Capital A Berhad · MYX:CAPITALA

Capital A Berhad — AirAsia Berhad — Q2 2006 Earnings Presentation

31 slides from Capital A Berhad's earnings presentation, Feb 24, 2006

  1. Slide 1: Now Everyone Can Fly – Second Quarter 2006 Results

    “Now Everyone Can Fly” Second Quarter 2006 Results 24th th February 2006

  2. Slide 2: Disclaimer

    Disclaimer Now Everyone Can Fly 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 c

  3. Slide 3: 1. Highlight & Events

    CONFIDENTIAL Now Everyone Can Fly 1. Highlight & Events

  4. Slide 4: Key Highlights

    Key Highlights Now Everyone Can Fly q Net Income of RM53.4 million – 20% growth YoY on the back of 26% revenue growth – 35% EBITDAR margin q Strong growth profile maintained – passenger numbers grew 19% YoY – average fare increased by 2% YoY q Thai­AirAsia – Thailand operations profitable, net incom

  5. Slide 5: Other Developments

    Other Developments Now Everyone Can Fly q Airbus A320 delivery – received first Airbus A320 on 8 December 2005 – smooth integration into fleet q Positive developments from “CrunchTime” – business turnaround now complete – two consecutive quarters of profitability q Aggressive marketing ­ launched 2

  6. Slide 6: Thai AirAsia New Shareholding Structure

    Thai­AirAsia New Shareholding Structure Now Everyone Can Fly Thai AirAsia 50% 49% 1% Asia Aviation Tassapon AirAsia Berhad Limited Bijleveld 51% 49% Sittichai ShinCorp Veerathummanoon q ShinCorp has reduced its 50% stake in TAA to 50% of Asia Aviation – complies with all Thai regulations and maintai

  7. Slide 7: Sitthichai Veerathummanoon

    Sitthichai Veerathummanoon ­ welcoming our new partner Now Everyone Can Fly q Over 14 years of business management experience q Extensive knowledge and experience in air logistics q Formerly MD of DHL (Thailand), Linguaphone and JobPilot q Bachelor of Accounting and holder of two MBA 6

  8. Slide 8: Constantly Expanding Route Network

    Constantly Expanding Route Network Now Everyone Can Fly Period Destinations Served Jan 2002 6 Jun 2003 11 Jun 2004 26 Jun 2005 52 Now 64 New Routes to be Launched Soon Medan ­ Penang Bangkok ­ Krabi Surabaya ­ Balikpapan 7

  9. Slide 9: Consistent passenger growth

    Consistent passenger growth Now Everyone Can Fly Passengers Flown by AirAsia Group (‘ (‘000) 000) 6,289 t h YoY gr ow 36% 3,991 2,839 2,927 1,481 611 291 M ar­2001 Jun­2002 Jun­2003 Jun­2004 Jun­05 1H2005 1H2006 è There is no stopping the LCC phenomenon 8

  10. Slide 10: Monthly Passenger Numbers

    Monthly Passenger Numbers Now Everyone Can Fly Monthly Passenger Numbers (AirAsia (AirAsia Group) 1000000 812492 800000 738915 628304 600000 400000 200000 0 Oct '05 Nov ' 05 Dec '05 è Consistent passenger growth 9

  11. Slide 11: Standardized New Fleet – Committed for Growth

    Standardized New Fleet – Committed for Growth Now Everyone Can Fly q Airbus Purchase agreement concluded 25th March 2005 q 100 aircraft commitment: 60 firm orders + 40 options q Dual type fleet transition, but will phase out Boeing 737 fleet sequentially q Estimated 12% reduction in direct operating

  12. Slide 12: Aggressive Marketing

    Aggressive Marketing Now Everyone Can Fly 2 million FREE seats to celebrate our 4th anniversary Rationale for this: q Load management ­ adding significant capacity & new routes q Cost recovery ­ fuel surcharge & administrative charges q Generate good PR ­ word of mouth is the best advertisement q Ne

  13. Slide 13: Our New Home = Low Cost Terminal

    Our New Home = Low Cost Terminal Now Everyone Can Fly Check­in Counters Baggage Conveyor Belts q Commencement of operations: 23 March 2006 q Initial relocation starting 9 March q Design capacity 10 million pax, potential upgrade to 15 million pax q Significant cost savings from lower rates & greater

  14. Slide 14: 2. Results Commentary

    CONFIDENTIAL Now Everyone Can Fly 2. Results Commentary

  15. Slide 15: Operational Statistics

    Operational Statistics Now Everyone Can Fly q Strong passenger growth – 19% growth q Capacity growth reflects new routes – 22% growth q Cost control – some rise YoY, but little changed from Q1FY06 – 2.42/ASK US cents, 14% rise YoY – 1.38/ASK US cents ex fuel, 35% rise YoY q Improving fares and yield

  16. Slide 16: Operational Statistics – Malaysia

    Operational Statistics – Malaysia Now Everyone Can Fly Operational Statistics Q2­2006 Q2­2005 ∆ (%) Average Load factor 76% 75% 1 ppt # Passengers 1,343,795 1,126,393 19% Average fare (RM) 156 153 2% RPK (mn) 1532 1230 25% ASK (mn) 2009 1645 22% Rev/RPK (US cents) 3.91 3.82 2% Cost/ASK (US cents) 2.

  17. Slide 17: Operational Statistics – Thailand

    Operational Statistics – Thailand Now Everyone Can Fly Operational Statistics Q2­2006 Q2­2005 ∆ (%) Average Load factor 81% 75% 6 ppt # Passengers 554,515 434,865 28% Average fare (RM) 126 115 10% Average fare (THB) 1369 1235 11% RPK (mn) 530 409 30% ASK (mn) 658 544 21% Rev/RPK (US cents) 3.60 3.28

  18. Slide 18: Operational Statistics – Indonesia

    Operational Statistics – Indonesia Now Everyone Can Fly Operational Statistics Q2­2006 Q1­2005 ∆ (%) Average Load factor 69% 72% # Passengers 281,401 172,655 6% Average fare (RM) 112 104 8% Average fare (IND) 295,051 274,819 7% RPK (mn) 296 199 49% ASK (mn) 427 278 54% Rev/RPK (US cents) 3.06 2.56 2

  19. Slide 19: Profitability – Malaysia

    Profitability – Malaysia Now Everyone Can Fly Margins (%) (RM ‘000) Q2­2006 Q2­2005 ∆ (%) Q2­06 Q2­05 Revenue 225,925 178,633 26% EBITDAR 78,414 67,844 16% 34.7% 38.0% EBIT 42,056 45,713 (8%) 18.6% 25.6% Net Income 53,376 44,362 20% 23.6% 24.8% q Profit margin reduced due to cost escalation – more h

  20. Slide 20: Profitability – Thailand

    Profitability – Thailand Now Everyone Can Fly Margins (%) (THB ‘000) Q2­2006 Q2­2005 ∆ (%) Q2­06 Q2­05 Revenue 783,345 546,662 43% EBITDAR 193,856 48,768 397% 24.7% 8.9% EBIT 87,906 (18,873) na 11.2% (3.5%) Net Income 109,616 (10,373) na 14.0% (1.9%) q Improved profit growth and margins due to:­ – i

  21. Slide 21: Ancillary Income Progress

    Ancillary Income Progress Now Everyone Can Fly AirAsia Ancillary Income % Rev enue AncillaryIncome%Revenue 16 8.0 14 12 7.0 Average=10% 10 6.0 8 6 5.0 4 2 4.0 0 Q1­05 Q2­05 Q3­05 Q4­05 Q1­06 Q2­06 AirAsia WestJet EasyJet Ryanair q Positive developments at “Crunctime”, (food & beverage unit) ­ AirAsi

  22. Slide 22: Robust cash generation

    Robust cash generation Now Everyone Can Fly Balance Sheet (RM millions) Cash from Operations (RM millions) Shareholder Equity Cash from Operations (Normalized) Net Cash Cash from Operations 1,026 953 965 113 89 337 265 ­91 0 2005 Q1­06 Q2­06 2005 2006 (ytd) è Debt levels reflect aircraft deposits 21

  23. Slide 23: 3. Cost Management

    CONFIDENTIAL Now Everyone Can Fly 3. Cost Management

  24. Slide 24: Cost Management

    Cost Management Now Everyone Can Fly Cost / ASK (US cents) Cost / ASK 3 .4 0 Non Fuel Cost 2 .9 0 2 .4 7 2 .4 1 2 .4 2 2 .3 5 2 .19 1.9 6 1.7 2 1.3 8 1.2 4 1.11 2002 2003 2004 2005 Q1­06 Q2­06 Malaysian Operations Superior cost containment despite fuel price impact 23

  25. Slide 25: Operating Expenses – 1H

    Operating Expenses – 1H Now Everyone Can Fly Operating Expenses % Revenue (RM ‘000) 1H­2006 1H­2005 1H­06 1H­05 Revenue 412,202 302,831 - Staff Cost (55,720) (33,939) 13.5% 11.2% - Fuel and Oil (166,396) (113,614) 40.4% 37.5% - User & Station Charges (23,827) (14,645) 5.8% 4.8% - Maintenance & Overh

  26. Slide 26: Cost / ASK – what changed from last year to this year?

    Cost / ASK – what changed from last year to this year? Now Everyone Can Fly 2.42 (2006) vs. 2.14 (2005) {13% cost increase} (US cents) Cost per Change Reasons ASK (%) Good Cost of aircraft 0.19 ­23.4 Less leased aircraft mix Maintenance & Overhaul 0.23 ­11.4 More heavy checks Fuel and Oil 1.11 10.1

  27. Slide 27: 6. Outlook

    CONFIDENTIAL Now Everyone Can Fly 6. Outlook

  28. Slide 28: Malaysia – going strong

    Malaysia – going strong Now Everyone Can Fly q Strong Growth Profile Expected to Continue – # aircraft now = 25 – budgeting ASK growth between 40 ­ 45% vs. FY2005 q Benefits of new low cost terminal should be evident in 4th quarter q Increased presence at JHB enjoying strong support – load factors a

  29. Slide 29: Thailand

    Thailand Now Everyone Can Fly q Strong Growth Profile Expected to Continue – # aircraft now = 9; expecting 11 by end FY2006 – budgeting ASK growth between 60­70% vs. FY2006 q Average fares and passenger numbers improving q Benefiting from increased business scale 28

  30. Slide 30: Indonesia

    Indonesia Now Everyone Can Fly q Strong demand growth expected to continue – # aircraft now = 4; expecting 7 by end FY2006 – budgeting capacity around 2000 million ASK q Will likely take more time & investment before reaching profitability – confident will follow Thai­AirAsia pattern q Fragmented an

  31. Slide 31: AirAsia - Concluding Remarks

    AirAsia ­ Concluding Remarks Now Everyone Can Fly q World’s lowest cost carrier q Industry leading customer service and innovative delivery q Disciplined and structured growth out to 2010 q Airports and bases plentiful; no shortage of new markets q 100 new aircraft facilitates growth to over 30m pax

AirAsia Berhad — Q2 2006 Earnings Presentation on 6ix