Capital A Berhad · MYX:CAPITALA
Capital A Berhad — AirAsia Berhad — Q2 2015 Earnings Presentation
21 slides from Capital A Berhad's earnings presentation, Aug 20, 2015
Slide 1: AirAsia Berhad 2Q15 Earnings Briefing
AIRASIA BERHAD 2Q15 EARNINGS BRIEFING 20 AUGUST 2015
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: 2Q15 Key Highlights - Malaysia
2Q15 KEY HIGHLIGHTS MALAYSIA • Revenue of RM1.32 bil (+1% YoY) due to 7% increase in pax volume despite the affect of non- marketing in Q1 which affected forward sales in Q2 • Strong load factor maintained at 80% whilst average fare down 10% YoY as fuel surcharge was removed in mid Q1 • Operating pr
Slide 4: 2Q15 Key Highlights - Malaysia unit costs and RASK
2Q15 KEY HIGHLIGHTS MALAYSIA • CASK of 11.88 sen (-11% YoY) on 18% drop in fuel expenses • CASK-ex Fuel of 6.65 sen (+2% YoY) on 25% increase in staff costs • RASK of 14.56 sen (-5% YoY; +1% QoQ), excluding fuel surcharge up 6% YoY • RASK-CASK spread increased 31% YoY RASK +1% QoQ RASK (ex-fuel surc
Slide 5: 2Q15 Key Highlights - Associates
2Q15 KEY HIGHLIGHTS ASSOCIATES • Thailand – Revenue up 26% due to 26% increase in pax volume, operating profit up 220%, profit after tax up 218% to THB374.19mil (USD11.10mil). Equity accounted RM18.1mil. RASK increased 5% and CASK decreased 10% • Indonesia – Revenue down 16% due to impact of non-mar
Slide 6: Ancillary Income per Pax +2%
ANCILLARY INCOME PER PAX +2% • Overall ancillary revenue increased 9% yoy, pushing ancillary income per pax up by 2% to RM46 • Highest growth was seen in online advertising (+733%), aircraft advertising (+149%) and AA Insure (+43%) • New contributors include duty free (RM2mil) and AA courier (RM3.6m
Slide 7: Ancillary Income - FX EZPay & BIG Loyalty
ANCILLARY INCOME - FX EZPAY & BIG LOYALTY • FX EZ Pay • 2Q15 – launched aggressive promotions and marketing campaigns to traveler segments with average of 500-600 cards issued per mth • 2H15 – Push sign up in travel segment, target online shoppers and introduction of new currencies. • Consumers are
Slide 8: Ancillary Income - Tune Money
ANCILLARY INCOME - TUNE MONEY • Launch the FX business starting 2016 • Allow international passengers travelling from T- BNK Malaysia, Indonesia and Singapore (Phase 1) and Thailand and Philippines (Phase 2) to fx order foreign currency while booking their tickets at airasia.com • Passengers get pre
Slide 9: Ancillary Income - Duty Free
ANCILLARY INCOME Rev Per Pax & Take Up Rate Trending - DUTY FREE 0.80 Rev Per Pax (RM) Take Up Rate (%) 0.50% 0.60 0.40% • Goal is to drive up ancillary income 0.30% 0.40 0.20% • Launched Big Duty Free website with 0.20 0.10% - 0.00% lowest price guaranteed Mar-15 Jun-15 Apr-15 Jul-15 Jan-15 Feb-15
Slide 10: Addressing Concerns - Net Gearing
ADDRESSING CONCERNS - NET GEARING Balance Sheet Target to June 2015 March 2015 achieve net RM million gearing of Total Debt Cash 12,369 1,838 13,144 1,600 1.81x by end of 2015 Net Debt 10,531 11,544 If without SLBs, Net Gearing 2.21 2.47 2.00x • Net gearing dropped by 0.26 points or 11% due to: • 6%
Slide 11: Addressing Concerns - Currency, Fuel, Fare and Ancillary
ADDRESSING CONCERNS - CURRENCY ii. Fare and Ancillary Mitigate currency risks through: i. Fuel Price • Mitigate via increasing average fare QoQ and • AA is unhedged for 2016. Below is the current hedge ancillary income per pax (target RM50) position for 2015: Average Fare Growth QoQ: Fuel 14% Surcha
Slide 12: Addressing Concerns - Amount Due from Associates
ADDRESSING CONCERNS - AMOUNT DUE FROM ASSOCIATES • Putting aside the effects of USDMYR, amount due actually reduced by USD163k between Q1 and Q2 • All lease payments are current USD'000 Converted to MYR'000 at Closing Rate During the Period MYR 2,755,371 MYR 2,816,133 MYR 2,455,331 Reduced by USD163
Slide 13: Addressing Concerns - Indonesia Capital & Equity
ADDRESSING CONCERNS - INDONESIA CAPITAL & EQUITY • Presented to the Transport Ministry in July a plan to sell perpetual bond but was advised to issue non-voting Redeemable and Convertible Preference Shares (“RCPS”) to address negative equity position ‒ Shareholder’s resolution is being sought and ap
Slide 14: Addressing Concerns - Indonesia Fleet & Network
ADDRESSING CONCERNS - INDONESIA FLEET & NETWORK • Right sizing by removing 4-5 aircraft from Jakarta, Bandung, Denpasar and Medan starting August • Due to floor price ruling, shift capacity to international where we are number one. Target 65% ‒ Terminate unprofitable routes including CGKKNO and DPSS
Slide 15: Addressing Concerns - Indonesia Forward Trends
ADDRESSING CONCERNS - INDONESIA FORWARD TRENDS 2014 (same period) 2015 76% 76% 62% 61% 26% 19% Ave Base Ave Base Ave Base 13% 12% 12% 7% 8% Fare Fare Fare Ave Base 5% +3% -7% +13% Fare +3% +36% +42% Jul Aug Sep Oct Nov Dec • RASK and ancillary income per pax expected to come in higher in 2H15 with a
Slide 16: Addressing Concerns - Philippines Capital & Equity
ADDRESSING CONCERNS - PHILIPPINES CAPITAL & EQUITY • Plan for USD50 million equity injection has been met with strong interest by existing shareholders. • As a result, on July 10th 2015 PAA board has approved to increase the authorized capital stock of the company to PHP5 billion (USD110 million) in
Slide 17: Addressing Concerns - Philippines Fleet & Network
ADDRESSING CONCERNS - PHILIPPINES FLEET & NETWORK • Re-fleeting on track to remove older planes — Target to sell 2 older Zest owned planes by year end — In discussion with third party lessors for early return of at minimum 2 older IAE engine lease planes by end of the year • All International flight
Slide 18: Addressing Concerns - Philippines Forward Trends
ADDRESSING CONCERNS - PHILIPPINES FORWARD TRENDS 2014 (same period) 2015 82% 67% 63% 56% 34% 26% 20% 21% 18% Ave Base Ave Base Ave Base 15% 13% 13% Fare Fare Fare Ave Base Ave Base -12% -15% -21% Fare -13% Fare -1% +11% Jul Aug Sep Oct Nov Dec • RASK expected to come in higher in 3Q2015 by approx 2-
Slide 19: Value Creation - Capacity Management
VALUE CREATION - CAPACITY MANAGEMENT • To date, AA closed 13 transactions of acft on SLB, of which 10 were executed in Q2 and 3 in Q3 End of Lease / Sale of Vintage Acft Net Acft for Cumulative A320ceo A320neo Lease Retirement (at 12 yrs) Growth Fleet -7 2015 5 -3 -5 166 (3 from Zest) 2016 5 4 -1 -1
Slide 20: Value Creation - Asia Aviation Capital
VALUE CREATION - ASIA AVIATON CAPITAL Quarter Ended: 30 June Apr - Jun 2015 Apr - Jun 2014 USD'000 Revenue 11,690 - Apr - Jun 2015 A Operational ratios Operating expenses: Total aircraft in the portfolio 6 - Staff costs (67) - Addition 13 - Aircraft operating lease expenses (10,428) - Operating leas
Slide 21: Value Creation - Madcience
VALUE CREATION - MADCIENCE • Is now an independent operations from AirAsia since Aug’15 • Currently working on these areas by end 2015: • Setting up a good data foundation to enable Customer Analytics & Reporting • Setting up unique Customer View to enable Insights generation and targeted marketing