Capital A Berhad · MYX:CAPITALA
Capital A Berhad — AirAsia Berhad — Q1 2010 Earnings Presentation
35 slides from Capital A Berhad's earnings presentation, May 31, 2010
Slide 1: First Quarter 2010 Results
First Quarter 2010 Results 31 May 2010
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: Snapshot - 1st Quarter 2010
SNAPSHOT - 1st Quarter 2010 AirAsia Group PROFITABLE Strong top line growth in Malaysia Revenue up to RM878 million from RM797 million Increased traffic growth of 17.1% y-o-yy of 3.7 million passengers Profit after tax of RM224 million, up 10% y-o-y y Deposits, cash and bank balances increased to RM
Slide 4: Financial Results - Malaysia
Financial Results - Malaysia Year Ended: 31 March 2010 Change 1Q2010 1Q2009 RM'000 unless otherwise stated y-o-y Revenue 878,041 797,131 10% EBITDAR 323,516 389,956 -17% Lease of Aircraft (21,832) (27,650) 21% EBITDA 301,684 362,305 -17% EBIT 186,255 264,142 -29% Profit before tax 256,187 124,118 10
Slide 5: Revenue Breakdown - Malaysia
Revenue Breakdown - Malaysia Change 1Q2010 1Q2009 y-o-y RM’000 Revenue Ticket Sales 632,214 622,930 2% Ancillary Income 140,278 91,248 54% Other Operating Income * 101,549 82,953 22% Total Revenue 878,041 797,131 10% * Inclusive of aircraft lease income Tickets sales, ancillary income and other oper
Slide 6: Operating Statistics - Malaysia
Operating Statistics - Malaysia Change Year Ended: 31 March 2010 1Q2010 1Q2009 y-o-y Passenger Carried 3,685,389 3,147,609 17% Higher passenger and capacity volumes show signs Capacity 5,016,780 4,515,120 11% of recovering industry Load Factor 74% 70% 4 ppt supported by aggressive marketing ASK (mil
Slide 7: Capacity Growth & Load Factor - Malaysia
Capacity Growth & Load Factor - Malaysia ∞ Succesful revenue management despite higher capacity Improvement in travel demand Consistent upward trend Market recovery from 2009 13.7% growth in additional capacity y-o-y Load factor increased by 4ppt y-o-y Increased frequencies on trunk routes 6
Slide 8: Financial Results - Thailand
Financial Results - Thailand Year Ended: 31 March 2010 Change 1Q2010 1Q2009 THB'000 unless otherwise stated y-o-y Revenue 3,108,336 2,395,836 30% EBITDAR 983,096 756,142 30% EBITDA 482,583 330,896 46% EBIT 451,104 300,263 50% Profit after tax 622,862 297,633 109% Profit after Tax Margin 20% 12.4% 7.
Slide 9: Passenger and Ancillary Revenue - Thailand
Passenger and Ancillary Revenue - Thailand Change 1Q2010 1Q2009 y-o-y THB’000 Revenue Ticket Sales 2,665,301 2,173,866 22% Ancillary Income 405,644 217,077 87% Other operating income 37,391 4,893 664% Total Revenue 3,108,336 2,395,836 30% All across the board increase in revenue Passenger ticket sal
Slide 10: Operating Statistics - Thailand
Operating Statistics - Thailand Change Year Ended: 31 March 2010 1Q2010 1Q2009 y-o-y Passenger Carried 1,481,111 1,186,098 25% 25% increase in passenger carried with only 2% decrease Capacity 1,836,101 1,557,624 18% in average fare Load Factor 81% 76% 5 ppt ASK (million) 1,914 1,432 34% Improved loa
Slide 11: Capacity Growth & Load Factor - Thailand
Capacity Growth & Load Factor - Thailand ∞ Demand outpacing capacity and growth Thailand is stronger and resilient Load factor highest in 2 years in 1Q10 More frequencies added into existing domestic routes and higher yielding international routes Thailand remains resilient in Q210 despite political
Slide 12: Financial Results - Indonesia
Financial Results - Indonesia Year Ended: 31 March 2010 Change 1Q2010 1Q2009 IDR‘million unless otherwise stated y-o-y Revenue 528,355 384,664 37% EBITDAR 107,495 70,021 54% EBITDA (7,881) (30,652) 74% EBIT (11,163) (32,652) 65% Profit / (loss) after tax 4,640 (64,634) 107% Profit / (loss) after tax
Slide 13: Passenger and Ancillary Revenue - Indonesia
Passenger and Ancillary Revenue - Indonesia Change 1Q2010 1Q2009 y-o-y IDR ‘million Revenue Ticket Sales 443,574 332,067 34% Ancillary Income 86,359 53,013 63% Other operating income (1,578) (416) -279% Total Revenue 528,355 384,664 37% 53% increase y-o-yy in ticket sales despite heavy domestic comp
Slide 14: Operating Statistics - Indonesia
Operating Statistics - Indonesia Change Year Ended: 31 March 2010 1Q2010 1Q2009 Strong ticket sales in-line with y-o-y 35% passenger growth y-o-y Passenger Carried 893,381 662,483 35% Capacity 1,234,492 979,632 26% Lower average fare of 1% Load Factor 72% 68% 4 ppt was offset with increase ancillary
Slide 15: Passenger Growth & Load Factor - Indonesia
Passenger Growth & Load Factor - Indonesia ∞ Indonesia will be a catalyst for further growth with new Airbus fleets Challenging environment Strong international presence Successful realignment of strategy Growth of 42% y-o-y due to longer from domestic to international routes and strong performance
Slide 16: Group Ancillary Income
Group Ancillary Income Ancillary Income per pax up y-o-yy across the Group: Malaysia : ↑ 31% Thailand : ↑ 44% Indonesia: ↑ 41% Malaysia (RM) n Exchange rate Provides buffer to spike in oil prices and competitive pressures • RM1: THB10.08 • RM1: IDR2748 Minimal cost – use existing network, belly spac
Slide 17: Cash Balance & Gearing
Cash Balance & Gearing Cash and Cash equivalents close to RM1 billion Cash balance increased to RM938 million Including deposit on aircraft purchases, total cash is close to RM1.3 billion Improved Net Gearing below 3 times q-o-q q due to growth in cash AirAsia Berhad 1Q2010 4Q2009 Change (%) Net Deb
Slide 18: Amounts due from TAA & IAA
Amounts due from TAA & IAA The amounts due from TAA and IAA have not been provided for: The improvement in the financial results of these entities as shown earlier The expected further improvement on the financial performance of these companies The value of AirAsia’s stake in these companies 17
Slide 19: Impact of FRS139
Impact of FRS139 18
Slide 20: Impact of Total Derivatives
Impact of Total Derivatives 1 Jan 2010 31 Mar Period ended 31 March 2010 2010 Category/ RM’000 Derivative Derivative Movement Cash Flow Profit /Loss Assets/ Assets/ in Hedge DR/(CR) (Liabilities) (Liabilities) derivatives Services DR/(CR) Interest rate (214,493) (252,533) (38,040) 20,487 17,553 deri
Slide 21: Impact on Reserves
Impact on Reserves 1 January 2010 31 March 2010 Cash Cash Flow Retained Flow AFS Retained AFS Total Hedge Total Earnings Hedge Reserves Earnings Reserves Reserves Reserves RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Current reserves 1,138,438 - - 1,138,438 1,041,160 (65,670) 105,996 1,08
Slide 22: Outlook 2010
Outlook 2010 21
Slide 23: Forward Bookings
Forward Bookings As at 26 May 2010 Malaysia Indonesia Thailand Increase in demand on air travel Forward booking remains consistent y-o-y High take up rates on promotional campaigns Strategic marketing together with a targeted route revenue management 22
Slide 24: Aircraft Delivery Schedule
Aircraft Delivery Schedule Delivery schedule for 2010 Delivery Month No. of planes Deployments Quarter 2 (Apr – Jun) 6 3 = Thailand 2 = Malaysia 1 = Indonesia Quarter 3 (Jul – Sept) 6 4= Thailand 2 = Malaysia Quarter 4 (Oct – Dec) 4 1 = Thai 3 = Indonesia Total delivery of 16 Airbus A320 aircraft Ph
Slide 25: Regional Network Expansion
Regional Network Expansion To further capture and strengthen all routes Develop evelop Indian routes from hubs in Malaysia and Thailand Increase growth with the addition of frequencies on popular routes Further cross connecting main hubs AirAsia Group Route update New routes Additional frequency Kot
Slide 26: Summary
Summary The Group carried over 6 million guests in 1Q10 compared to 5 million guests in 1Q09 Strong catalyst for growth for Malaysian ancillary income achieving RM38 per pax in 1Q10. Launch of new products in 2010 and for ancillary income to target 20% of revenue Thailand remains resilient – Strong
Slide 27: Accounting for Investments
Accounting for Investments 26
Slide 28: AirAsia Consolidated Results 3 months ended 31 March 2010
AirAsia Consolidated Results 3 months ended 31 March 2010 Profit after tax (RM’mil) Malaysia AirAsia (“MAA”) 224,110 Thailand AirAsia (“TAA”) Nil Indonesia AirAsia (“IAA”) Nil Total 224,110 Slide 27 27
Slide 29: Group Results for the 3 months ended 31 March 2010
Group Results for the 3 months ended 31 March 2010 RM’000 MAA TAA IAA Revenue 898,041 308,452 192,282 EBITDAR 323,516 97,556 39,120 EBITDA 301,684 47,889 (2,868) EBIT 186,255 44,756 (4,062) Profit before tax 256,187 61,809 1,689 Profit after tax 224,100 61,809 1,689 Exchange rate • RM1: THB10.08 • R
Slide 30: Impact of TAA and IAA on AirAsia's consolidated financial statements
Impact of TAA and IAA on AirAsia’s consolidated financial statements 31 March 2010 TAA IAA RM’000 RM’000 Cost of investment 12 4 Recognised losses in balance (12) (4) sheet Amounts due from TAA & IAA 335,351 438,043 Accumulated losses in the 455 486 entities - recognised 12 4 - AA’s portion 210 233
Slide 31: Accounting for TAA and IAA
Accounting for TAA and IAA Overview AirAsia has investments of 48.9% in both TAA and IAA The aviation laws of Thailand and Indonesia require foreign shareholdings to not exceed 50% interest in these entities Based on the shareholders’ agreements for these entities, TAA is considered to be a jointly
Slide 32: Accounting for TAA and IAA (continued)
Accounting for TAA and IAA (continued) Equity Accounting The equity method is a method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition acquisition change in the investor’s share of net assets of the investee. The profit or loss of
Slide 33: Questions and answers
Now Everyone Can Fly Questions and answers 32
Slide 34: Appendix - 1Q10 Cost Breakdown for AirAsia Group
Appendix - 1Q10 Cost Breakdown for AirAsia Group Quarter ended: 31 March 2010 MAA TAA IAA Cost / ASK (US cents) Staff Costs 0.39 0.37 0.38 Fuel and Oil 1.55 1.62 1.68 User Charges and Station Expenses 0.28 0.55 0.34 Maintenance and Overhaul 0.13 0.41 0.20 Aircraft related cost 0.11 0.79 0.79 Depreci
Slide 35: Fleet Composition (31 March 2010)
Fleet Composition (31 March 2010) Number of Aircraft Total Airbus A320 Boeing 737 Malaysia 48 48 0 Thailand 20 12 8 Indonesia 16 10 6 Group Total 84 70 14