Capital A Berhad · MYX:CAPITALA
Capital A Berhad — AirAsia Berhad — Q2 2008 Earnings Presentation
21 slides from Capital A Berhad's earnings presentation, Aug 28, 2008
Slide 1: April-June Quarter 2008 Results
April-June Quarter 2008 Results 28 August 2008
Slide 2: Disclaimer
Disclaimer Information contained in our presentation is intended solely for your reference. 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 nor our advisors make any representation
Slide 3: Key Highlights for Apr-Jun Quarter
Key y Highlights g g for Apr-Jun p Quarter Delivered profit in a very tough business environment – Core operating profit of RM30 million with margins of 4.9% – Profit after tax of RM9 million with margins of 1.5% 26th consecutive quarter of profitability Lowest cost airline in the world at 3.5
Slide 4: Key Highlights for Apr-Jun Quarter
Key y Highlights g g for Apr-Jun p Quarter Contrarian C t i approach, h kkeeping i ththe growth th iintact t t – introduced 20 routes since the beginning of the year On-time performance of 89% year to date Airbus success storyy continued with deliveries to Thailand and Indonesia – higher relia
Slide 5: Consistent Passenger Growth
Consistent Passenger g Growth Passengers Flown by AirAsia and AirAsia Associates (‘000) 15 ,3 3 5 12 ,10 7 7 ,3 7 0 4 ,8 6 8 4 ,4 2 7 3 ,7 3 8 2 ,0 9 4 1,0 4 1 2002 2003 2004 2005 2006 2007 1H - 2 0 0 7 1H - 2 0 0 8 Benefiting from slower economic growth – people going for better value proposition
Slide 6: Results Commentary
Results Commentary
Slide 7: Growth through Aggressive Pricing
Growth through Aggressive Pricing Average Fare (RM) Load Factor % 2008 2008 198 2007 2007 80.7% 170 76.4% A p r - Jun A p r - Jun ¾ Better yield management ¾ Significant capacity added over the period (33% ASK growth) ¾ Higher international flight bias ¾ In line with management expectations 6
Slide 8: Consistent Yield Expansion
Consistent Yield Expansion p Rev / ASK (US ¢) 13% 4.19 ¾ 16% Higher average fare 3.70 ¾ Higher ancillary income contribution Apr-Jun 2007 Apr-Jun 2008 Cost / ASK ((US ¢) 10% 3.57 3.24 ¾ Unit Fuel price climbed by 65% to USD143/barrel Apr-Jun 2007 Apr-Jun 2008 Co e O Core Operating e ati Profit P ofi
Slide 9: Cost / ASK – year on year Comparison
Cost / ASK – year on year Comparison Cost Breakdown Apr-Jun Apr-Jun ∆ (%) (US cents / ASK) 2008 2007 Reason Staff Costs 0.38 0.32 19% Wage inflation Fuel and Oil 2.43 1.57 55% g Higher jet j fuel price p User & Station Charges 0.00 0.23 n/a Credits from MAHB granted Maintenance and Overhaul 0.13 0.4
Slide 10: Driving Growth from Ancillary Income
Driving Growth from Ancillary Income Apr-Jun Apr-Jun ∆% 2008 2007 Ancillary Income (RM million) 50.3 31.4 60% Passenger Spend S ((RM / pax)) 17.8 13.3 34% % % Revenue 8.3% 7.3% 1.0 ppt Driving promotions harder – to increase penetration rate – packaged products to increase yields Checked baggage
Slide 11: Borrowings and Gearing
Borrowings g and Gearing g Net Debt (RM million) Net Gearing (Net Debt / Equity) 4,312 1.90 3,640 3,272 1.61 1.56 1,959 1.18 Jun-07 Dec-08 M ar-08 Jun-08 Jun-07 Jun 07 Dec-07 Dec 07 M ar ar-08 08 Jun-08 Jun 08 10
Slide 12: MAHB
MAHB Reached eac ed an a amicable a cab e so solution u o with MAHB Paid the agreed amount of settlement Received credits for the disputed amount – amount has been adjusted to income statement Working with the Government to make LCC travel a bigger success – differentiate charges between mai
Slide 13: Updates on Associates
Updates on Associates
Slide 14: Updates on Associates
Updates p on Associates Thai updates – 19% passenger growth with 20% average fare growth YoY – posted a loss of THB446 million (RM44.2 million), our portion of losses is THB219 million (RM21 (RM21.77 million) – currently operating with 5 Airbus A320 aircraft – better yields due to weakening compet
Slide 15: AirAsia X: Dark horse that adds Value
AirAsia X: Dark horse that adds Value New Airbus A330 aircraft deployment schedule – aircraft #2: 2 November 2008 – aircraft #3: 5 March 2009 Expanding routes to Australia – Kuala Lumpur to Perth (2 November) – Kuala Lumpur to Melbourne (12 November) New routes to be launched in 2009 – London
Slide 16: Summary
Summary y Challenging outlook but AirAsia will be profitable – innovation i ti andd ffocus on quality lit iis kkey tto survival i l – focus on low fares and marketing Ancillary A ill IIncome – new products provide huge upside Most M comprehensive h i route network k iin A Asia i – competitors
Slide 17: Appendix
Appendix Airline Of The Year
Slide 18: Financial Data – Second Quarter
Financial Data – Second Quarter Quarter Ended: 30 June Apr-Jun p 2008 Apr-Jun p 2007 ∆ ((%)) RM'000 Ticket Sales 558,020 400,726 39% Ancillary Income 50,332 31,428 60% Revenue 608 352 608,352 432 154 432,154 41% Core Operating Profit 29 984 29,984 29 426 29,426 2% Profit After Tax 9,418 185,050 -95%
Slide 19: Operating Data – Second Quarter
Operating p g Data – Second Quarter Quarter Ended: 30 June Apr-Jun 2008 Apr-Jun 2007 ∆ (%) Passengers Carried 2,822,612 2,359,553 20% ASK (million) 4 514 4,514 3 402 3,402 33% RPK (million) 3,286 2,745 20% Seat Load Factor 76.4% 80.7% -4.3 ppt pp Average Fare (RM) 198 170 16% Rev / ASK (sen) 13.48 1
Slide 20: Operating Data – Second Quarter
Operating p g Data – Second Quarter Quarter Ended: 30 June Apr-Jun 2008 Apr-Jun 2007 ∆ (%) Average fare (RM) 197.7 169.8 16% Ancillary Income / pax (RM) 17.8 13.3 34% Unit Revenue / pax (RM) 215.5 183.2 18% Fuel consumed ( barrels) 784,636 620,026 27% Unit fuel price ($/barrel) 142.5 86.2 65% Averag
Slide 21: Fleet Composition
Fleet Composition p Operational Aircraft Jun 2008 Now (Aug) count Malaysia 44 47 Thailand 17 15 I d Indonesia i 11 12 Group Total 72 74 Aircraft Type # Airbus A320 39 48 #BBoeing i 737 737-300 300 33 26 23