average fare (RM) 100 115 -13% Average fare (IDR) 259,833 286,325 -9% RPK (mn) 457 329 39% ASK (mn) 588 446 32% Rev/ASK (IDR) 215 219 -2% Rev
Slide 35: Profitability – Indonesia
Profitability – Indonesia Q3 -2006 Margins (%) (IDR million) Q3 -2007 (restated) Q3-07 Q3-06 Ticket Sales 114,160 89,648 Ancillary Income 12,122 8,072 Revenue 126,282 97,720 EBITDAR (25,849) (29,347) -20% -30% EBIT (46,671) (44,480) -37% 46% Net Income (49,249) (44,607) -39% 46% Turbulent period l