Reversal of deferred tax pushes AirAsia’s profit higher in Q2

AirAsia Group Bhd’s net profit more than doubled to RM361.81 million in the second quarter (Q2) ended June 30, 2018 versus RM146.52 million in the previous corresponding period, thanks to the reversal of deferred tax on the sale of aircraft.

Its revenue for the quarter under review was up 10.3% to RM2.62 billion from RM2.38 billion.

The low-cost carrier said in a filing with the stock exchange that load factor was lower at 86% in Q218 compared with 89% in Q217 due to a 17% increase in capacity. Average fare reduced 3% year-on-year, while the overall revenue per available seat kilometre (RASK) decreased 3% to 14.83 sen in Q218 from 15.35 sen in Q217.

Looking ahead, the group is projected to achieve an average load factor of 83% in the third quarter of 2018 based on the existing forward booking trend.

Despite strong demand and healthy load factor, AirAsia said it continues to face high fuel costs and weakening regional currencies. In addressing that, the group will drive revenue and sale of ancillary services and focus on reducing costs.

“Our Malaysian operations remain strong with Indonesian operations slowly recovering. We face challenges in Thailand following the ferry incident in Phuket which has dampened demand from China. Third quarter is usually the peak quarter for travel to Boracay but unfortunately the government of Philippines has restricted travel to the island.”

Barring any unforeseen circumstances, the board remains positive that the overall results in 2018 will be favourable.

AirAsia’s first-half net profit nearly doubled to RM1.5 billion from RM762.4 million, with revenue rising 12.5% to RM5.18 billion from RM4.6 billion.

Its shares dipped 5 sen or 1.4% to close at RM3.44 on 5.73 million shares done.